1/7/2013 6:30 PM ET|
Cellphones' bigger budget bite?
Cellphones account for an increasing proportion of household expenses. How much have they really changed your bottom line?
As technology has advanced in the 21st century, mobile phones have morphed from functional devices used solely for making calls into sophisticated portable computers. Smartphone users are now capable of texting, video conferencing, surfing the Internet and playing music and video on their handheld devices.
With this evolution in technology has come a meaningful increase in the amount of money the average consumer spends on mobile phone services. Perhaps you have noticed that you are paying much more for your cellular service now than you were 10 years ago. Rest assured, you are not alone. Here's a look at how cellphones have evolved into an increasingly indispensable component of most people's budgets.
Cellphone bills have grown
Consumer spending on mobile phone service has grown significantly since the early part of this century. In fact, according to the Bureau of Labor Statistics, Americans spent an average of just $210 per year on cellular service back in 2001. That's less than $20 per month. This figure may strike you as unbelievably low. The average cellphone bill in 2010 was more than $63 per month or $760 per year.
Does this seem like a big increase in cellphone spending? Well, on an annualized basis, these figures reflect an increase of more than 15% per year from 2001 to 2010. This is a significant gain in spending on cellphones, considering that annual household expenditures grew only around 2% during in that period.
Cellphones vs. landlines
Not surprisingly, alongside increased spending on cellphones has come decreased spending on landlines. Why pay for a home phone when a mobile phone meets all of your communication needs and then some? Here's an example to illustrate just how differently the dollars in most people's wallets are being spent now versus 10 years ago.
First, let's assume that you spend $100 per month for all of your telecommunications needs. This includes your mobile phone bill, as well as your landline. Using this assumption, back in 2001 you would have spent $23 per month for your cellphone services. Your landline bill would be somewhere round $75. Clearly, landlines were much more important components of people's budgets at the outset of the 21st century. In 2010, your mobile phone bill would take a much larger share of your wallet and your landline a much smaller share. In 2010, you would have spent around $65 per month on your cellular plan but only $34 on your landline.
Cellphone bills and household budgets
Spending on mobile phones is becoming a more meaningful component of total household expenditures. In recent years, many people have cut back on discretionary expenses such as dining out and clothing purchases. However, spending on mobile phone services has grown at a steady pace. As a result, mobile phone expenditures have increased as a percentage of household expenditures.
The bottom line
Evolution and advancements are to be expected, particularly when it comes to fast-changing technology such as mobile phones. Given the improved capabilities of cellphones since the beginning of the century, it is no wonder that cellphone bills have averaged a healthy annual growth rate in excess of 15%. Alongside the rise of mobile devices has come the fall of landlines, which see far fewer dollars devoted to them today than in 2001.
Mobile phone costs are becoming an increasingly relevant component of consumers' budgets. It makes you wonder just how much you will spend on your mobile phone service 10 years from now.
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Love my land line.
I'm in a phone book so vistors can find my address.
Try sending a letter/package to someone that you don't have an address.
Works all the time.
I'm in the county with many hills so service and a cell phone can't
be counted on.
Yet another article that doesn't say anything meaningful. Yet another fluff piece. I think we were all aware of the trend; more cell phone use, less landline use. I think we all knew we were spending more on cell phone plans, too.
The only facts in this piece were the comparisons from 2001 to 2010.
Ok, so what?
How about some meaningful information that would make a difference, say a comparison of cell phone costs? Or more in-depth information about landlines, when they can be useful or necessary, and what companies are doing to shift their focus as more customers leave? Are more people using contract cell phones or pay as you go? Is the infrastructure keeping up with the demand for data use?
So many of the articles in this section are two or three paragraphs of fluff that any high school student could have written for an essay - complete with typos!
Wish I could get paid for so little work.....
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