Free incoming vs. pools of cellular minutes

As noted, in Australia, I picked up a SIM at the airport for my unlocked phone. Australia, like Europe and most other places outside North America, uses a system where incoming calls to cell phones are paid by the caller, and are free to the mobile owner. As you may know, in North America and a small number of other countries, the mobile owner pays for airtime on incoming calls, and they look like ordinary landline calls to the caller.

In fact, in North America, there’s no easy way for an ordinary consumer to even know a number is a mobile, since you can port landline numbers to cell phones. In Australia, cell phones have their own state-code, so you know when you are calling them, and with a bit of memorizing, you also know which mobile company they belong to, which turns out to be important — because many mobile companies offer cheap or free calling between two phones on the same carrier (in both systems.) Some mobile companies have cross deals and offer cheap/free calling to any other mobile phone.

The cost to call these caller-pays phones is quite high, anywhere from 20 to 30 cents per minute. In fact, today, these caller-pays cell phones are the most expensive phones in the developed world to call. From here in California, using VoIP, I can call Australian land lines for 2 cents/minute, while it’s 22 cents/minute to call a mobile.

So which is better? Europeans argued that because incoming calls are free, people were less afraid to give out mobile numbers, and that spurred the faster deployment of cellular. But in the USA and Canada, people buy giant bundles of minutes that have gotten so cheap they tend to not care that much about the cost of the incoming calls or outgoing ones. When you do care, however (especially with some of the high per minute costs) the free-incoming argument is that you should not have to pay for a call you didn’t necessarily choose to have happen.

Since I was just there for a few weeks, I did not buy a plan with tons of minutes. So I definitely noticed my own sense about calling out vs. receiving. Most people don’t seem too bothered by calling a mobile. It depends on how much you notice phone costs. It is useful to know that you are calling a mobile, not simply for cost, but because you want to know if you’re interrupting somebody. However, that stands in the way of highly useful number portability.

(In my expected future where the phone number goes away, number portability becomes less important. Each person’s name/number might have a standard suffix for home, mobile, work, pager, fax etc.)

The arguments are present for both sides, but the big issue I see is that there is no competition in the cost of calls to mobiles. Even though the carriers are happily selling mobile to mobile minutes for near-free, the ability to bill the caller for incoming calls is a cash cow they have no incentive to reduce. As I indicated earlier, there were carriers advertising they would rebate customers some of the money paid in these heavy charges to landline callers. One could imagine a phone that is free, as long as you get enough incoming minutes to pay for your outgoing ones. Hardly fair.

Carriers might, in a more complex regime, be able to charge less to landline callers calling mobiles, but it’s hard to say if this would be a big competitive advantage, so has anybody done it? So what can bring the price down as the cost dwindles the way it has?

If you can’t tell that you’re calling a mobile (as in the USA) then the US model is really the only choice. You don’t want to see yourself dinged high fees for what you thought was a local call. The US model was that since I decided to have an expensive cell phone, the airtime was my problem. This model has lead to lots of competition on pricing for airtime in general. Now monthly plans with less than 300 minutes are rare, and they’re under 10 cents — well under in the larger plans, and often unlimited in off-peak periods.

Which system do you like better?

Roaming charges further

Roaming charges further complicate the question, even more so when the roaming takes you out of the coverage area of your own provider and applies charges set by agreements among carriers.

It can, in theory, become quite difficult to determine in advance how much both the calling and the called party will have to pay for a call, and how the bill might be different if the roles were reversed.

The Canadian Approach

Cellphone fees in Canada predominantly follow the US model. In the early days, one carrier, Bell Canada, experimented with offering secondary phone numbers that had a special prefix and where the calls were charged to the landland caller. However, they were quickly canned. What I find interesting now is that due to competition, 2 of the 3 cellular carriers offer at least one plan that includes free, unlimited incoming calls (without the ability to charge back the call to the landline caller).

Alan Gahtan
www.gahtan.com/techlawblog

totally free incoming

Nextel in the USA offered that as well. A number of carriers also have marketed "first minute free" on incoming, so that you could always hang up in the first minute and avoid charges for calls you did not want.

When they do free incoming, they run the risk that some customers will call people and say "call me back" to avoid billing lots of minutes.

Today 800 numbers are so cheap you could offer call-me-back on my 800 number affordably.

Totally free incoming

I love my nextel with totally free incoming free nights and weekends and free mobile to mobile. The only problem is with the mobile to mobile because it either has to be nextel or sprint customers and how am I supposed to know who is who with the carriers by a phone number. I have 5 phones on my account with nextel and I have tried other carriers and I was always bogged down with going over my minutes or roaming fees, with our nextels direct connect and free incoming there is no roaming charges so no surprises if anyone of us go over our minutes, it is $.40 and that's it. We did have an issue with the text messages being $9.99 to read a joke from a place called M-Cube but hopefully that is resolved and my mobiles are safe again.

incoming calls

A lot of early cell phone plans offer the first incoming minute free. This was nice when you only had 100 minutes and didn't want to waste any on wrong numbers.

Roaming charges are a different matter since we live in a mountainous region near Canada. There are lots of places where Canadian cell towers 30 miles away give better coverage than anything local, and international roaming costs. The trick is to diddle with the system setting and use home service only, but then you have to change it when you go to our nearest city. Home service is sort of relative.

Thanks for this interesting

Thanks for this interesting post...
In New Zealand we have special prefixed numbers for all mobile phone numbers, there are NO roaming charges, all incoming calls are free.
This is the way it should be. I find the setup that the states has is INCREDIBLY complicated and messy and I don't know how anyone can handle it!

Incoming free

Are you sure incoming calls in NZ are free? What I read says that the caller pays a high per-minute charge compared to a local call, definitely not free. This sounds like the common system of caller pays for airtime, vs. the North American system of cell phone owner pays for airtime.

Again, the problem is markets. The cell phone owner comparison shops for providers and negotiates rates. The caller does not, she only gets to decide whether to call or not. Any time the person negotiating the rate is not the person paying the rate you get a flawed market.

(Which is also the case in most countries where the carriers subsidize the cell phones, so the phones get features carriers like, and not so much the features that users like.)

Finnish system: Incoming are

Finnish system:
Incoming are free
Mobile to mobile inexpensive
Line to mobile costs more, but everyone has a mobile one so no problem
Special numbers for mobile
Mobile numbers can be kept when changin operators (extreme competition)
Operators complaining about low profits
Phones work with any operator

Works very well here.

No serious competition yet with wireless data (might be soon)

Line to mobile costs more

The fact that "everyone" has a mobile does not make this not a problem because, aside from having to figure out which phone to use, this does not apply to people calling into the country long distance. What people don't realize is that the difference between long distance and local, the difference between international and local, is going away.

Except when calling a mobile. It's 3 cents for me to call a landline in Finland, 20 cents/minute to call a mobile.

Having lived in both

Having lived in both countries (Can/Oz) I guess I can weigh in on the merits of both systems:

1) You can have unlimited mobile calling in Oz, especially through voip: www.gotalk.com.au - or search on google for go talk unlimited voip calling plan (it's technically 1000 minutes, but nearly unlimited)

2) I bought PAYG in Canada as well as PAYG in Oz. $20 of PAYG seemed to barely last me a week because of the fact that the incoming calls were charged, I found myself trying to get the other person to say what they wanted as quick as possible so I could cut my call costs down, that's despite the fact that the PAYG plan including unlimited evenings and weekends for only $1/day! In Oz on the other hand, with a $30 "cap" plan my credit lasts for the entire month, even when people call me for hours/or I call them. I find myself a few hour long conversations during the month and I'm not afraid when people call me as I know the call will be free to me. You are right however, I get fewer people calling me from a landline, with the majority of calls being from other people's mobiles.

3) There is a new plan from Telstra - called the Get connected plan which is probalby the best plan I have ever seen (North America included) Basically the details are $40/month, no call credit though, but 1) unlimited incoming minutes 2) only 0.35c/call (no per minute charges) to any landline in Australia 0.35c to any Telstra mobile in the country, and .36c/minute to any other mobile. However very few people have even heard of this plan, so my guess is that North American style pricing is not that popular in Oz.

4) People in Oz tend to be more mobile than North Americans. I have noticed quite a few people making calls to other states even countries on their mobile, more frequently than in Canada anyway. I knew of almost no one who would dream of making a long distance call on their mobile. Most would turn of their mobile during the day, and just using the unlimited evenings/weekends. So in that sense the "pool" of minutes in a few of the mobile plans in Canada are for local minutes only - long distance is still billed seperately, and usually at pretty high rates. Though I guess that's changing as well. Also in plans where incoming is free, that is only for local calls, again if someone from the US where to call you, that would not count.

5) Texting is more popular by far in Oz than in Canada. Probalby because of the relatively low call rates to Mobiles in Can vs. Oz. However now that I've gotten used to the texting I find it does have it's advantages. For example if you're on a bus it's pretty rude to be having a conversation on your cell, and that's the perfect occasion to be texting back and forth with your friends. During the day time, being in an office/school etc. texting is also easier as it disrupts less people.

So my final point is that each system is really designed for the use of the people in that country.

Best ever

I can't see how this Get Connected is the best plan ever. There are unlimited incoming plans here in the USA if you want them, and some in Canada, but Canada's plans are not nearly as good. Lots more regulation in Canada, and now only 3 competitors (only one GSM company though it uses two brands.)

My USA plan is $30/month for 500 voice, unlimited data, unlimited text and picture messaging. Unlimited weekends and after 7pm. Unlimited free calls to other Sprint users too. T-mobile here and Rogers in Canada also now offer free calls to 5 numbers (any carrier) you pick. Sprint offers unlimited calls to your home landline for $5 per month. In the USA, all major plans include no charge for U.S. long distance. Alternately there are local competitors that offer for $40/month completely unlimited calling, day or night, no charges,
no long distance within the USA. (But charges for roaming. The other plans I describe allow you to roam nationwide.)

They still all suck if you go to another country though, and of course CMDA phones only work in a few other countries anyway.

And people who call you aren't seeing the clock ticking. That's why you were so worried about people yapping when calling you. They weren't paying 20 cents a minute to do so.

Well I guess it depends on

Well I guess it depends on your opinion - unlimted "calls" after 7pm (if anything like Canada) is pretty useless to me, unless you only call someone close by in your "local" calling area.

With the Get Connected plans (or the Business Mobile Select plans - $55 unlimited calling/incoming/texting (no "call connection" charge) you can call any landline in the country, so if you make long calls and don't just call people in your "local" area then this is much better value then the plans I've seen in Canada and in some ways better for me than the plans in the US.

I have to admit that the Mobile to Mobile calls in the US are pretty good, unless it's only limited to a certain geographical area?

No you got it wrong, I was worried about People calling me in Canada because I was paying 0.35c/minute when they called! Why would I care how much they paid? Here since all incoming (even long distance) is free I have no qualms in talking as long as needed. On the other hand in Canada my meagre $20 recharge barely lasted a week even though I had unlimited evenings starting at 6pm for only $1/day. The reason is because the incoming calls are charged that $20 credit (+$3 taxes) is not the same as an equivalent $30 credit in Australia. Overall you get more for your money in Oz (well subjectively for me). But yes it does suck in the sense that you are either stuck with certain networks, or high per minute rates when calling from landline - to mobile.

I suspect that there are merits to each system, and no one system is clearly superior to the other. Both have their advantages, and I doubt that Australia will ever adopt the US system, or vice-versa. There is hope in the sense that the ACCC is forcing Telstra to drive down their wholesale price so that calls will be cheaper for everyone. Take a look at some of the Asian countries like HK where the system is similar to Oz (free incoming calls) but yet the cost per minute to call a mobile there is not very high (as low as $0.04cents/min with some voip providers) and the reason is because there is true competition there. So provided that there is competition the Australia/Europe system can be as cheap as the US one.

Merits

The Canadian telcos, since there are only 3, are still gouging customers far more than the US. Long distance became effectively free years ago (for both markets) but the carriers rake you over teh coals for it. In the USA, almost all cellular plans cover the whole country, there is no long distance vs. local distinction. (In fact, almost all plans also have no roaming at least on that carrier's network.)

However, the main point about which is *better* is not about the particular price plans of each. The main thing that is better about the USA/Canada model is the way it drives competition. (That of course requires there be adequate competition, which there is not in Canada.)

In the European model, the person paying for the airtime (the caller) has no ability to negotiate the price or choose the carrier based on the price. As such there are very few pressures to drive down the price, or in fact do anything for the payer.

In the North American model, the person paying for the airtime (the phone owner) is the person who chooses the carrier. There is strong pressure to give the customer the best rates.

Now it's true that cell phone competition is far from ideal in most locations. It's highly regulated, and there may be no more than 2 to 4 competitors. So we don't get a truly optimal result. However, the more competition you have, the better the North American model will do. It is unquestionably superior from that standpoint.

What makes this particularly clear is that you can get "free incoming" from several companies here. And there would be nothing stopping cell companies from offering "900 number incoming" where the caller pays 25 cents/minute to call you -- but nobody offers it because very few people would want it. (Mostly people who want to actively discourage callers.)

The European/Oz model drives

The European/Oz model drives competition because the subscriber shops for a plan that has the cheapest cost for their call patterns. The US model is nuts (imho), why should both parties pay for the call? Sure the Oz call rate could drop more but the rage at the moment is 'cap' plans in which you pay x amount for more than x amount of credit (e.g. 30 = 120), they could instead just drop the call rate by 75%

The US model isn't nuts

For several reasons. First of all, almost everybody buys a big bucket of minutes and thus they don't really think of it as "both parties paying for the call." And almost all carriers here offer the ability to not have either party pay on a call to another customer of the same mobile company.

The Euro model with a mobile to mobile call (without in-network benefits) has the caller paying *double*. They pay for their own airtime, and the airtime of the called party, which they didn't get to negotiate the price of. The US model has each party pay for their airtime, which they negotiated the price of. I never go over my minutes, so it's effectively nothing. (I have a plan that gives 500 minutes, unlimited data, unlimited SMS, unlimited picture messaging, unlimited domestic long distance and unlimited minutes nights/weekends and unlimited minutes to other customers of Sprint all for $30/month. Does that seem nuts to you? Is any European or other plan close to that?)

In the USA/Canada, mobile numbers can't be told from landlines. They are all the same and so all costs are put on the party that knows they have asked for something special. If I elect to use a mobile with airtime costs, I pay those airtime costs, including when people call me. That's because I'm the one who gave out a mobile number, they have no idea that's what I am on. If I call long distance, I pay the costs, though of course on most mobile plans and many home plans, that no longer exists.

how do u get prepay in states to recieve free incoming.??

all incoming calls r free in uk. mobiles or landline. my girlfriend left for states for a week and she cant find any prepay sim to use with her gsm phone. everytime i call her on her orange uk sim, she is charge massively for recieving calls abroad. Is there any prepay sim in states that does not charge for incoming calls and does not tie u into a contract..??? any help will b appreciated....

I don't think so

The two main carriers in the USA for GSM don’t as far as I know. (Though they do offer plans with unlimited nights and weekends, both incoming and outgoing.) Perhaps some of the smaller carriers do. As you know, that’s not the way of plans in North America.

Note that UK plans are not “free incoming” they are “caller pays a high fee for your incoming calls.”

US plans are “caller does not pay” (cell lines look like landlines.) instead the cell owner pays. Several of the carriers offer free incoming calls to their monthly customers who buy such a plan, but it means you miss out on some other feature that other plans get.

The incoming calls will cost the standard minute rate, which is down to 10 cents/minute on t-mobile if you buy a larger card.

Fido in Canada does offer free incoming calls on a plan that has a $1/day cost for doing so. I don’t think their prepaid roams into the USA.

"Fido in Canada does offer

"Fido in Canada does offer free incoming calls on a plan that has a $1/day cost for doing so. "

Yes Fido has such a plan but only for local incoming calls. That makes a difference. So if you receive call from other province than you have your Fido no. you have to pay for incoming calls. So you pay for incoming calls from almost whole Canada, USA and of course the rest of the world.

Incoming Free (Oz & NZ)

For the Australian and New Zealand markets the caller does negotiate the price with their operator. The calls to mobiles (whether from a mobile or landline) are payed for by the caller at the rate they have agreed with their operator. From this perspective the person who is receiving the call receives free incoming calls. You only pay for the calls that you make.

For example: a caller makes a call from their landline to a mobile operator - ANY operator. The cost is paid for by the caller at the rate advertised by their landline provider. This is the same rate for any mobile operator you are calling.

For example: a caller makes a call from their mobile to another mobile. Most mobile operators in Australia and New Zealand have a different rate for calling within the same network or to another network. If the caller is calling a different network to their own then they are charged at a flat rate. The interconnect charges between operators are not taken into account here. It is a rate defined in the callers contract for calling ANY mobile on another network.

The statement you made "Any time the person negotiating the rate is not the person paying the rate you get a flawed market.". This is not the case in Australia or New Zealand. The calling party has always negotiated a price with their operator which they pay for the call they make.

Of course roaming is a different matter which I will not get into.

I personally find the receiver pays model quite absurd, but that is my own feeling on the matter. I would be interested to know if this is also the case for SMS & MMS? Can I send a lot of SMS messages to my friend in the US and use up all his credit? Of course, he may not be a friend after that ;)

The “receiver pays”

The “receiver pays” model is really thought of as the “person who chose to have the call go over a more expensive channel pays” model. It is seen as similar to call forwarding. If I forward my phone to a number in Fiji, people calling me don’t pay, I pay for the LD charges to Fiji.

Because in the US/Canada cell numbers are indistinguishable from landlines — you can port your landline number to your mobile and many people do — this system makes more sense.

How much negotiation is there, as in how much variation is there of the price paid by landline callers on different carriers? There seems to be a floor, in that the cheapest carriers still cost 20 cents/minute USD.

That inter-cellular calls are cheap is a sign of how artificial this price is, and that some carriers rebate the caller/sucker’s fee to the target is another sign of it.

As for SMS, that’s a racket either way. It should be free based on its real cost — it’s a single data packet! Yes, US carriers do charge to receive (and some just increased it, amazingly). You can send for free from the web though, and people can e-mail you a text message from ordinary internet mail. That’s only possible when there’s no charge to the sender. However, there should be no charge to anybody on this. It’s a racket that there is.

The reason the landline to

The reason the landline to mobile/mobile carrier to another mobile carrier cost is high is because of the fee charged by the receiving carrier - so instead of mobile user paying the incoming cost, it's billed by the users telco to the callers telco which is in turn billed by the set rate of the landline (plan). At the moment it's something like 20c/min so they just keep passing on the cost to the caller; that's why call cards aren't much cheaper.

Asking

I want to buy a service, I wonder if any of carrier in USA have a free incoming calls? thanks

Yeah a few do

Offer plans like that, I don’t think they are very popular. I don’t believe any prepaid plan does that, as people would get them too much for incoming-only phones. Since that forces you into a monthly subscription carrier, there to get free incoming you have to make some sacrifice because one way or another you are paying for the incoming calls — there is no way to charge the caller for them as is done in Europe etc. All they do is create an illusion that the incoming calls are free by charging more in monthly fees or for outgoing calls.

Sweden

Sweden:

Operator Telia Comviq

Prepaid 150kr aprox $18

You get credit for incoming calls (like 3 cents a minute)

When calling Tele and comviq cust (telia is the biggist operator) there is a connection fee of less then 20 cents and there after unlimited airtime per call for the first month

After the first month it is about 15 cents a minute and sms at about 20 cents

Had this for a year// Great as a student there

Unlimited Incoming Calls in Canada?

Anyone know of such a plan that is NOT local incoming only?
Just curious, though i see how that could limit the long-distance revenue collected..

Paying for incoming calls??

Why should you have to pay for a call that you have not made? I am used to the system in the UK and in the caribbean. You pay for calls that you make but all incoming calls are free. I think the system in the U.S. is quite bizarre to have to pay for an incoming call to your phone. If someone is already paying to call you, why are you also paying to recieve the call? I think that would be quite difficult to deal with. I would find myself screening alot of potentially important calls and probably being quite rude just to keep costs down.

While I hoped I explained it above, let me try again

In the USA/Canada, mobile phone numbers are just normal numbers, you can’t tell they are mobile. In fact, you can change from a landline to a cell phone and keep your number the same.

Think of it thus more like call forwarding. You can purchase call forwarding service for your number, and forward calls to a number somewhere else, perhaps even in another country, or a mobile. When you do this, you, the recipient of the call doing the forwarding, are the one who pays for the special cost, and everybody thinks this is the way it should be. Otherwise, people might call you and with what they think is a free local call and be shocked to see a 30 cent/minute charge on it to call where you really are.

It’s the same with cell phones. You are the one who has chosen the phone with the special costs to call, so of course you are the one who pays to receive calls on it. Nobody knows it is your mobile number unless you told them. The only way around this would be to have a screening message that says, “Caution, you are calling a mobile, and this call will cost 30 cents a minute. Hang up now to avoid the cost.” Nobody wants that, and it would also reveal that the number is mobile.

The reason to NA system is superior is that the person choosing the carrier is the person paying the cost. Thus you have a market, because the companies compete on cost. Some even offer free incoming plans. In other countries, the person who selected the cost doesn’t pay, the sucker calling pays, with no market power to reduce rates, other than by telling friends, “I don’t like to call you because Vodaphone’s rates are too high” or whatever.

In a market, the person paying must be the one who choses and drives competition.

The caller is not a sucker

The person calling is not a sucker for having to pay. It's just different because they are the ones that have chosen what provider they want to be with. They know from their package how much it costs to make calls, send sms etc to mobiles or landlines. It just makes alot more sense for the person making the call to pay than the person receiving it. All it is, is an extention to making calls between landlines. Surely you wouldn't like everyone to call you collect at home? Why have a different system for mobiles. The competition is still there, only with the caller being the one that selects the costs for the calls they make. They have the power to reduce rates by chosing the cheaper plan. When it comes to having the convenience of using your same number abroad or forwarding a call to your mobile then you pay the roaming/forwarding fees. So the person calling you is not paying for a higher rate without knowing it. Anyways I'm sure it's not just me that thinks this way after all the majority of the world works this way.

I'm more convinced than ever

That wireless user pays (for wireless) is right. In Sept I put up a free phone, let people call anywhere in the world for free. All the landlines in the world cost me 1-2 cents/minute, I could easily do it free. The only phones in the developed world that now cost an amount you could care about are the non-NA wireless phones. Almost all my bill was from calls to them. They stand in the way of making land telephony free.

But how much does it cost to

But how much does it cost to receive calls from your "free" phone?

and why should mobile users have to pay becuase you want to talk to them?

How much it costs

Is something you negotiate with your cell company. In the USA, because people can negotiate the cost of incoming calls with their cell company, the cost is vastly lower. There are some plans that have incoming calls be free (to both parties.) Almost all plans sold today include all weekend and evening minutes (incoming and outgoing) free.

There have been some plans that give you the first minute of incoming calls free, so you can hang up if you aren’t inclined to talk and pay airtime.

However, few care about this because most people have a plan where minutes (incoming and outgoing) come in a big bundle which they rarely exceed. In the bundles you pay something like another $10 for 400 more minutes (TMobile) That’s 2.5 cents/minute. Sprint charges 5 cents per minute for going over your bundle, which is the fairest.

Do you understand now what competition in price does? The “free” minutes on Euro cell phones are costing the caller 20 to 25 cents per minute, often more. I guess if you want your callers to hate calling you that’s a good idea.

Now as it turns out you can try to play the opposite rules in both places. In theory, in the USA, you could get a 900 number charging 25 cents/minute and use that as your cell number, and the money you got would more than pay for your airtime. How many people would call you? Close to zero, because of the way people think.

In Europe, you could buy a landline number and forward it to your mobile, and you would pay the 25 cent/minute cost. Nobody wants to do that either, do they?

I’m surprised there is even debate on this any more.

In Oz, the mobile carrier

In Oz, the mobile carrier doesn't influence the cost of the call from a landline unless it is the same carrier as the landline (therefore cheaper).

charging for incoming and outgoing is a bit odd, I have free unlimited incoming and I pay 30c/minute up to $99 a month then I stop paying (up to $500) - that works out to be 1700 odd minutes and yes I do use that up cos I don't use a landline.

It's different as a landline to mobile caller because you know that the call will be expensive if you wish to talk for a long time - most of us just use a mobile to call a mobile and get our mates to use the same carrier for free calls to each other.

I think it's prolly easier that way out of courtesy, I don't have to explain to the caller that they should shut up cos I'm outta minutes...

Paying for receiving is absurd

"I don't have to explain to the caller that they should shut up cos I'm outta minutes..."

Exactly. I am in Canada and hate to give my number to anyone because they will just suck my minutes. The problem is you have to be very rude to tell your calling parties from overseas (who are already paying a premium) that they are actually costing you too much.

I hate the NA model. It's the most stupid thing I hate here. I think the idiot who designed it should be sentenced to death (kidding).

If I pay for receiving, then why pay for calling as well? Clearly it's a very flawed and unfair model!

The biggest mistake in the NA model is the choice of giving the same area code for landlines and cellphones. This is the wrong way to do it. This distinction should not be hidden from the caller so that they know if they are disturbing or not. Once they decide to disturb on my cell, they have to pay the premium. What's the point of hiding the type of your number? Portability? Useless really unless between the same types (e.g. different landline companies or different cell companies but intermixed)

I have read all the arguments of favoring the NA model and still find it non-convincing

NA plans are not superior

In the US, if you call a cellphone, you have to pay for airtime, and so does the person you called! That's crazy! Both parties get screwed! AllTel (prepaid) is charging 10 cents for receiving a text message! That's nuts! I have no control over text messages I receive!

Basically, we need a plan that has the following:

Incoming: FREE always (unless roaming)
Outgoing: one fixed cost for all land lines and perhaps another fixed cost for cell phones (any carrier). This keeps things simpler.
SMS: Incoming must be FREE; outgoing is naturally charged.

One more thing, why should I pay $60 every month for 1000-something minutes? I should pay only minimal service charge every month and pay only for the minutes I use. I never use my entire 1000 minutes, and so I am losing a lot of money (per year). That's another "BS" we have to put up with in America. All plans are basically "prepaid" in nature. The only difference is whether you are stuck with a service agreement for 24-months ("regular"), or not ("prepaid").

Of course, Americans always believe their system is fair/superior, so it is unlikely it will change any time soon.

No, that makes sense

If I am one one cell phone and call another cell phone, there are two "airtimes" so of course both pay. It is only an artifact of marketing that some cell companies make that call free or cheaper than landline calls. Text messaging pricing is indeed insane in both the USA and Europe. Though I get free unlimited data and free unlimited text and 500 mins airtime for $30/month, which seems to beat just about all the plans out there.

You can get free incoming minutes (free to both caller and recipient) from several cell companies here, but of course it is not "free" as the plans are not as good in other departments, but cheaper than many overseas plans.

But I still believe the right approach is to make it "a phone is a phone" to the caller. The caller should not have to pay a different amount to call me because I happen to be on my cell at one moment and my landline the next. Especially not the ridiculous 20 cent/minute charges so many european mobile carriers charge. Only when "a phone is a phone" do you get the ability to do interesting innovations without having to worry about accounting. Today, if you want to build phone apps, you can make them free or flat rate -- except calling cell phones in Europe and similar places. In N.A. you can just make the apps free or flat rate when domestic.

NA model is super flawed

"But I still believe the right approach is to make it "a phone is a phone" to the caller. The caller should not have to pay a different amount to call me because I happen to be on my cell at one moment and my landline the next. Especially not the ridiculous 20 cent/minute charges so many european mobile carriers charge."

Oh my. My cell carrier (Fido, and I believe Rogers as well) charges 35 cents/min (with 13% tax it's 39.55 cents) for any airtime sent or received after I finish my "plan" minutes, and that does not include the long distance charge (another 35c or 39.55c with tax) which is applied if I am receiving an unfortunate call while "roaming" outside my home area (a "cell" of ~30x30 km) or happened to call someone from outside my 30x30 home area. Total: 79.1 cents for a stupid local or semi-local minute. Isn't that super super ridiculous compared to your 20c to call a cellphone thousands of miles away?

In the EU/Oz/NZ/Somalia/Africa/Asia/ME/.... model this is not the case at all. If you cannot afford the phone, just don't call anybody and pay very minimal charges to keep the line ringing. In NA, if you cannot afford it, you have to cut the cord or your wallet keeps bleeding despite your will (minimum plan charges are much higher here plus the unfortunate received calls that you just wished never happened). In short, the NA model caters for the needs of the heavy users by selling them huge bundles whereas the other model can cater for everyone else in addition to the heavy users.
The definition of a heavy user is also different. Here means you make OR receive lots of calls, there it means you just make a lot of calls. If you happen to be popular and receive lots of calls, your "fans" pay, not you and you are still a light user.

The European GSM model allows people of lower socio-economical level have cellphones (cheap or used models) and be accessible to their loved ones as needed. This is not true here.

The heavy users of NA are subsidized by the light users because their "unlimited plans" just make it more expensive for the company to offer cheaper plans for lighter usage, which is really unfair. The heavy users should be paying much more for their thousands of minutes used, not the same as one who only use a cell phone for a few minutes of emergency (like it should be).

As a light calling user, all I need is free incoming anywhere in the country (at least with the same company) and free caller ID to know who is calling. I don't care about any free minutes or SMS. Why no company in NA ever offers that, especially as prepaid?

Well it doesn't matter

Well it doesn't matter anymore, looks like unlimited nation wide calling has come to Australia with the new timeless plans.

Truly unlimited calling, with no weasly words in the fine print. They are of course only for personal use, but there's no per minute limit even in the fine print.

Other then the US there is no other country in the world with this plan. Canada which uses a US based model for calling, is not even close to having such a plan. The best they can do is unlimited incoming, or unlimited evenings and weekends (only for local calls) and they have horrible roaming charges. Even driving 10-15 kms outside your "local" area can increase your incoming/outgoing rate tremendously.

Personally having gone to Canada for holiday and being on prepaid you get a lot less for the same amount of money. You are simply too afraid for anyone to call you because you are worried you will run out of credit, especially if they talk for a long period of time. In Australia the situation is reversed, the person who does the calling probably is worried about talking too long.

Yes, Canadian plans are sucking

And not improving. Though they do offer plans with free incoming, which unlike overseas plans are free to both the caller and the phone owner. People with those plans often call people and ask them to call the cell phone back. There are even services that will call you back with dialtone if you want to cheat.

U.S. plans on the other hand are getting better and there’s a fair bit of MVNO competition. There’s fully unlimited plans without roaming for $35 or so, and nationwide unlimited plans, including text and data for $99.

I don’t need unlimited. Sprint’s $30 plan with unlimited data, text, picture messaging, nights, weekends, in-network and 500 daytime out-of-network minutes is all I need. I don’t know anywhere that you can get something like that.

In the USA it’s getting pretty common for people to not have a landline now. I know people do that in Europe too but that must be very annoying to those who want to call them.

North American model IS flawed

Why should I be worried about receiving a phone call? What if the other party has decided to call you and is paying big money to call from overseas (and they don't have access to cheap voip or even a computer) and you're shy to tell them to shut up please or you will pay more than them to receive their call? If I called, I'm responsible to know how much it would cost me, not my calee. I think this is logic. It is not the same as forwarding calls, now that's completely different.

And why should the fact that I have a mobile be concealed from the caller? They should know if they're interrupting by calling at working hours for example. The decision to make cell phone numbers indistinguishable from other local numbers is a bad one I believe. It makes situation much more complicated than needed.

BTW, it is funny they call it a cell phone in NA as it is not a true mobile phone! You cannot receive a call if you go 20km outside your 'local' area! Otherwise you're charged horrible so-called roaming rate! How come it is roaming when I'm in the same country, in the same state/province and on the same carrier network! You feel like you're locked up in a 'cell'! In my last Fido bill, I was notified of a change to the calling/receiving map of my "local" area! Although the transparency achieved by doing that is better than before but How ridiculous! How on earth I should remember such an irregular shape map with all the complex rules to determine if I'm making/receiving a local call/roaming call/ long distance call while I'm driving/hiking/picnicking/whatever?? Attaching the same area code and initial number extension of my city to my cell phone number is plain wrong!

The system is proving to be flawed with the introduction and increase of receiving SMS messages. Now if you can control to pickup that expensive to receive voice call, how in hell could you decide to block a sms from eating your pocket? Every person should worry about what he/she does, not what others do to him/her!

I chose to have a cell/mobile phone so that anyone can call me if they need me and I can call when I need. Doing a simple mathematical comparison, do you expect yourself to make more calls (as one person) or receive more calls (as all the persons who know you)? You should pay for that important call you needed to make at the particular moment that you're somewhere but the other someone who wants to annoy you and catch you wherever you were should pay for that important call to them! In NA, you're not only annoyed by the interruption of the call, but also by the price you have to pay or the number of minutes remaining on your account afterward. Well if you bought your peace of mind with the best all included plan with all options ...etc, then only then you're fine and you don't have to worry. But can everyone really do that?

In other countries, anyone can afford to have a mobile phone, even low-income workers or even homeless can. Why? They will just put a one-time cost to buy a cheap used phone, put a prepaid SIM that receives calls for free and spend very little money on making important and emergency calls. They can afford it. I am a graduate student in Canada and I cannot afford it and I wish I could cancel my line altogether except for that emergency, probably once-in-a-month call!

In fact it is far from convenient, if you want to call your friend who is in another state or city, you need to know if you're actually costing him money! I guess a call would go like this: "Hi Charile, is this call free to you?" "No, Mike, sorry, I'm hiking with some friends on a trail 30 km away from my city, and I already wasted all my minutes this month, so let us talk on skype when I come back" "OK bye now" TOTAL NUTS.. Mike decided to bug his friend for a little chat and he knows it will cost him some money. Why should Mike pay "nothing" to call Charile? Why should Charile get annoyed and pay for receiving such a call?

In a system like this, it is easy to abuse the system. As pointed out in one of the posts, you buy expensive unlimited incoming with your big "package", call a friend and ask him to call you back since he would pay almost nothing and talk for hours so that you feel you made use of your shiny phone and expensive plan.. Don't be surprised to find a price hike to plans next year as "competing" carriers agree to do a mutual hike so that people don't jump ships! Give people unlimited evening/weekends and let them call their home phone and keep it open all night if they want or let a teenager having that long conversation on the bus or in the mall.. Give people unlimited text so that a small percentage who actually abuse it cause the others who don't to pay 20c to send/receive a single 160 character message that is actually piggybacked on an actual packet carrying something else!

Wireless medium is a scarce resource and it should be used for useful stuff not for waste. Here you buy an expensive unlimited whatever plan and you have the illusion that wireless is cheap/free! No it's not! Use it responsibly and for good reasons and pay for that use only not for what you don't!

I just want a simple to understand and estimate service: pay for what I call/send from my device, I can chose to be in a higher tier that would give me some free minutes for a flat rate if I know that I tend to use that but I will pay a competitive per second rate after I use them all. I want to receive for free what people want to tell me about. I want to know for free as well who is calling me, that shouldn't cost me 6$ per month! I want per second billing! That shouldn't be difficult to do!

Has anyone noticed how outdated the phones are here in NA? No one seems to care about having the latest technology as having a good one from your carrier usually means you're locked to pay the premium for the extra services that are implemented in the latest tech.

P.S.: I think I generalized a bit about NA, Canada seem to be the sucker much more than the US!

Yes, Canadian plans suck

But not because you pay for airtime rather than making calls. If you are poor in Canada you can get a prepaid account pretty cheaply, though not as cheaply as in Europe. A few carriers in Canada even offer “free incoming” but there is either a monthly fee or a daily fee, I think in some cases on the day you use it. Thanks to that there are places that do dialback, so you can do all your calls as incomings and get unlimited calling for a low fee, but carriers don’t like it.

Mobile use in NA is much higher than in Europe and I think it is due to the fact that people buy buckets and callers don’t pay extra to call you. I was arguing this with the CEO of Verizon last week, he claims it is because of phone subsidies but I disagree.

However, I think the proof is even more clear than when I wrote this. I can call everywhere in the developed world for a penny a minute or less on landlines. That’s due to competition. European mobiles cost 15 to 25 cents/minute. That’s just crazy. It’s because there is no competition, I get no choice in the matter. I don’t know how to not call that flawed.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Post new comment

His name is Brad Templeton. You figure it out.
Please make up a name if you do not wish to give your real one.
The content of this field is kept private and will not be shown publicly.
Personal home pages only. Posts with biz home pages get deleted and search engines ignore all links
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

More information about formatting options