Help with Tchibo internet stick - Stuttgart West

[Lucy]

Thanks. It is amazing to me that the prices for data connections in Europe are so much better than in the U.S.!
Here it's $60 or $80 a month, right?

[inquisitor]

Yes, at least prepaid tariffs are dramatically higher in the US than in Europe. The North American market still suffers from the fact, that it's based on the receiving party paying (RPP) model. That means cell phone subscribers are charged even for incoming calls in order to cover the costs of running a mobile network, while the caller only pays a regular landline call when calling cell phones. So the cell phone subscriber has to bear all extra costs.
In Europe we have the calling party pays (CPP) system, where the cell phone subscriber does not pay for incoming calls, but the caller has to take the higher tariffs for calling a mobile number. So in Europe costs are shared among external callers and cell phone subscribers. The different tariffs for landline and mobile phones is the reason, why we have special numbers (with special area codes) for mobile phones in Europe, while American cell phone operators assign regular landline numbers to their customers.
As history has proven the European CPP-system has been accepted way better by the market than the American RPP-system and so European operators always had much more subscribers and more revenue per customer, which resulted in faster amortization of investments.
Another advantage of Europe is the higher population density, which makes it cheaper to roll out networks, since on average there are more subscribers per cell tower in Europe, which accelerates amortization.
Lastly the competition is stronger in Europe, as we do only have a single cell phone standard (GSM/UMTS) on all networks and so switching operators is very easy and doesn't require a new phone, while in the US you usually can't keep your phone, as that's either not supported by operators (when switching from one CDMA- to another CDMA-operator, e.g. from Sprint to Verizon) or network standards are just incompatible (when switching from GSM/UMTS- to CDMA-operator or vice-versa, e.g. from AT&T to Verizon, or due to the different 3G-frequencies AT&T and T-Mobile use).