You hear it all the time, how expensive cellphone bills are, especially in the US. Even worse with smartphones and data plans. This is true if you are using any of the major carriers, especially AT&T and Verizon. Yet whenever you try to find more information from the numerous tech “blogs” and tech “journalists,” their recommendations never go far from the big carriers that are ready to rip you off.
How much are we talking about? Well, Apple actually provides a very good tool on their website to compare the monthly post-paid plans between AT&T, Verizon, and Sprint. I am going to focus more of individual plans instead of family plans. US wireless carriers have been squeezing more and more money from their customers by simply eliminating choice.
Greatest example is Verizon, where your only choice is to go with the data shared plan. The table on Apple’s website shows the cheapest plan to be $80 a month for an individual with one smartphone. 80 freaking dollars a month just to use a smartphone! It’s ridiculous. The carriers are making the excuse that you are getting unlimited talk and text. Well, what if I don’t use that many minutes or text? You are stuck paying more than you need. To make it worse, that $80 a month plan only comes with 300MB of data. Although 300MB might be okay for some people, with the future being in the cloud, 300MB is nothing, considering we used to have unlimited/5GB data as the norm. To bump the data to 1GB, you have to fork out $90 a month. On the bright side, tethering and portable hotspot are included. However, this was a scam to begin with, as the ability to tether and/or do portable hotspot is the capability of your phone, not the carrier’s network. So US carriers have been charging users extra money to use the features of their own phones. Now those charges are “bundled in.” Having said all these, Verizon does have the power to charge that much money as their network coverage is considered to be the better one compared to the rest of the carriers, and people are willing to give them more money.
Next is Sprint. Cheapest plan is also $80 a month, with a tradeoff of getting 450 voice minutes and unlimited data. People that don’t really use minutes might prefer this, but it is still a freaking 80 dollars per month to use a smartphone! Bumping to 900 voice minutes will have you fork $100 a month! Seriously? People are complaining having to pay $10 a month for their prescription drugs, yet wireless carriers can get away with this highway robbery. Also, Sprint’s network is not the greatest. Sprint’s CDMA EVDO network is slower than even Verizon’s (which is already slow to begin with compared to HSDPA 3G). Their LTE network is very sparse as Sprint was doing Wimax instead of LTE as their pick for “4G.” The bright side, you get unlimited data (albeit with restriction on tethering, only up to 300MB per month).
Last but not least, AT&T. Like Verizon, AT&T is also pushing their shared data plan, where the cheapest plan would be $85 a month for unlimited voice and text, and 1GB of data. For $5 more a month, you get 1GB instead of 300MB on Verizon. Still, it’s 85 freaking dollar per month. At this point, you should wonder how people can even afford owning a smartphone. However, unlike Verizon, AT&T still offers their classic individual plan which gives you a bit of granularity (not much though) on your plan. Cheapest plan would be $60 a month, for 450 minutes, no text (pay as you go for 20cents per SMS and 30cents per MMS, another rip-off), and 300MB of data. Unlike the data shared plan, however, this individual plan doesn’t include tethering/portable hotspot. You have to pay an additional $30 a month (so $90 per month) to get those features and 5GB of data. This is a far cry from the old plan where you simply pay $30 for an unlimited data plan. Coverage wise, AT&T is better than Sprint, but not that great compared to Verizon. AT&T’s LTE coverage is more prevalent than Sprint’s. Also, AT&T uses GSM/HSDPA, so your phone selection is not as limited as the other two CDMA carriers.
For my subsequent posts, I am going to focus mostly on GSM/HSDPA carriers as I despise carrier locking, which is inherent to CDMA phones offered by Sprint and Verizon (with a tiny exception on Verizon).
So, to recap, Verizon’s cheapest plan is $80 a month for unlimited minutes and text, and 300MB data. Sprint’s cheapest plan is also $80 a month for 450 minutes, unlimited text and data. AT&T cheapest plan is $60 a month for 450 minutes, pay-as-you-go text, and 300MB data without tethering/portable hotspot. For $85 a month, you can have the shared data plan that gives you unlimited minutes and text, and 1GB data. Knowing this, with services like push email, twitter, Google Voice, Whatsapp, Line, iMessage, Facebook, etc, we are at the point that one can go by without any SMS, as long as one has data plan. This is why the carriers are eagerly “bundling” unlimited minutes and text and charging you an arm and a leg for data, because that’s the money maker with smartphones.
From those three, I say the winner is AT&T in terms of value. The tradeoff with Verizon is coverage. I would only pick Sprint if they offer LTE coverage in your area.
Then there’s the “other” GSM carrier, T-Mobile. T-Mobile is not featured on Apple’s website because T-Mobile does not sell iPhones… yet. It is mainly because T-Mobile uses an odd frequency for their 3G network, AWS, which is not supported by iPhones, nor many other phones worldwide. Thus if you use an iPhone on T-Mobile, you would stuck with 2G EDGE speed. However, this has changed recently. T-Mobile starts to re-farm their PCS 1900 band for 3G. The 1900 band is supported by many phones, including the iPhone. You can check airportal.de to see how the coverage is in your area. Knowing this, expect coverage to still be spotty. T-Mobile also has been promoting their HSPA+ 3G speed as “4G.” Although it’s fast, their coverage is not that great when you start comparing them to AT&T, let alone Verizon.
T-Mobile has been the choice for most people looking for value. Their post-paid plans offer more granularity and bang for the buck. Their cheapest plan with data will snag you for $70 a month that gives you 500 minutes, unlimited text, and unlimited data (2GB at 3G speed), but no tethering/portable hotspot. That’s not bad compared to the other carriers, although still expensive in my book.
T-Mobile also offers a “value” plan, in which you bring your own device (or pay the device in full). This plan allows you to go as low as $40 a month for 500 minutes, no text, and 200MB data. For the same features as above (500 minutes, unlimited text, 2GB 3G data), the price is $50 a month. That is much more reasonable, although there’s a catch. Despite you bringing your own device/paying the device in full, you are still signing up for a 2 year contract, complete with an ETF. In my opinion, that’s a total scam. The point of signing a contract is in exchange for a subsidy. If I bring my own phone, or pay for the phone in full, WTF the contract is for? So caveat emptor.
This is the first part of my post. At this point, you have to wonder how one can afford owning a smartphone, and how can these wireless carriers charge so much money, and people are still willing to cough up the dough. Couple reasons. First, most people actually have family plans (usually under their parents). This kinda reduces the per-person monthly cost, especially when you have multiple family members. Second, many big companies offer employee discount for their employees if they sign up with one of the major carriers (usually the big three, ie. AT&T, Verizon, or Sprint). Now, just because you are under a family plan and/or have an employee discount, doesn’t mean your plan is a good deal. Sure, it’s cheaper, but most people are still spending $60, $70, or even $90 and more a month for their cellphone bill, per person. That is a lot of money.
I was in that boat, on AT&T using an employee discount. At that time, I picked the bare minimum individual plan (when AT&T used to offer unlimited data for $30). I still end up with ~$60 a month bill after taxes. Imagine now, with those expensive plans, and the extra taxes you have to pay. I find those prices to be unacceptable. Thus my search for a better deal in the sea of MVNOs, coming up in part 2.