More Confusing Phone Plans

Category: Mobile

The major mobile phone service providers (AT&T, Verizon, Sprint) are coming up with new plans faster than ever. Consumers are tempted to switch carriers, service plans, and phones, with the promise that they'll save money on their monthly bills. AT&T has their 'Next' plan, Verizon offers you 'More Everything' and Sprint wants you to join a 'Framily'. But the fine print can be baffling! Here's my analysis…

"When you can’t dazzle them with brilliance…"

You can search Google to find the other half of W.C. Fields' famous sarcastic proverb. It aptly sums up the pricing strategies of cellular service providers. They can’t (or won’t) actually save you money, so they throw out ever more confusing pricing plans and just tell you they’re saving you money. Trust them and buy!

It has reached the point where consumers need impartial analysts to analyze and explain the complexities, pitfalls, and loopholes in phone service price plans. That’s a sure sign that the plans are excessively complicated and deliberately designed to deceive customers. Considering the details of these plans illustrates the point.

I recently wrote about Sprint's Framily Plan which lets consumers form groups of friends and family, with the promise that everyone's monthly bill goes down as new "framily" members join. But under that simple exterior, it has dozens of mind-numbing caveats, terms, conditions and restrictions.
Confusing Phone Plans

AT&T's "Next" plan starts out simple enough: "Choose any one of our latest smartphones. You only pay taxes up front and there's no down payment or activation fee. A low monthly installment plan is added to your bill. Any time after 12 or 18 months, you may trade in your smartphone for a brand new one!"

But the last sentence begins the complications. Twelve OR 18 months; what does that depend upon? It depends on whether you sign a 20 or 26 month contract for a "qualifying" service plan, which must include data as well as voice. Oh, and you need "qualifying credit;" and the offer is available in "select locations only;" and despite the "any one of our latest smartphones" statement, the fine print says, "qualifying smartphones only; excludes tablets." If you return or exchange a phone within 14 days there may be a restocking fee of up to $35. There are other qualifications and gotchas in the fine print, too.

What's Included in "Everything"?

I recently wrote about some alternatives to the Big Three cellular companies, in my article Five Low-Cost Mobile Phone Plans. If you want simplicity and savings, I encourage you to check them out.

Verizon’s "More Everything" plan promises unlimited talk and text, and a larger shared pool of data for up to ten "devices" on a single account. Unlike AT&T, Verizon does not limit "devices" to smartphones. Tablets, basic phones, a USB Modem, Verizon Jetpack portable wireless router, or any "connected device" including cameras and automotive gear (e. g., diagnostic or GPS computer) is included.

More data is included: twice the data allowance of comparable previous plans. You can also get more upgrades, which really means you can get them faster than AT&T allows; if you pay off at least 50 per cent of the balance due on your hardware, you can upgrade it. You also get more cloud storage – 25 GB – and more international texting, if that matters to you.

But does it cost less? Well, the smallest price I can get from Verizon’s online calculator is $55/month (before taxes and fees). That’s for one device and a measly 250 MB of data per month. Exceed that paltry data allowance and you’ll pay a staggering $15 per gigabyte or fraction thereof.


Competition is a good thing. It's generally leads to innovation and lower prices. But this trend of ever-increasing complexity in mobile phone service plans is not a good thing. You might save a few bucks on your phone bill by switching providers, or by trying a new service plan. But will the new company offer good service where you live and work? Can you bring your existing phone, or will you have to buy a new one? Is there something in the fine print that will make your expected savings disappear?

One of my acquaintances has had it with the complexities of cellular service plans. "I give a sales rep 30 seconds to explain everything he’s selling," he says. "If it takes a second longer I say, ‘NEXT, please!’ and cut him off. Life is too short to spend deciphering great deals."

Have you checked out any of these new offerings from AT&T, Verizon or Sprint? Post your comment or question below...

 
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Most recent comments on "More Confusing Phone Plans"

(See all 25 comments for this article.)

Posted by:

Carole
24 Feb 2014

I've had a ToGo Phone with AT&T since 1996. It suits me just fine, because I rarely make a call on the phone. In fact I had so much credit on the phone, I haven't made a payment since April, 2012. I will for the first time in June, 2014.


Posted by:

s.mcclain
24 Feb 2014

Bob...right again! When Sprint's lips are moving....RUN!!! So disappointed and angry, gotta wait it out....


Posted by:

Bob
24 Feb 2014

Got the FreedomPop after you wrote it up. No complaints other than short battery life and no costs since buying the phone. hmmmmm.....


Posted by:

BrianR
24 Feb 2014

Great article Bob. I understand and agree with all your points. I have helped many people navigate these troubled cell plan waters. These companies make a lot of noise with their new offers, but I don't see the real savings for customers. I've recently been asked to look into Consumer Cellular as an alternative to the larger, more well-known, carriers. So far, I don't see any hidden "gotchas". You pay for the full price of the phone, you don't have to buy from them, the plans seem cheaper, and they use AT&T's network and hardware, so the service should be equal to that of AT&T. I like that they don't try to complicate things. Yes, you pay a lot for the phone since you probably have to pay full price (unless you can find a deal or used phone), but after that, you are in control. Month-to-month, no contract, easily adjust plan if/when needed. Sounds good. Do you know anything about this company and/or their plans? Am I missing something? Maybe you can add them to your comparison.


Posted by:

Deborah in Oregon
24 Feb 2014

I went to the Sprint dealer I signed with because my phone was acting "hinky" and I still had 6 months left on a 2 year contract. His recommendation was to jump to a new "no-contract" plan (he said Sprint doesn't have contracts anymore). For a new phone, instead of a contract you pay a "small amount extra" (it added about 30% more) per month to pay off the phone. BUT he would have to "take" my old phone because the old contract was not paid up. I swear he held out his hands as if to take the phone from me and just then I felt like he was Rumplestiltskin and I was signing over not only my firstborn but every future child, as well. (Yes, I know one mustn't feel thus about mere "possessions" even if they ARE at your side 24 hours a day.) At any rate, I have paid $200, plus 18 months of a 24 month contract, but I own nothing. Of course I didn't do that. Point is...when deciding on a plan you also have to weigh the present and future value of the phone against the amortized cost of the phone and whether or not you will even be able to sell it to mitigate the cost of a new phone if you upgrade before your term is satisfied. More complexity.


Posted by:

Fred
24 Feb 2014

Bob: Not a comment, but I think you meant "simplicity" in your sidebar.
Have enjoyed your columns for years.


Posted by:

Arlene
24 Feb 2014

I tried to switch my AT&T $40/mo unlimited phone service (voice only) to the new lower, 'senior plan' and the rep said it was $20, but the 'phone charge' was $20.00 MORE, giving me the exact same price...WHAT A RIPOFF! I laughed when she said consider the 'data package free' - when I said I wanted ONLY VOICE - no net access. What kind of savings for seniors is this?????????


Posted by:

Bill
24 Feb 2014

I switched from Verizon to consumer cellular 2 months ago. From $37 to $18 month. Cellulars Bluetooth phone cost me $#35 and $18 month taxes included. Not text 200 minutes a month. All I need


Posted by:

Tom
24 Feb 2014

I've used a Tracfone Motorola flip phone for years with a Double Minutes feature. Been looking at smartphones, bought a Tracfone Samsung Centura Android at Target, price $129 but at register was $80, which comes with a Triple Minutes, Text, and Data lifetime feature. Works for me as I try to use Skype as much as possible at home. Enjoy your articles.


Posted by:

Terry
24 Feb 2014

Thanks for yet another timely article, Bob. My suggestion to everybody is to look at the various MVNO's out there. Same networks, lower prices. A few years back, after a LOT of research, my wife and I switched to Platinum Tel because of AT&T's bad service and pricing. P-tel's pre-paid prices were 2cents/text, 5cents/min talk and 10cents/picture message. They used the Sprint network and we NEVER had any problems with dropped calls, etc., unlike when we were with AT&T. A BIG PLUS - their customer service was exceptional. We ended up spending about $25/month total for our two phones. When our phone usages skyrocketed, I did my research again and settled on an unlimited-all plan for my wife - $45/month on straight talk using Verizon's network - and a $35/month Virgin Mobile plan for me that uses Sprint's network. We also bought our first smart phones via those providers - both perfectly adequate for our needs and bargains at only around $100 each. The absolutely only negative issue we have had was with Straight Talk's customer service. A minor billing problem became an ORDEAL to get corrected, though it was finally accomplished. My Virgin Mobile service has been good with no problems, technical or cost-wise. Sorry for the length of this but high-value and high-quality cell service IS available and it does NOT cost big $$$. Last thing, Bob. Thanks for years of keeping me informed and protected.


Posted by:

Philip Ahrendt
25 Feb 2014

Check out ConsumerCellular.com for what I have found to be both an affordable and a reliable cell service provider. Its plans are simple and straight forward, with the option of adjusting your plan during any month depending upon your usage needs. Consumer Cellular offers the added benefit of a discount to AARP members on its services.


Posted by:

James
25 Feb 2014

Very good and needed posting to open some people's eyes! You never mention Metro PCS and they have been supplying a great no contract plan before any of these abusive large companies ever thought about doing it. Simply they have no contract, no gimmicks and a straight monthly charge of $40 including all taxes and charges (just $40)that includes unlimited talk, text and 500 MB at 4G and after that you get unlimited 3G. You have to buy your phone and can buy a new one as many times and as often as you want. I got an LG smart phone for free after their promotion and have been paying $40 ever after. I live in Florida and the service is excellent. If you don't want 4G you can drop to a $35 per month with all unlimited. I'm so happy of having left ATT that every month my bill was a different amount. They always found a new charge to add some taxes and some their own charges. Now I pay $40 and it never changes. I don't know why people don't line up at their doors unless you want an I phone. We need to support companies that give us a fair value w/o the confusing mumbo jumbo. There are smaller companies like Booth Mobile that also will give you a fair deal unlimited all for $35 except data which is sometimes limited in 4G.


Posted by:

Mike in Colorado
25 Feb 2014

I switched from Verizon to T-Mobile about three and a half years ago. Now they're even better with the Simple Choice plans. I have a family plan that starts at $80 for two lines for unlimited talk, text and data. The data gets throttled to 3G speeds after 500 MB but you can bump that to 2.5 GB for an additional $10/month. I also added two additional lines at $10 each, so that's $100/month for four lines with unlimited talk, text and data. I did have to spring for the extra $10 to get 2.5 GB of data for my daughter, but the rest of us are usually well under the 500 MB.


Posted by:

Phil
25 Feb 2014

Amen to all, Bob

Years ago, when we were traveling all over the country in our RV we went with Sprint. But hardly ever had any service except in major cities. So in '92 we switched to AT&T and have stayed there. We have two phones and we paid $69.95 per month. THEN we got new phones...iPhone for the wife....Android for me. Guess what. Up went our bill $40 per month....$20 for each phone because they were "smart" phones. Never mind that we never text...never use data...etc. If ya got a smart phone...it's gonna cost you that much extra. Now why did we get smart phones? Because, at the time, we simply could not find good quality "dumb" phones. They were all trash. So not our service costs us about $110 per month. But, at least, we did pull the plug on our old home phone & that saved us $30. Got tired of the blasted marketing calls. We registered our number on both federal and state "no-call" lists but the tele-marketers ignore that. We are about to start looking for a better deal.

Thanks for this article.


Posted by:

Chris
25 Feb 2014

With Virgin Mobile, I get unlimited data, text, and email, and 300 minutes of talk for $35 a month.


Posted by:

Sharon H
25 Feb 2014

Unlike so many today, I don't walk around with a phone glued to my ear or texting away while tripping over a curb. I can't text anyway; I had a broken wrist that did not heal properly and texting is very painful.

I have lived with my GoPhone for so long that an X-Ray tech at a hospital looked at it and said "I haven't seen one of those in 5 years". Proud to say it is still working fine. I just buy minutes and use the phone for minimal conversation. It has served me well.

When my hubby's contract with AT & T is finished, he is going with TracFone. Phone plans are always designed to profit the company, true, so we give them as little as possible. Corporations already control most of our lives. It is possible to enjoy life without their idea of what we absolutely, positively NEED.


Posted by:

KP
25 Feb 2014

I have been with T-Mo for over 10 years and only changed plans with them when it made my bill cheaper. I love the customer service. I live in the SF Bay Area, so coverage isn't an issue and like someone else said, I am usually at work or home or close to someone's wi-fi and end up using very little of own my data. Not pushing T-Mo - to each his own - I just know I have loved them, and have heard many complaints from others about their issues with other carriers.


Posted by:

Joe
26 Feb 2014

Cell providers as a group stink. Three years ago I switched from Verizon to Boost Mobile (sprint). Saved a bundle and had good service. Moved 15 miles - still in a major metro area - and the service was unusable. Their customer service was the worst. First blamed system upgrades. Then said nothing was wrong. Also tried three different phones. Finally got to their corporate customer service and they said that all three towers in my area were below acceptable levels. That was the last I heard from them as they stopped responding to follow-up requests as the service never improved.

Just switched to T-Mobile and while it is more expensive, I'm just happy to have working cell service. $70/month is reasonable for unlimited talk(including free calls overseas), messaging and data (only 500mb of 4g, then downgrades).


Posted by:

MmeMoxie
27 Feb 2014

Cellular Phone Plans, be they contractual or pay-as-you-go ... Basically ... Suck canal water!!! Remember, all of these companies are in this ... To make money, nothing less will do. So, to think that you will or are getting a "good deal", is delusional at best.

One thing that I have learned ... Ask your friends and acquaintances that live in your area ... Which cell service is the best in not dropping calls and getting good phone reception? When, I lived in Rome, GA ... Verizon had the "best" service, for getting excellent to good reception ... I had AT&T and could easily see the difference. No mystery, Verizon had more towers in the area, than AT&T, therefore better reception.

Please, remember Verizon and AT&T use different methods of sending and receiving signals. Verizon uses CDMA ... While, AT&T uses GSM. Please, I don't understand what the letters mean, I just know and have read, that CDMA and GSM do not mix! Basically, cell phone companies are broken down to either CDMA or GSM, for phone reception. There is also, an EDGE, but, overall the other two methods are the most popular, for cell phone companies.

So, one cellular company starts an Ad Campaign on "lowering" cell plans ... To be competitive, all cellular phone companies, do the same thing. However, most of the caveats are in "legalese" ... Meaning, that most people don't understand what they have signed up for. In other words ... The "Fine Print" on the contract. Pay-As-You-Go is pretty straight up and forward, about what you can pay for or not pay for. Still in the end ... Remember, ALL Cellular Companies are out to make money!!!


Posted by:

Steve
01 Mar 2014

As a person who has grown up in a family business business and studied business at school, your article points to something that bothers very much about business marketing these days. That is, today’s business marketing never seems geared to offer the straight deal anymore. Instead, “business marketing" has come to mean "confuse the customers as much as you can" so that you may ultimately extract more from them without them knowing it. This sort of "trickery" is dirty and low and it's why i've always said that if a company really wants to differentiate themselves from others these days, the only thing they really need do is offer a straight deal to the customer. Any marketing campaign as such would be so rare now, customers would flock to it as they would consider the company to be exceptional.


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