I am nothing, if not occasionally obsessive. I get fixated with certain projects, plans, or life goals 1 Well lately (as in the last 6-9 months), I’ve been rather preoccupied with finding the perfect, affordable cell phone plan.
The last time I was this worked up about hacking my status as a cell phone user, it was all about the iPhone. This time, it isn’t the hardware, it’s the carrier.
I have this long-standing disdain for how my data gets to my head. Whether it be of the internet variety, or the texting and talking variety, it’s all really just chunks of data. But so that we’re all on the same page, let’s confine our terms to the industry convention:
- data = internet access. Think web. Think email. Think Facebook. That’s data.
- voice = cellular phone calls. Self explanatory.
- text = text messages sent via SMS. This is old-school texting here, long before there were smart phones. But don’t believe for a second that they are as valuable as those cell carriers say they are. Profit margins for text messages are astronomical. And the value of said SMS messages are plummeting with the advent of other, freer platform messaging (like Facebook Messenger, iMessage, Google Hangouts, Skype, etc.).
Now the sweet spot in a smart cell phone (i.e., iPhones or any Android branded phone) plan, as I see it, would be to leverage more data heavy offerings in lieu of the more expensive voice/text services. Why? Well, that’s the whole point of a smart phone. These things are internet-gobbling dynamos. That’s arguably what they do best anyway: present the internet in amazing, fascinating, startling new ways to us consumers. Classic voice and text are two mediums that are nearly archaic, simply because they are nearly throwaway offerings in the data world 2.
All of these reasons have led me to often call cable TV and cell phone companies merely dumb pipes. I stand by that. The intelligence in our data consumption has moved downstream — into our little mobile internet gizmos. The value of the service isn’t in the pipe itself. And knowing that their product value was losing ground, those big dumb pipes did the only thing they could to retain customers: force us. The CEO of T-Mobile (!) summarizes it best:
“Carriers figured out a long time ago that they could make money – a lot of money – by forcing customers into restrictive, overpriced data plans. We changed it for smartphones and we’re changing it for tablets.”
I was floored when I read this from one of the big pipes! Speaking directly to the core problem in the cell phone market right now. As I dug more into his company’s offerings, I was even more impressed. But I’m getting ahead of myself.
On average, with AT&T, we are paying $135 per month for two cell phones, both iPhones. That’s a chunk of change. And how much service were we consuming? Take a look:
As you can see, our usage was quite low overall. So I began to look for alternatives. And there are many, many options. But it helps to realize a couple of key facts:
- If you have a GSM phone, there are only two infrastructure games in town: T-Mobile and AT&T. All the other smaller mobile companies are renting their antennae.
- When you sign up for a “cheap” phone upgrade, you are getting a reduced price because the hardware is subsidized by the carrier. It’s like a lease. You get the privilege of using this great phone, but you must stay with the carrier for 2 years. By the time the contract is up, you would have paid twice over for the retail cost of the phone. Early termination fees? Those exist to “recoup” the cost of the hardware.
- The above typical cell phone plan is what’s known as a post-paid plan. It is paid in full after contract maturation. A “pre-paid” or “pay as you go” plan is the non-contract alternative.
So contracts are bad, all agreed. But I found that the pre-paid alternatives were harder to get right too. And there are many:
But in the end, all of a sudden, that little T-Mobile CEO quote popped into my radar. And I was floored. The more I looked into it, the better it sounded. For a 2-smartphone plan, the first line is $50 / mo. The second is $30. This is their baseline rate, for 500MB of 4G speed data per month. But there is never an overage penalty. Instead, they just throttle you down from 4G to 3G. That’s very reasonable. Meanwhile, text and voice are rightfully “thrown in” at unlimited. Their coverage map is roughly equivalent to AT&T’s.
So we’ll be looking at a 40% reduction in our monthly bill! But the switch is only on paper right now. The SIM cards are in the mail. I’ll post an update when they arrive. Happy bill-slashing!