I don't understand why people in America are so keen to pay for expensive monthly plans.

I pay $5-$10 dollars per month on average for my cellphone on prepay. It doesn't make sense all to buy a phone on plan.

Your problem is that you believe sensible plans are offered in the American market at all. Look at all the love people express for t-mobile's $30 / month plan. That's because it is leaps and bounds ahead of anything else you can get.

In China, I pay about US$15 every 3-4 months for a level of texting and voice talk that would easily cost $30 / month by itself in the US. (I don't have a data plan.)

I've tried going prepaid (also t-mobile) in the US. The economics worked out as long as I never expected to use my phone at all; if I expected anything, it was a money loss. And even while I expected nothing, I had to keep paying $10 / month so that all my paid credit wouldn't suddenly expire.

The irony of capitalism working better in China the the US is strong. What failed in the US? Under or over regulated? Or is it the lobbyists thing?

The market for phone voice service isn't exactly the entirety of each country. "What failed in the US", if we want to compare only the situation in the US with that in China, could easily be that people in the US have so much more money that phone service prices are nine times higher.

I didn't mean to imply entirety with my comment, but it does read that way, apologies. Another issue could be the artificially low value of the Yaun?

But this isn't China only. Even Europe is much cheaper then US. And eastern Europe is as cheap as China

US telecom market is mostly a duopoly (AT&T + Verizon) with sprint and Tmobile fighting at the margins. Combine with a profoundly uneducated user-base (when it comes to phone technologies) makes the job of the numerous MVNO's (straight-talk/simple-mobile etc.) much harder. Most people I know, even many who work in the tech industry, don't quite understand the concept of buying a device and a carrier plan as separate things.

This situation is not helped by the fact that the carriers have steadfastly refused to standardize on wireless technologies. Even the two GSM carriers (AT&T and T-mobile) have never agreed on the same set of frequencies for data... so eg., AT&T HS(D)P(+) devices (e.g. Galaxy Nexus, iPhone 4) didn't quite work on T-mobile and vice-versa. The regulatory agency (FCC) has basically been either helpless or complicit and maintaining the status quo.

Things might get a bit more competitive with LTE (with more standardized hardware etc.) but there doesn't seem to be any incentives for the big carriers to stop this effective collusion to start a price war. T-mobile seems to be breaking ranks in some ways but I haven't really seen a pricing strategy designed to pull the crowds yet even from them.

It isn't a matter of agreement on frequencies, it is that each company paid many hundreds of millions of dollars to get exclusive access to those frequencies during auctions from the FCC.

I pay T-mobile $100 for 1000 minutes that last 365 days (in U.S.).

The minutes are expensive and no data, but for light usage it's great. AT&T Go phone has the same $100 for 1000 minutes that last a year.

There are no $5-10 per month phone plans in the USA aside from things like Tracfone with 50 minutes per month.

Airvoice has 10/month for 250 minutes

Have you found a prepaid carrier in the US with adequate roaming coverage? Prepaid coverage maps are typically (always?) much, much weaker than contract coverage maps.

For voice, my T-mobile prepaid roams on at least some of AT&T.

Your math isn't correct. If one switches to T-Mobile in the US, you get pretty substantive savings. The con is that you don't get a phone subsidy.

I did the math a while ago. Don't know how it holds up. As a datapoint, we pay between $90-$100 for two phone lines with T-mobile. Includes 500MB data/tethering per phone, unlimited minutes in the US and text messages.

I, and quite a few people I know (admittedly perhaps not average consumers) refuse to sign contracts partly because the phones are so expensive to replace, and breaking the phone doesn't get you out of the contract. That means you need insurance, which adds to the cost. I would rather fully own my device, have the flexibility to switch carriers, and be able to downgrade my plan if my phone breaks or my needs change.

The biggest problem with that is most carriers don't give you a discount if you own your own phone. So you can either pay $50 a month and get your handset for $200 or pay $50 and get your handset for $600. Which one makes more financial sense?

Many carriers are starting to give discounts. T-Mobile does already. Also, I can use an MVNO for quite a bit cheaper than a subscription plan, but I need a phone to do that. Most of the MVNOs will sell you a phone, but it will be a either a full-price model, or a terrible piece of crap.

in 'emerging markets' like germany more and more people are getting PAYG sim cards due to the prices being much much cheaper. so much cheaper in fact, that it often makes economic sense to buy a phone unlocked and pair it with PAYG, compared to the on-contract alternative.