The Wall Street Journal recently ran an article that describes how consumers are adjusting to increasing cell phone costs. It quoted consumers who were cutting back on restaurant spending, weekend getaways and clothing purchases. Between 2007 and 2011 annual spending on telephone services increased $116 while it fell by $46 on food, $141 on apparel and $126 on entertainment. Family annual cell phone costs with more than one smartphone can reach $4000.
According to Labor Department data, American households on average spent $1,226 on their smartphones in 2011, up from $1,110 in 2007.
Carriers are offering faster networks and eliminating unlimited data plans. The result is that the fee clock is ticking faster without any limit on how high the total can go. Carriers seem to be happy with the situation, seeking to push revenues as high as they can by adding (and charging for) additional services. The big question is: when will consumers become fed up? So far they have been willing to cut back in other areas to afford their cell phones.
Retailers have worried that mobile technology would provide too much price transparency. They worry that customers are using stores as showrooms for their online purchases. However, it seems that telephone services are cutting directly into the money consumers have to spend in stores.
I wonder if every retailer offered free WiFi whether it would reduce customers' telephone expenses so they could spend more in the stores.