The price of mobile phone calls continues to drop

14/12/2012

Mobile phone calls keep getting cheaper. However, the hidden fees appear to be here to stay. These are the conclusions of a new report from the Swedish Post and Telecom Authority (PTS).

For the average user, the price of the cheapest offered mobile phone call dropped by 15 per cent between the first quarter of 2011 and the first quarter of 2012. In seven years, the price has dropped by 65 per cent.

Minute charging has become the standard

The hidden fees appear to be here to stay. They make it harder for consumers to compare different offers. Previously, it was common for mobile phone calls to be charged by the second or by every ten seconds. Now, charging by the minute is the norm. This means that calls lasting 1.01 minutes are charged as 2 minutes. The connection fees for calls have stabilised over the past few years but, compared to 2005, they have increased by an average of 40 per cent.

Price of mobile broadband cut in half

The price of mobile broadband for computers dropped by 47 per cent between the first quarter of 2011 and the first quarter of 2012, and by 58 per cent compared to the first quarter of 2009.

One problem is that there are significant differences between the data transfer rates that the telecom companies claim in their marketing and the rates actually provided to the customer. The PTS believes that the telecom companies should specify transfer rates in a way that better reflects what the consumer may expect, rather than what is usually referred to as the "up to" rate. This applies to both mobile and fixed broadband.

Open, city networks drive down broadband prices locally

The price of the cheapest, nationally available offer concerning broadband of at least 2 Mbit/s has been virtually unchanged from the first quarter of 2011 to the first quarter of 2012. In seven years, the price has dropped by 38 per cent. The price of the cheapest, nationally available broadband subscription of 100 Mbit/s increased by 26 per cent between the first quarter of 2011 and the first quarter of 2012.

Many smaller actors offer local broadband connections of 100 Mbit/s through the city networks. Such subscriptions are often sold at prices far below the national average, in areas where fibre network coverage is good and where several actors are in competition. The price can be 20-30 per cent lower than the cheapest, nationally available offer. However, areas with city networks where only one internet service provider offers subscriptions of 100 Mbit/s have prices in line with the national average.

New rules will help consumers compare services

The telecom companies must become better at explaining to consumers what they are actually entitled to when purchasing a service. To ensure this, the PTS is working on a new set of rules, which require the telecom companies to better clarify what is included in a service, and whether or not there are geographical restrictions concerning how a service works. The new rules are expected to be implemented during 2013.

Read the report ”Prisutvecklingen på mobiltelefoni och bredband” (Price development of mobile telephony and broadband) (Only in Swedish)

För mer information

Oscar Holmström, market analyst, phone: +46 73 640 58 17
PTS Press Office, phone: +46 -8 678 55 55