Should I cheat if the majority does it?
I don't want to report them, I probably don't have the guts to do it, especially because it's such a socially accepted practice. 


A "Snitches get stitches" mentality will not solve your problem. Cheating is unethical. You know that you are "at a disadvantage" if you keep your ethical behavior and the others don't. 


  Cheating is pretty easy though: one has the lecture notes and all the past exams with solutions on the phone and can easily consult them without being caught


You seem to know how people are able to cheat at the exam. I would suggest that you report how people cheat (not who) to the professor in charge of your exam. He will either be able to implement counter measures to prevent cheating or change the exam format. This way you can avoid denouncing specific individuals while still preventing them from cheating.