US smartphone users pay $50/mo more on average for their cell phone bill than UK consumers.
The typical UK smartphone user pays just $30 a month on average for data and service.
Now think about how much you spend every month on your cell phone plan. Chances are, you're spending over $80 every month, and don't get us started on how much you might be spending on a family plan.
So why are cell phone bills in the US so expensive? And what can you do to cut costs and save some money?
In this article, we're going to explore the differences between the US and UK cell phone markets and discover why there is such a wide cost gap between the countries.
We'll also offer some cost-saving strategies you can use to cut your monthly cell phone bill, and show you to find a cheaper plan.
Table of Contents
Same Plans, Different Costs
In the past, it's been noted that the average cell phone bill for a United States citizen vastly differed from the average cell phone bill for a United Kingdom citizen. Take, for example, a couple of plan details in 2014 from providers Verizon Wireless and Three UK.
The monthly cost of typical smartphone service with Verizon Wireless in 2014 was $109.47 per month. As for Three UK, the typical monthly price was set at $67.97, adjusting for the currency conversion.
The plan details for both providers were as follows:
- Both plans included an Apple iPhone 5S with 16GB of memory.
- At the time, both plans required a two-year contract. With the plans, you received unlimited voice minutes and unlimited texting.
- Three UK offered unlimited data and required no upfront payment.
- Verizon Wireless required an upfront cost and did not feature unlimited data - at the time. However, it did offer 2GB of data, if that's any consolation.
In other words, not only was Three UK cheaper (and it still is), but Verizon Wireless lacked an unlimited plan and forced an upfront cost to the customer.
However, times do change, and it appears as if Verizon, AT&T, T-Mobile, and Sprint are closing the gap with UK providers, providing more affordable and valuable plans.
Let's examine these changes further.
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Comparing the Most Popular Plans
Let's take a look at the following base - both postpaid and prepaid - plans for individual consumers. We will be comparing the four main carriers in the US with the four largest networks in the UK:
US Individual Plans
- Verizon Unlimited Plan - $80/mo for unlimited data, minutes, and texts.
- Verizon (Prepaid) - $80/mo for unlimited data, minutes, and texts.
- AT&T Unlimited Data Plus - $90/mo for unlimited everything.
- AT&T (Prepaid) - $65/mo for unlimited everything, but no mobile hotspot or HD video streaming support.
- Sprint Unlimited Freedom - $50/mo for unlimited everything.
- Sprint (Prepaid) - $40 for 4GB of high-speed data, unlimited voice, and unlimited texts. Sprint has no prepaid unlimited plan at the moment.
- T-Mobile One - $70 for unlimited everything.
- T-Mobile (Prepaid) - $75 for unlimited everything. Because it actually offers less than the T-Mobile One plan, which is postpaid, this might not be the best choice.
UK Individual Plans
- Everything & Everywhere (2GB Pay Monthly) - $24 for 5GB of data, unlimited voice, and unlimited texts.
- Everything & Everywhere (Pay As You Go) - $20 for 2GB of data, 500 minutes, and unlimited texts.
- Three UK (Three Advanced Plan) - $16 for 4GB of data, unlimited minutes, mobile hotspot, and unlimited texts.
- Three UK (Pay As You Go All in One) - $26 for 12GB of data, 300 minutes, and 3000 texts.
- Vodafone (2GB Red Extra) - $24 for 2GB, unlimited minutes, and unlimited texts.
- Vodafone (Pay As You Go) - $26 for 4GB of high-speed data, 500 minutes, and unlimited texts.
- O2 (20GB Pay Monthly) - $28 for 20GB of high-speed data, unlimited minutes, and unlimited texts.
- O2 (Pay As You Go) - $20 for 2GB of high-speed data, 750 minutes, and 2000 texts.
As you can tell, when comparing US and UK cell phone bills the individual plans by the four major carriers in the UK are much cheaper than the plans from the big four wireless providers in the US. Even with the pay-as-you-go phone plans, they are still cheaper compared to the plans in the US.
Personally speaking, I'm a little envious of how cheap the plans are over there. However, despite the prices, many of the monthly plans in the UK are bound by a contract. In the US, the yearly contract policy among the four major carriers is dead.
Comparing Family Plans
Let's compare the family plan prices between providers. If you'd like to learn more about the US family plans, you can refer to our guide here.
US Family Plans
- Verizon Unlimited Plan - You can add lines to any plan for a line access fee of $20. You'll spend $180/month to share unlimited data with a family of four.
- AT&T Unlimited Data Plus - You'll receive a multiline discount off your total bill the more lines you add. It's $185/month for unlimited everything across four lines.
- Sprint Unlimited Freedom - Like Verizon and AT&T, Sprint eschews the family plan in exchange for the ability to add multiple lines to a single account. It'll cost you $120/mo to share unlimited data with a family of four.
- T-Mobile (ONE Unlimited Family) - For a family of four, you would be paying $140 for the service.
Related: Compare cheap cell phone plans to ensure you find the best value deal.
UK Family Plans
- Everything & Everywhere (Sharer Plans) - With EE, you can share a 4GEE Plan with up to four other people. These plans come with unlimited calls and texts as well as lots of shareable data. The best part is that you can add people to your plan whenever you want. The best part is that even if you purchase the One The Go Max Share Bundle Plan, you will pay only $34 per month for 16GB of data.
- Three UK (Family) - Three UK doesn't appear to have any family plans.
- Vodafone (Family) - As of April and May 2017, both Vodafone Red+ and Vodafone Family have been discontinued. However, Vodafone has stated via FAQ that details on alternative products to replace the service will be arriving soon.
- O2 (Sharer Plans) - O2 has what is known as Sharer plans. With these plans, you can share your data allowance among multiple O2 devices. What you'll need is an O2 phone or tablet on an eligible tariff. Once you have your lead device activated, you can add up to nine other phones, tablets, or sim cards to share the allowance. There are no line access fees with these shared plans.
While family plans are currently non-existent with two major UK providers, O2 and EE ensure that you're paying a cheap price. In fact, line access fees appear to be normal in the US, but not in the UK. With that being said, all four US major providers offer plans for families, even if they turn out to be far more expensive compared to UK family plans.
Why Are US Plans So Expensive?
You're not imagining your wireless bill sticker shock. A report commissioned in 2016 by the Canadian Radio-Television and Communications Commission (CRTC) ranked the US within the top three most expensive mobile markets in a group of eight major developed countries.
So why, oh why, are US plans so much more expensive?
There are several reasons behind high cell bills:
- Competition, or lack thereof: According to Sascha Meinrath, the founder of the Open Technology Institute at the New American Foundation: "The United States lacks meaningful competition in its cellular market sector, which leads to higher cell plan prices than a growing list of other countries."
- Expenses: Cell phones operate via radio waves. Buying the use of radio spectrum from the government is very pricey (as in, hundreds of millions to billions pricey). Then you've got:
- Towers to build
- Equipment to keep updated
- Retail stores to maintain
- Sales and marketing costs to get customers and keep them
- Support staff to help those customers with issues
- Taxes and fees: You aren't just paying for your wireless service. Cell phone taxes and fees - some required by the government, some inserted by your carrier - can make up more than a fourth of your bill, depending upon where you live.
- Questionable overcharges: All four major carriers have either been accused of or outright caught implementing shady practices:
- Verizon and Sprint have been fined a total of $158 million by the FCC for shady billing practices. The two companies hid extra charges in customer bills. Verizon was forced to pay $90 million while Sprint was fined $68 million.
- In 2016, unions reported to the FCC that T-Mobile was signing customers up for services they never ordered and charging them for said services.
- In 2014, the FTC forced AT&T to pay $105 million for hiding extra charges in customer cell phone bills.
While these unethical billing practices appear to have been stopped it's still a good idea to comb your bill in detail.
"The United States lacks meaningful competition in its cellular market sector, which leads to higher cell plan prices than a growing list of other countries."
MVNOs: The Cheaper Alternative
MVNOs - or Mobile Virtual Network Operators - are the perfect solution for American consumers who are looking for reliable, budget-friendly phone plans.
What Are MVNOs?
MVNOs are lesser-known wireless carriers that lease extra space on the big four major networks - AT&T, T-Mobile, Verizon, and Sprint - and sell service to you at a discount. You've probably already heard of at least one or two MVNOs, like Virgin Mobile or MetroPCS.
MVNOs can afford to give you cheaper rates because they don't have the high overhead and marketing expenses like the big guys do.
The fact that you're staying on the same infrastructure as the major providers use means no sacrificing network coverage or call quality.
Benefits of MVNOs:
- Cheaper rates - 50% off or more
- Custom plans that let you pick and choose exactly what you pay for
- The same four reliable 4G LTE networks you've always trusted
- High customer service ratings
- No contracts, credit checks, or early termination fees
- Freedom to bring your own phone and number
- Easy signup online - don't ever step into a store again
On top of all of those advantages of MVNOs you get similar features as you'd get with any carrier. Choose options like:
While customers in the UK have enjoyed these benefits and much lower cell phone rates for years, Americans are now starting to realize how much better a value MVNOs are.
How much can you save by choosing an alternative carrier? Use our cell phone savings calculator to find out.
Save Even More Money By Buying a Refurbished Phone
One of the best things about choosing a smaller carrier is that you can save a ton of money by opting for a used device instead of expensive phone payments.
Buying a refurbished smartphone that's one year older than the newest model can save you literally hundreds of dollars. You can then take that unlocked phone to any carrier you wish, without the burden of monthly installment payments.
Benefits of Buying a Used Cell Phone
- Get a similar smartphone for a fraction of the price of a new one.
- Free yourself from a two-year commitment to a device payment.
- Choose the carrier and prepaid cell phone plan that is best for you.
Learn everything you need to know about buying a used phone, including the difference between refurbished and used and what to look for in a reputable seller. Plus you can compare prices on popular models like iPhone and the Samsung Galaxy S series in seconds.
Sell Your Cell Phone
Don't forget that you can also sell your phone for cash to put toward another one. Even better, you'll get more money selling your phone for cash than you do when you trade in with your carrier for an upgrade.
There are huge wireless savings out there for you now that you know the scoop:
- Wireless prices in the US are some of the highest in the world.
- Americans pay more than twice as much as cell customers in the UK.
- MVNOs are quickly becoming the obvious choice for budget-minded consumers.
- You can save hundreds more - on top of the hundreds you'll save on your cell phone plan - by paying outright for a used smartphone instead of making payments on a brand-new $1000 device.
For some simple money-saving strategies you can start today to shave dollars off your bill, read our guide to how to lower your cell phone bill.