Cellphone Plan Pricing

[RonBoyd]

Oh! I see. It is all our fault.

Is There a Method in Cellphone Madness?

“The whole pricing thing is weird,” said Barry Nalebuff, an economics professor at the Yale School of Management. “You pay $60 to make your first phone call. Your next 1,000 minutes are free. Then the minute after that costs 35 cents.”

In many ways, however, the least important factor in setting prices is the actual cost of providing cellular service. Cellphone companies resemble airlines, that other industry whose oblique prices exasperate consumers. Think of a cellphone network as one giant airplane that costs tens of billions of dollars to build. The cellphone companies don’t really know how much it costs to handle a call to Aunt Suzy in Syracuse, any more than an airline can calculate a specific cost for Seat 12B.

In 2004, Cingular Wireless (now AT&T) introduced what it called rollover minutes, with plans that allow unused minutes of talk time to be used in the following months.

An economist would see Cingular’s move as a price cut. After all, why buy a big plan as a cushion against what might be an occasional month of high use when you can accumulate your minutes from low-use months? In fact, it worked the other way around, encouraging people to buy larger plans. It turned out that people were happy to buy extra minutes if they knew they could keep them, rather than having them expire.

In May 2004, Sprint answered the growing complexity of cellphone plans with a much more straightforward approach. Its Fair and Flexible plan offered 300 minutes for $35, and each additional block of 50 minutes for $2.50. It was a plan that an economist could love.

Unfortunately for Sprint, customers hated it because their bills varied a great deal from month to month. ”Nobody thinks about getting the lowest cost per minute,...”

And of Prepaid Plans?

Lower prices that are predictable and easy to understand. Maybe an economist won’t find that weird. But will the consumer?

 

[JDARNELL]

After a 60 day trial I just decided to go prepaid. I was with verizon but switched to Net 10. Very happy so far. They have some customer service issues but so far I have been able to avoid them.

Tomcat98

 

[Goonie]

I got tired of trying to cypher out Cingular's rates and rate changes, and various and sundry other charges for this, that, and whatever.....and having a monthly bill.

I went out 2 years ago and bought a Tracfone, and am very happy with it!!! I pay once a year for service and minutes, and just go on with my life! No bills with weird-@ss charges on it to figure out. Heck, no monthly bill!!! It meets my phone needs.....I can call people, people can call me...that's ALL that I need a cellphone to do...no texting, no pictures, no internet, no frills, no fluff....just calls!

I love my 'prepaid' Tracfone...and it loves me!!!

 

[RonBoyd]

I can call people, people can call me...that's ALL that I need a cellphone to do...no texting, no pictures, no internet, no frills, no fluff....just calls!

You know, there was a time when I felt exactly the same way. In fact, it was only a few short weeks ago. I was, for the most part happy, with my ol' "just a telephone" cellphone for many (5?) years. Sure, I was a little envious of those who were able to take a snaphot before I could even remember where my camera was. Even more irritating was when I was in a Thrift Store and had to write in a notebook the model number of something that caught my eye and having to run home to Google it while the person beside me pulled out her phone and quickly looked it up.

(An example of this was the time I found a Schwinn Stair Stepper in a thrift store 25 miles from home. They wanted $50 for it -- a bit beyond my comfort level for used equipment. Nevertheless, I drove home and found that model sold new for over $1,800. I hurried back and it took four of us to load it into my vehicle. Consequently, I had to make a fifty mile round-trip detour to make that purchase. It was, BTW, in "brand new" condition.)

Our cellphone service had been provided by Qwest but they switched providers and required that we get new phones by October 31.

My first impulse was the prepaid route but our usage made that problematic for many reasons. For instance, that service is great if you are confined to a specific geographic area but not so hot if you travel as much as we do.

Anyway, long story short, we ended up with two Blackberry Storm2s for $10 a month less than we were previously paying and have 150 more minutes of usage per month.

So now, I carry, in my pocket, as much Internet access as I have on my desktop. I don't have to carry around a notepad any more. I simply type stuff into my phone. I have a calendar and calculator at my fingertips. Why I can even level my RV with this device. All for less than I had been paying and, to be honest, not much more ($10?) than what a prepaid plan would cost (remember we are talking about two phones here.) I can now, for instance, read the newspaper (NYTimes, USAToday, AP, etc.) while sitting in the waiting room at the doctor's office.

And this is just what I have learned to do in only the past fifteen days. Whatever was I thinking when I thought all I "needed" was a phone?

A "smartphone" is like a GPS unit, you can easily get along without them... until you have one.

 

[JDARNELL]

I also got a google voice number that I use and have it forwarded to my prepaid cellphone. That way if I change to a promo offer the number everyone has is the same.

Tomcat98

 

[Goonie]

You know, there was a time when I felt exactly the same way. In fact, it was only a few short weeks ago. I was, for the most part happy, with my ol' "just a telephone" cellphone for many (5?) years. Sure, I was a little envious of those who were able to take a snaphot before I could even remember where my camera was. Even more irritating was when I was in a Thrift Store and had to write in a notebook the model number of something that caught my eye and having to run home to Google it while the person beside me pulled out her phone and quickly looked it up.....

My first impulse was the prepaid route but our usage made that problematic for many reasons. For instance, that service is great if you are confined to a specific geographic area but not so hot if you travel as much as we do.....

A "smartphone" is like a GPS unit, you can easily get along without them... until you have one.

Been there, done that! Had the 'Swiss Army Knife' cellphone with all the bells & whistles....took pix, surfed the 'net, used many (but not all) of the apps. Also had the monthly bill to go along with it.....plus 2 other phones on the plan (girlfriend and my Mom).

I dumped Cingular/AT&T, along with their 3 phones & plan....and the girlfriend!

I don't know how other prepaid services stack up, but Tracfone service has been excellent everywhere I've traveled in the last couple of years....we average about 10k-12k miles a year, and over 15k last year...all land travel, no air. From Wisconsin to Texas, and just about every state from the Mississippi to the Atlantic, and from Maine down to Florida....and everywhere in between. Plus it's my normal 'day to day' phone, as I hardly ever use a land line...incoming or outgoing (been that way since '89).

I just think I'm gradually regressing back to an earlier, more simple, low-tech era.....less automated, less 'electronic-fied'. Like I much prefer radio over TV, and even silence or the sounds of nature over radio. And if it wasn't for having an elderly Mom who needs to get hold of me from time to time, I'd probably just toss the cellphone in the glovebox of the car for emergency use and not even carry one with me!

 

[Independent]

Oh! I see. It is all our fault.

Is There a Method in Cellphone Madness?

And of Prepaid Plans?

Here's another example of "weird" pricing. The standard cell phone contract comes with a new, heavily discounted phone and a 24 month committment. Maybe $10 of your monthly charge is used to recover the discount on the phone.

It seems that some company would provide month-to-month service for $10 less to people who already own phones and don't want to upgrade. But I don't see ads for this (maybe I just need to call and ask).

Any thoughts?

 

[Hershey102]

My wife and I each have a Tracphone that costs us about $9 apiece per month based on our useage. Since it is prepaid, and therefore each minutes has a cost, we use them primarily to stay in touch with each other.

It would be interesting to know how many cell phone users also pay for a hard wired phone at home. I do. Mostly because of stories I have heard regarding spotty cell phone coverage, power outages, etc.

 

[bizlady]

We keep a hardline at home- just feel safer if I ever needed 911. Also feel it is pretty reliable.

We did however just switch to a prepaid phone. We use it primarily just when traveling- both weekends and errands, and were averaging less than 30 minutes a month. So instead of $30 a month, we now have a cell phone and a prepaid phone card for $100 and we are set for a year. Better coverage too in our areas of travel....

 

[Tesaje]

Here's another example of "weird" pricing. The standard cell phone contract comes with a new, heavily discounted phone and a 24 month committment. Maybe $10 of your monthly charge is used to recover the discount on the phone.

It seems that some company would provide month-to-month service for $10 less to people who already own phones and don't want to upgrade. But I don't see ads for this (maybe I just need to call and ask).

Any thoughts?

Essentially, they all do. After your contract expires, you can just use the phone forever on the same deal that your contract was for. I did that for about 5 years after my initial contract expired. Also, the phones no-contract pricing is highly inflated so they don't have nearly that much to recoup off the contract.

I just bought a smart phone and new contract tho because I'm retiring at the end of the year and will no longer have work phones to take care of me. I'm in one of those places where there is no broadband internet except for cell coverage so this is a way for me to get decent internet speeds. Having the internet and other pda stuff at my fingertips is just a bonus. I still have a land line but may go all cell in the future - especially when I do my relocation shuffling.

 

[Dawg52]

I like my T-Mobile prepaid plan. Being a 'gold' customer, I get 15% more minutes added to the 1000 I buy for $100. Last me almost a year. Just lost my old phone though, had a senior moment. As I was putting my mutt in my SUV, I put the phone on top of it. Drove off never to be found. Bought a pretty nice Nokia flip phone at Radio Shack for $40. Doubt it will last as long as my old one though. I had it 5 or 6 years.

 

[MasterBlaster]

You know, there was a time when I felt exactly the same way. In fact, it was only a few short weeks ago. I was, for the most part happy, with my ol' "just a telephone" cellphone for many (5?) years. Sure, I was a little envious of those who were able to take a snaphot before I could even remember where my camera was. Even more irritating was when I was in a Thrift Store and had to write in a notebook the model number of something that caught my eye and having to run home to Google it while the person beside me pulled out her phone and quickly looked it up.

(An example of this was the time I found a Schwinn Stair Stepper in a thrift store 25 miles from home. They wanted $50 for it -- a bit beyond my comfort level for used equipment. Nevertheless, I drove home and found that model sold new for over $1,800. I hurried back and it took four of us to load it into my vehicle. Consequently, I had to make a fifty mile round-trip detour to make that purchase. It was, BTW, in "brand new" condition.)

Our cellphone service had been provided by Qwest but they switched providers and required that we get new phones by October 31.

My first impulse was the prepaid route but our usage made that problematic for many reasons. For instance, that service is great if you are confined to a specific geographic area but not so hot if you travel as much as we do.

Anyway, long story short, we ended up with two Blackberry Storm2s for $10 a month less than we were previously paying and have 150 more minutes of usage per month.

So now, I carry, in my pocket, as much Internet access as I have on my desktop. I don't have to carry around a notepad any more. I simply type stuff into my phone. I have a calendar and calculator at my fingertips. Why I can even level my RV with this device. All for less than I had been paying and, to be honest, not much more ($10?) than what a prepaid plan would cost (remember we are talking about two phones here.) I can now, for instance, read the newspaper (NYTimes, USAToday, AP, etc.) while sitting in the waiting room at the doctor's office.

And this is just what I have learned to do in only the past fifteen days. Whatever was I thinking when I thought all I "needed" was a phone?

A "smartphone" is like a GPS unit, you can easily get along without them... until you have one.

So you pay what ? Maybe $100/month to save a few pennies here and there.

In my opinion your phone is a toy and is a horrible platform to search the web on.

For what it's worth my (voice and text only) cellphone costs less than $5/month (STIMobile) and does the job just fine. I am not one who likes to gab on the cell.

 

[ERD50]

A couple Questions on switching to T-Mobile Pre-Paid

After seeing several reccs on this forum for the T-Mobile prepaid, I looked into it a bit more.

The Gold Rewards plan fits me very well - If I have this right, you put on $100 initially, that gives you 1000 minutes (plus 15% bonus minutes) and up to one year of service (assuming you don't blow through the minutes). And the real winner for us low-minute users, at the end of the year, $10 will add ~300 minutes, rollover any unused minutes from the initial 1000 , and you are good for another full year.

So, two questions - First, what is the cheapest way to get started on the plan? Are there occasional deals on the phones? Can I use an old T-Mobile phone that was on contract and just pay an activation fee (~$35?). When I looked at Costco, the phone was $60 - kinda blows away most of the savings for the first two years.

Second, I have had three AT&T Go-Phone prepaid phones ($100 per year to keep active) for several years, and since we use few minutes, and the minutes rollover, these have $100-$330 worth on them (but of no 'worth' to me as I don't use the minutes). Any reccs on how to sell these? The $300 worth of minutes with a phone should be worth something to someone. For $25 they can roll over the minutes and service for another three months. Any risks since these phones are tied to my name/address? I can clear any CC info tied to them, so that users would need to add airtime with a card bought at a walmart or wherever, and I read on a forum somewhere that you can change your address info but not your name.

Even getting $25-$50 for those current phones would help subsidize buying new ones. Lacking that, I may just try to donate them to some needy family if someone at a church or school can identify someone who could benefit from having a pre-paid phone like this.

-ERD50

 

[MasterBlaster]

Cheap Pre-paid plans to check out

I can't advise about T-mobile. When I looked at it, the cost for my service was considerably higher.

For rock bottom pre-paid plans check out

www.stimobile.com (not to be confused with T-mobile) they re-sell airtime on the sprint network. It costs ~9 cents a day to have the service plus around 9 cents a minute for calls. texts are 5 cents each. Since I only use a cell a few minutes every month this plan is perfect for me. I have used the phone in a number of Western states without problems (no rooming charge). i have also used it in Mazatlan, Mexico. (I believe that they add a few cents a minute for calls there). You have to buy your own phone with this service. Models are cheap but tend to be older styles.

I buy discount minutes online at Cheap International Prepaid Phone Cards , use the "save8" promotion.

also check out

Prepaid Cell Phone Cards | Prepaid National Cell Phones who has a similar pre-paid plan.
pagepluscellular has one plan that would suit me fine and cost around $40/year. You also have to buy your own phone - prices start at $30.

 

[Lakedog]

After seeing several reccs on this forum for the T-Mobile prepaid, I looked into it a bit more.

The Gold Rewards plan fits me very well - If I have this right, you put on $100 initially, that gives you 1000 minutes (plus 15% bonus minutes) and up to one year of service (assuming you don't blow through the minutes). And the real winner for us low-minute users, at the end of the year, $10 will add ~300 minutes, rollover any unused minutes from the initial 1000 , and you are good for another full year.

So, two questions - First, what is the cheapest way to get started on the plan? Are there occasional deals on the phones? Can I use an old T-Mobile phone that was on contract and just pay an activation fee (~$35?). When I looked at Costco, the phone was $60 - kinda blows away most of the savings for the first two years.

Second, I have had three AT&T Go-Phone prepaid phones ($100 per year to keep active) for several years, and since we use few minutes, and the minutes rollover, these have $100-$330 worth on them (but of no 'worth' to me as I don't use the minutes). Any reccs on how to sell these? The $300 worth of minutes with a phone should be worth something to someone. For $25 they can roll over the minutes and service for another three months. Any risks since these phones are tied to my name/address? I can clear any CC info tied to them, so that users would need to add airtime with a card bought at a walmart or wherever, and I read on a forum somewhere that you can change your address info but not your name.

Even getting $25-$50 for those current phones would help subsidize buying new ones. Lacking that, I may just try to donate them to some needy family if someone at a church or school can identify someone who could benefit from having a pre-paid phone like this.

-ERD50

You can use any T-Mobile phone -- just have to buy a sim card/activation kit for around $6.99 -- I bought a phone online for $19.99 and got a free $25 refill card. Here is the website where you can buy the activation kit: www.t-mobile.com/shop/Phones/Prepaid.aspx
Looks like their $19.99 phones are currently out of stock but if you are not in a hurry, they frequently have specials (for the free $25 refill card with any phone).

 

[Dawg52]

After seeing several reccs on this forum for the T-Mobile prepaid, I looked into it a bit more.

The Gold Rewards plan fits me very well - If I have this right, you put on $100 initially, that gives you 1000 minutes (plus 15% bonus minutes) and up to one year of service (assuming you don't blow through the minutes). And the real winner for us low-minute users, at the end of the year, $10 will add ~300 minutes, rollover any unused minutes from the initial 1000 , and you are good for another full year.

So, two questions - First, what is the cheapest way to get started on the plan? Are there occasional deals on the phones? Can I use an old T-Mobile phone that was on contract and just pay an activation fee (~$35?). When I looked at Costco, the phone was $60 - kinda blows away most of the savings for the first two years.

Second, I have had three AT&T Go-Phone prepaid phones ($100 per year to keep active) for several years, and since we use few minutes, and the minutes rollover, these have $100-$330 worth on them (but of no 'worth' to me as I don't use the minutes). Any reccs on how to sell these? The $300 worth of minutes with a phone should be worth something to someone. For $25 they can roll over the minutes and service for another three months. Any risks since these phones are tied to my name/address? I can clear any CC info tied to them, so that users would need to add airtime with a card bought at a walmart or wherever, and I read on a forum somewhere that you can change your address info but not your name.


-ERD50

Not sure if you can use an old contract phone or not. If it's a T-mobile phone I would think so. When I lost mine I called TM and they said I would need to get a TM phone, not just any phone. Radio Shack had a non-flip phone for $15 that looked OK. If it's just light usage, probably would be fine. I decided on the flip phone because the long legged brunette convinced me to try it. I have no idea on your second question.

 

[ERD50]

You can use any T-Mobile phone -- just have to buy a sim card/activation kit for around $6.99 -- I bought a phone online for $19.99 and got a free $25 refill card. Here is the website where you can buy the activation kit: www.t-mobile.com/shop/Phones/Prepaid.aspx
Looks like their $19.99 phones are currently out of stock but if you are not in a hurry, they frequently have specials (for the free $25 refill card with any phone).

Thanks Lakedog - that helps to know that they do offer a $19 phone sometimes, I'll wait for one of those. I can extend my current AT&T for $25/3 months, so I can wait for a deal if needed, and it gives me some time to look into selling or giving these away.

So only $6.99 for the Activation card - good. My kids are on the T-Mobile family plan, so I might be able to use one of theirs (son will be switching to his new wife's Verizon plan soon, so that phone will be available). It says any GSM phone (that's what I figured), I might even look to buy one on ebay or something.

-ERD50

 

[ksr]

After seeing several reccs on this forum for the T-Mobile prepaid, I looked into it a bit more.

So, two questions - First, what is the cheapest way to get started on the plan? Are there occasional deals on the phones? Can I use an old T-Mobile phone that was on contract and just pay an activation fee (~$35?). When I looked at Costco, the phone was $60 - kinda blows away most of the savings for the first two years.

-ERD50

I had to buy a new phone when I switched to T-Mobile last year (my previous plan was Tracfone). I found a basic, plain-jane phone for around $25 at Office Depot. This came with some starter minutes. Then I went to the website and did all the signup online. I paid $100 for one year of service and 1000+ minutes.

This year I had almost all my original minutes left, so I just added $10 to keep going for another year. Again, all done online.

 

[ziggy29]

I like my T-Mobile prepaid plan. Being a 'gold' customer, I get 15% more minutes added to the 1000 I buy for $100. Last me almost a year.

I still have most of the 1000 minutes (actually got 1200 in a promotion at the time) that I bought for $100 about four years ago. And since then, all I do is pay $10 a year to get another 30 minutes and make the entire remaining balance roll over for another year.

 

[tuixiu]

I like my T-Mobile prepaid plan. Being a 'gold' customer, I get 15% more minutes added to the 1000 I buy for $100. Last me almost a year.

Ditto. $20 for the phone, add $100 for minutes once per year.

 

[Lsbcal]

Is there anything special available if you'd like to get 2 T-Mobile phones (for DW and me)? Or do you have to buy each as a separate account?

Les

 

[Lakedog]

Ditto. $20 for the phone, add $100 for minutes once per year.

Same here -- use around 1000 minutes a year. If you buy the minutes from other sites, you can find even better prices on refills -- I think I have paid as little as $88 for the 1000 minute refill (and never more than $94).

 

[Lakedog]

Is there anything special available if you'd like to get 2 T-Mobile phones (for DW and me)? Or do you have to buy each as a separate account?

Les

I don't think they offer deals for multiple phones with prepaid since there are no fees other than buying minutes (after buying the phone), but you might check out their website to verify. I never really looked into that since I just have one phone.

 

[Lsbcal]

Thanks Lakedog, we just have one phone now too for DW. There are times it would have been nice for me to have one too.

Les

 

[ERD50]

Is there anything special available if you'd like to get 2 T-Mobile phones (for DW and me)? Or do you have to buy each as a separate account?

Les

As Lakedog said, no deals for prepaid, it is what it is. But, T-Mobile has a "Family Plan" for regular contract phones. I put our two kids on it when they were both off to college, cheaper than single plans for each (check their website for details).

But the best thing has been adding the T-Mobile@Home for another $10. Unlimited long distance for our home phones through the internet. And un-metered 24/7 calls to the kids on the Family plan.

-ERD50