Every time my mobile phone bill arrives, it's impossible not to think I've been robbed. There’s no way a data plan should cost as much as it does. And I’m on a budget carrier!
But it could be worse. A yearly study of data prices around the world finds that while the United States ranks among the 10 most-expensive countries for mobile broadband, even the cheapest plans in some countries are 1.5 to 2 times what Americans pay:
Be thankful you don’t live in the United Arab Emirates, where, market analysts at ABI Research say, a typical 5GB plan in 2011 set you back almost $70 a month -- yes, that’s American dollars -- without counting penalties if you go over the limit. Or Australia, where the same chunk of 3G Internet costs $52. That’s a little more reasonable, until you remember that, again, we’re talking about the cheapest, bottomest-of-the-barrel options in each market.
Singapore is an interesting case: It takes the idea of data caps to the extreme, giving you 5GB for practically nothing by U.S. standards but throwing a whole bucket of cold water on you if you mess up. For every gigabyte beyond the cap, you’ll be slapped with a $5.35 overage fee. Penalties in the Philippines are even more onerous: It’s $5 for every extra 15 minutes you spend online.
If you're a citizen of one of these prosperous nations, the fees are probably tolerable, albeit a nuisance. But what about in the developing world, where every cent counts? In Brazil, people are paying through the nose to get online. The cheapest 5GB plans cost consumers $120 a month in 2011 -- the same as buying 28 Big Macs in one sitting. (That's a lot of burger.)
To be fair, other goods are pretty pricey too -- Jeep Cherokees have been known to sell for $80,000, and Sao Paolo has earned dubious honors for its cost of living overall. But mobile Internet is a different beast.
“Brazil has a challenging landscape, and so the costs of infrastructure investment are very high,” said Darrell West, vice president and director of governance studies at the Brookings Institution. “It’s a large country; there are forests and mountains, and so it’s challenging for mobile companies to have the infrastructure that they need.”
Building out infrastructure is expensive enough on flat, empty terrain without having to contend with Brazil's unusual geography. To the country's credit, though, prices have come down dramatically since its current president, Dilma Rousseff, came to power in 2011. Thanks in part to Rousseff’s aggressive tax incentives, you can now get a low-end data plan for about $40.
That’s important because the Internet economy is set to become a major contributor to the larger global economy, and developing nations like Brazil will have an advantage if its citizens and businesses have access to the Web. By 2016, $4.2 trillion of world gross domestic product will come from Internet-related business, according to the Boston Consulting Group.
“It does hold back overall development if technology costs and mobile data are expensive,” West said. “If you have low prices, there's going to be greater usage -- and that enables many other forms of innovation.”