Australia is the cheapest country to operate a mobile phone, according to a comparison of mobile costs in 12 OECD countries.

The OECD has published a study of mobile pricing, examining the effect of up-front handset 'discounts' on total cost, and comparing pricing between countries.

The report considered three categories of monthly mobile expense: 100 calls with 500MB data, 300 calls with 1GB data, and 900 calls with 2GB data. For each country, the average of plans from two different providers in each category was converted into US dollars and US dollars purchasing power parity (PPP), which takes into account price differences for the same goods in each country. Plans considered were all post-paid, rather than pre-paid, and included the handset in the plan.

This measurement shows Australia has the lowest costs across all three categories:

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The report also highlights the effect that signing larger contracts has on the handset "discount". As the plan includes more phone calls and data, the percentage of cost taken up by the handset decreases (check "stack percentages" on the graphs to compare).

Another key finding was that it's cheaper to purchase your handset independently and then sign a plan, as including a phone in your plan results in a higher overall cost.