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Cell Phone Service so Cheap in India That Even Beggars Can afford it!

Cellphone use in India is so cheap that there have been stories that even beggars have cellphone. I did not see any beggars with cellphones on my recent trip but I have seen some maids and day laborers who make less than $10 per day afford a cellphone.  Let me outline the costs. (All costs have been converted to US dollars based on the current exchange rate 1 dollar = 44.5 rupees)

1)      Buying a SIM card. In order to get a SIM card it costs about $0.80 that is 80 cents!!! and you get 60 cents for talk time out of those 80 cents.

2)      Talk time: All incoming calls are free. So you don’t have to worry about losing minutes or balance on your phone if someone calls you. So giving other people missed calls is a huge thing if you are low on balance or something. However, if you want to call someone it costs about $0.013 cents per minute. So if you talked for about one hour it would only cost you $0.80 (80 Cents!!!). Also almost all plans in India are seconds billing that means you only get billed for the exact number of seconds that you talk it DOES not get rounded up to the nearest minute.

3)      Text messaging plans: This is pretty cheap too. I added a 10,000 text messaging plan that cost $1.75 per month. They also have another plan where you get 2,000 text message for 7 days at a cost $0.50 (50 cents). I used this plan when I only had a few days left before I came back and my monthly plan expired.

4)      Internet: This is the only one that is little expensive I guess because the 3G infrastructure in India is not as well built and as prominent as it is in the US but it is still about the same price.  650 MB of 3G internet was about $10 but once I ran through my 650MB of 3G and realized the signal strength and 3G speeds were not as good as they are in the US I got an EDGE plan. Yes, they allow you to choose if you need 3G speeds or if you can live with EDGE speeds and just need data every now and then.  The EDGE plans are very cheap 2GB of EDGE costs $2 and this was more than enough for me because I mainly only used me phone to check emails, which were usually pushed to my phone, chat with friends and occasionally look up directions.

5)      Obviously there are no subsidies for phones in India and all phones have to be bought at retail price but there are some phones like the Samsung Guru which costs $20 and it is the most basic phones but for people like me who have unlocked phones from the US we can just go to India get a sim card and we are good to go.

So all in all in think I spent about $25 on full phone with phone, text, and data service for two months. I think activation costs would cost me more in the US. So why is it that cellphone usage is so expensive here in the US? Is it because the labor is so much more expensive than other countries better infrastructure? What are your thoughts?