I’ve been looking to buy a phone since I arrived in Europe, and I’m continually frustrated by the awful, consumer-unfriendly nature of the mobile phone industry, both here in Europe and in the United States.
Both the US and Europe are terrible, but Europe definitely gets the short end of the stick. In the US, the primary model for cell phones is a long-term contract with a cheap (or free phone), and relatively cheap rates for service (plans are sold as a bulk $X/Y min per month, but most divide out to $0.04-$0.05 per minute), plus free long distance, free calls after 9 pm, on weekends and to other phones on the same network. In return for these perks, you’re stuck with the same carrier for up to 2 years, and God have mercy on the poor soul who tries to get out of his cell phone contract.
In Europe, the dominant model is a pre-paid plan. Rates are comparatively terrible (€0.10 – €0.30) even before the exchange rate. They vary widely depending on whether you are calling to a land-line or another mobile number, and even depending on which mobile carrier you are calling. Nobody in Europe has ever heard of free nights and weekends, and roaming charges when you cross international borders can quickly become astronomical. The last time I was in Europe, at one point I was getting charged €1.10 per minute for making calls with a British phone from Germany. It’s even more outrageous when you consider the fact that many European countries are smaller than most US states. The EU finally stepped in and capped roaming rates at €0.49 to make a call and €0.24 to receive. That’s still obscenely high in my mind, and it makes me wonder why EU regulation was even necessary. US carriers used to have roaming fees, but now they all offer free long distance. There’s clearly pretty major market failures in the EU telecom industry.
In theory, mobile phone networks in Europe are more “open” than those in the United States. All handsets use the GSM standard, and from a technical standpoint, it’s possible to easily swap a new SIM card into any handset to switch it to a new network. In practice, however, here in the Netherlands, I had been finding it extremely difficult to find an “unlocked” cell phone, which can accept any SIM card. At all the big stores here, the phones are sold in combination with a SIM card for a certain network, and the phone is “locked” to that service provider.
Trying to find an unlocked phone in the Netherlands is ridiculous. Whenever I asked at the major stores if I could buy an unlocked phone, they reacted as though I had asked if the phone could be used to call in a mob hit. Their voices would drop 10 dB and they’d say, “No, we don’t sell any phones like that here.” I need an unlocked phone so that when I leave the Netherlands, I can swap to a new SIM card for the next country and not pay roaming fees. On the advice of a Dutch local, today I went to a tiny, back-alley phone shop with a Turkish proprietor. Bizarrely, in Holland, buying an unlocked cell phone seems to carry a greater stigma than buying marijuana. While the coffeeshops, sex shops and prostitute windows are frequently out along fairly major thoroughfares, I really had to get lost to find this phone shop.
“Your phones, do you sell them unlocked?” I asked.
“Let me say, they can be unlocked,” he replied.
“Fine, what’s the cheapest one you have?”
“This one is 30 euro.”
“I’ll take it.”
He then unwrapped the phone from its box and followed an arcane procedure where he took the battery from the back of the phone, and socketed it into a black device with two wires protruding from it. One these was a standard Ethernet cable, the other was some sort of proprietary connector he plugged into the back of the phone (behind the battery socket). At one point he pulled out a knife and used it to either pare down or clean the connectors which fitted to the phone. To the Ethernet cable, he then connected a small silver cube with an Ethernet jack on the side of it. Finally, he pressed a button on the black box, and then gave me my phone and its charger. My interpretation of this procedure was that the small silver cube likely contained the unlocking codes for a variety of phones, and that the black box (powered by the phone battery) transferred them to the phone.
He seemed reluctant to give me the phone box and accompanying documentation until I asked for them. Perhaps this was because the box has a seal along the top which reads “Do Not Accept If Seal Is Broken: A broken seal indicates the contents have been tampered with, etc.”
The insane thing is that unlocking phones is explicitly legal in almost every country, including the Netherlands.
Anyway, the upshot of all of this is that I finally have a phone, it is unlocked, and I did not pay a fortune for it. However, you cannot call me because I still need to get a SIM card for it.
Your phone story is another humorous contrast of societies. Buying girls and weed on main street, no problem, an unlocked cell phone, only in a back alley. Isn’t the common U.S./E.U. thread that the companies want to capture customers and keep them? Your contrast of business models is intriguing. Market imperfections (read protected oligarchies) would seem to account for results.
When you say that 10 to 40 Euro cents is per minute cost, I think you might even be underestimating. In Ireland I remember not being able to find service for less than 15 cents per minute, even for off-peak calls to landlines. An on-peak call to a mobile phone could be as much as 45 or 60 cents.
I’ve been wondering for a long time what could possibly lead to the ridiculous differences in the price of cell phone service in the United States and Europe. I think your dad is probably right about the protected oligarchies, because I cannot imagine the kind of discrepancies you’re talking about without some sort of government interference. If you ever find out exactly how European companies manage to get away with their outrageous prices, let me know