I have often wondered why we pay so much to call mobiles in Europe, but pay so little in the US. It has just been suggested to me what the reason for this is, and it makes a lot of sense.
In the US people pay to receive calls, in Europe we do not. Clearly then the mobile networks have to charge more to calls a mobile to cover the cost of running over the mobile network, ok, we can accept this. Why are these charges so much higher than the cost of the incoming call in the US though (generally included in very large numbers of inclusive minutes, making it similar in cost to the outgoing inclusive call in Europe)?
I shall pose a question. Who in Europe changes their mobile network based on the price of incoming calls? That is who changes network to save their friends on other networks and on landlines money? Noone, right, they may change net to save themselves money, but the outgoing call cost is what they make the decision on. In the US, however, the incoming call cost is charged directly to you, not to your friends, it is therefore to your advantage as a normal, slightly selfish, person to make the decision based on the cost of both incoming and outgoing calls, as you pay for both. By the nature of an open competitive market, then, the price drops faster when you have to pay for both sets of calls (you choose a net with inclusive minutes covering both incoming and outgoing, for example).
There are flaws, of course, for unknown reasons calls coming from abroad are not usually included in the inclusive minutes; this seems nothing more than ripping off the customer as it can’t possibly cost more for a friend in the US to receive a call from me here, than from me there, if I’m already paying the international part of the call, however this seems an extension of the old local/national issue and so is unfair but somewhat natural in a communication network’s evolution.
At least it makes more sense now how the competition works to give US customers lower prices, even with the strange necessity to pay for calls you haven’t chosen to make.
Maybe a solution to this that allows competition to work freely in Europe would be to force mobile companies to quote their termination charges in their adverts, so that people are fully informed such that anyone who is likely to receive more calls than they make can choose the network with the lower termination charges, hence competition works correctly. Anyone up for joining me in contacting OfCom with this suggestion?