Fact of the Week: Prices Consumers Paid for Wireless Phone and Data Services Dropped 18.6 Percent From 2002 to 2014, Mirroring an 18.4 Percent Decline in Prices for Telecommunications Infrastructure Technologies

John Wu April 9, 2018
April 9, 2018

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Technological innovation drives social welfare. As technologies advance, they become better and faster, which generates productivity growth, but just as important, they also get cheaper for the average consumer. One of the most critical components of the modern day digital economy—and the various information technologies that power it—is telecommunications infrastructure. From cell towers to fiber cables to undersea Internet cables, these vital components enable people and businesses to connect.

When the prices for these foundational capital goods decrease, the lower costs get passed along to consumers in the form of lower prices. This is especially so when examining the prices of various IT products over the past decade. From 2004 to 2014, the price for telecommunications infrastructure technologies decreased by 18.4 percent. This made it cheaper for companies such as AT&T, Verizon, and Comcast to upgrade their networks. This is one reason why the average price for wireless phone and data services decreased by 18.6 percent over this same period.