Are You Actually Paying More Than $3 A Minute To Use Your Cellphone?
The LA Times brings up an interesting point. You may think you are getting each cellphone minute for about $0.10... but are you really? Or are you paying for more minutes than you use?
The Times says that a new report shows that the average cellphone customer pays more than $3 per minute.
Researchers arrived at the average $3.02-per-minute charge by comparing the average number of minutes charged in more than 700 San Diego consumers' telecom bills and dividing by the average number of actual minutes used.
"We knew it was a myth that wireless costs were going down," said Michael Shames, UCAN's executive director. "But we were blown away by the actual costs."
The results are skewed by the small amount of people who pay for a large amount of minutes and only use a few — but even with those people removed the average is from $0.50 to $1 per minute. Of course, you also have to keep in mind that the study seems to only have included "any time" minutes and not the free night and weekend or in-network calling minutes that many cellphone customers get with their plans. Still, it sounds like a lot of minutes may be going unused.
The organization behind the study is pushing for less complicated cellphone bills and simplified taxes so that customers are better able to understand their usage and choose the plan that fits them best.
Talk isn't cheap? For cellphone users, not talking is costly too [LA Times]
(Photo:hellochris)
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I consistently use my phone to talk more on weekends and nights than I do the rest of the day. Why would they make a report that did not include those periods?
You pay for the type of usage that most fits your needs, not the type of usage that is cheapest. I can go pre-paid and save money, but it would be a complete pain in the butt because I make calls often. It's not always about saving money just to save money. I'm contemplating a smartphone because connectivity is becoming increasingly important to me, personally and professionally. Is it cheap? Not as cheap as if I were going to go pre-paid, but again, it's about what suits your lifestyle and your needs. Just because you pay more, doesn't mean it's not worth it.
Seems like a study in search of a problem
I have AT&T and get 450 min a month -- the least amount you can get -- and I have rollover. I always have a toooon of extra minutes. It's sad, really, how little I use my phone -- and it's the only phone I use! But, still, I have unlimited data and I use the crap out of that and then some, so I think it balances out.
The rollover minutes DO come in handy -- every so often I actually make it to and above my 450 minutes, generally when something dramarific is going on in my home town/with my family.
Only including any-time minutes is a huge error.
Suppose I have a $50-a-month plan with 500 minutes. So $.10/minute if I use the max.
If I talk for 1000 minutes on in-network and night/weekends and 200 minutes, according to them, I'm actually paying .25/minute.
But if I include all of my minutes, I'm really paying slightly more than $.04.
It's not like you can get the "free" nights and in-network calls without buying the minutes. This story is laughable.
"Researchers arrived at the average $3.02-per-minute charge by comparing the average number of minutes charged in more than 700 San Diego consumers' telecom bills and dividing by the average number of actual minutes used."
Am I missing something, or does that make no sense at all? How do you divide minutes by minutes and end up with dollars per minute?
It sounds like what they actually did was divided the number of charged minutes by the total cost of the bill. In which case they're not just excluding nights and weekends, they're excluding free mobile to mobile calling or other free calls that various plans offer. This is silly, because those calls wouldn't be possible without paying for the service. How can you not include those when calculating the cost of calls made with the service?
@nakedscience: that's one of the reasons I'm switching to AT&T - Verizon doesn't have rollover, and though I get 700 (or so) minutes now on their cheapest plan, I'd rather downgrade to fewer minutes because I don't use anywhere near 700 - it just happens to be their cheapest plan. I use mobile to mobile all the time, so it seems like Mr. Pi and I should be fine with 450 minutes.
Like nakedscience, I have AT&T and the 450-minute plan, although no unlimited data usage. I have 200 text messages, and the most I've used was about 100. Since a lot of the people I call are also on AT&T, I don't use a lot of my time. But this was the lowest plan available to me, and this is my only phone, so I guess I don't mind too much. Saves me the trouble of a landline.
A lot of these reports seem to be more like PR stunts for the organization that comes up with them than anything that holds any actual value. I think news organizations love them since they are prepackaged stories that don't involve actual reporting, just regurgitation.
Any flaws in the study are worth picking over, but I think the notice paid to the general trend is worth paying attention to. There are definitely lots of people who pay an awful lot but make very few calls.
I may be one of the "corner cases" but I definitely fall into this trap. I have the bare-minimum family plan that my wife and I can have with T-Mobile and still have unlimited data for my Blackberry, but the truth is that we only use about 30-60 minutes per month TOTAL (including free nights/weekends).
By habit, perhaps because I've had a mobile phone since 1991, back when they were still hellishly expensive, I minimize cell conversations. Most calls are less than 3 minutes and of the "I'm on my way home, what do you want me to pick up at the store" variety.
Our only hope to reduce our monthly costs is to convert my wife to a prepaid plan, since her usage is similar to mine and she doesn't need data, but this will not save us all that much because the cost-adder for T-Mobile's "family" plans is pretty reasonable. (Compared to the cost of a minimum plan for even a single person who makes very few calls)
The problem for us is that the lowest plan we can get for two phones (due to combining my phone onto my husband's plan) has a LOT more minutes than we need. But it's still just a few dollars cheaper than if we'd continued to have our two separate plans. We have a lot of minutes between our phones though, due not living away from each other part of the week. But I think when our contract is up, I'll investigate pay-as-you-go plans.
I have the smallest plan Sprint had available at the time - 450 minutes a month. I use maybe 40 of those minutes most months, but have occasional spikes of activity due to business that can go as high as 300 minutes - maybe 2 or 3 months of every year. I so wish I could get a plan that had 150 minutes a month and would let me bank some of the unused minutes to cover the spikes. They'd still be selling me many more minutes than I will use. (Commenters, save your electrons and don't recommend I switch to prepaid or to another carrier: both of those are off the table for me.)
I also have a cellular broadband plan, unlimited use, because of the same spiky activity. When I need it, I use it very heavily and it is a critical resource, but many months I don't use it AT ALL. Again, I wish I could buy a smaller plan that would let me bank minutes against the spikes.
Taken together, my costs for these services can be as high as $2.50/minute on low use months. BTW, I don't have any text or data plan on my cell - I use my netbook and cellular broadband access for that - it's way better than any data-enabled cell phone, and it still fits in my purse.
I came to this conclusion a good while ago, with the added wrinkle that even if I were using all my minutes, a lot of that is a created need; if I had a plan with fewer, I would spend less time on the phone. So, I can save money by talking less on the cell and using email, facebook, Skype, et al. more.
That's why I have a prepaid phone (net10 is my flavor of choice) - that ten cents a minute sounds like a lot, but I wind up paying very little a month, something like $10/mo I would guess.
pecan (reply is not working for me...don't know why) - Yes, you SHOULD pay for usage that fits your needs, but more often than not, people don't. I worked for AT&T for awhile, and I'd talk to people who kept going grossly over their minute allotment each month, and begging them to change their plan so they didn't have a $400-$500 overage each month (plus they wouldn't call in yelling at me again). More often than not, people would say, "Oh, no. I'm only paying for 700 minutes a month. That's all I need."
The simple truth of the matter is that, for the most part, people don't have a clue what their wireless usage is like. And then when they realize that they need to fix something, they don't know what is available, or what information to trust.
The best way I can illustrate this, is to use myself and my siblings on our family plan. I'm on a family plan with my mom, two sisters and a brother. When I first joined the plan, I wanted unlimited messaging. I knew that my siblings already had the capabilities, just wasn't sure of what option they had. My one sister had unlimited messaging on her line ($20/month), the other sister and brother each had a media net bundle (400 texts, 1MB of data a month = $10 each), but were constantly going over on their messaging. They also paid for their messaging options seperately.
When I joined the plan, I sat down with my siblings and told them that A) they were paying for something that they weren't using (the 1MB of data) and B) they were over paying. I told them, add a family messaging plan. Unlimited messaging for everyone on the family plan, it's $30 a month. Divide that by 5 people on the family plan, and we all pay $6 a month for unlimited messaging (which I need more than my minutes!)
Moral of the story? Learn to read your wireless bills and learn what options are available.
It seems that they may have their math wrong. I use my phone very little. Only once or twice a day, usually. I just looked at my phone bill from last month, I used a total of 284 minutes, which is about 9 minutes on the phone a day.
My bill includes data for iPhone, but I'm going to use the bill total to keep it simple. The bill total was $72. $72 divided by 284 minutes = $0.253/minute. Now if we take minutes that were actually charged (not included in nights and weekends) that number shrinks to 49 minutes used. $72 divided by 49 minutes = $1.46/minute.
I am not a phone talker, at ALL, so I think I'm proably on the low end of the minutes used spectrum. So either people in San Diego don't use their phones at all (doubtful), or their plans are INCREDIBLY expensive (also doubtful). My guess is someone did the math wrong, and flipped the numbers they were dividing by. If you divide incorrectly and divide $72 into 284 minutes, you get $3.44/minute (wrong answer), but flies with the study.
@nakedscience: I have that same plan and use only like 60 minutes a month, but I always come real close to my 1500 text limit each month so it is still worth it to me to have it.
On an unrelated note, I am completely baffled by the number of people I see who apparently can't go anywhere or do anything without a phone stuck in their ear. What on earth are they doing that requires that much constant contact? Are they really generating enough content to fill all of that time? If so, I'm in awe, but in reality I doubt it...they're probably just gossiping. My point with that is that if people analyzed their quality use of their cell phones and eliminated the fluff, most probably could go with much smaller plans.
The people that benefit from these types of studies are those that typically don't understand how cell phone plans are sold. When my wife was away in college her parents got her a cell phone to make the 9 hour drive to and from school with, keeping in mind this was a round trip drive she made maybe 3-4 times a year. In that case a pre-paid phone would have been the best option, hands down. What actually happened was that my (now) Mother in law went into the cell phone place and walked out of there with a monthly plan, a phone, a leather belt clip case for the phone, a desk charger for the phone, a car charger for the phone, an insurance plan for the phone, just about everything available in the late 90's for cell phones. When they say there's one born every minute they mean it.
Bottom line, they didn't do their homework and got screwed for it. So the point of this study I think is to get people thinking about what they use and how they pay for that usage and maybe re-adjust their products to better meet their needs and budget. To me this seems like common sense, but to other people... not so much.
@nakedscience: +1 for rollover minutes! It helps as my wife and I are on the 700 min. plan, and some months (holidays, traveling, family emergency, etc.) we tend to max out or go over, while average months we're around 600. It saves us the cost of overages and about $20/month since we don't have to upgrade to the next tier for a rare thing.
@Keter: You could switch to the Sprint Basic plan for $29.99/month. It would save you $10/month, but would only give you 200 minutes, no mobile-to-mobile, and N&W starting at 9PM instead of 7PM. It also does not allow for Company discounts which can often make the more expensive plan cheaper. So if none of those extra features are needed and you do not qualify for the discount I would suggest this route?
Yeah, @pecan 3.14159265, the rollover really makes sense for me. Now that I've had the same plan for a few years, I have a ton of extra wiggle room -- I never, ever have to worry if I have enough minutes, even if I know I'm going to be on the phone a lot. It's really nice.
It's about a week into my current billing cycle, and I have 422 minutes left, and 1,028 rollover minutes.
I guess prepaid would work for someone like me, but I like the convenience of my contract, and of course the unlimited data/text which I use the CRAP out of.
@keter: I agree, to an extent. Since we don't have a landline, we use our cell phones for every type of mobile communication. I can frequently be seen calling customer service or making appointments. There's fluff (some people make talking on their cell phones a hobby) but there are certainly people who don't have landlines and must use their phones for communication. And it also means that if you're trying to meet someone at location X, and you can't find it, it's often easier to call them up and ask rather than wander aimlessly or stop people on the street.
And the point is, people like the fluff. We like talking to our friends, don't we? Part of the enjoyability of having a cell phone is the mobility, and we tend to take that to heart when we need to get out the door but we still want to talk to our friends about what we watched on TV last night.
I'm in the low volume category since I'm mostly an office slave or at home. I've used NET10 for a year. I'm VERY pleased with the service -- it's a great way to save money. I bought the phone on Amazon -- it's a nice Motorola w camera, internet, etc. My cost is $15 per month for 150 minutes and roll-over. I enrolled in the automatic monthly credit card charges, so there is nothing I need to remember each month in terms of continuing the service.
The same pay as you go service costs more with the big cell providers such as ATT mentioned in the story. I recommend a service such as NET10 to anyone with low call volume. $15 versus $50 is not a small savings (in my book)
@Mr_Human: really? I think that researching where people overspend is actually quite helpful. If some people reevaluate their cell phone plan in light of this and find that they would be better served on another plan, then good for them.
$35 a month for about 2000 minutes used (mostly In-Calling) so less than 2¢ a minute is just fine by me.
I tend to talk on my phone a lot (hello brain cancer) and I put it on speaker when driving home and talk to a few different friends.
This study is seriously flawed.
based on their estimations, a customer who is paying a 100$ a month phone bill is only using 33 minutes a month.
Yeah, Right.
By the way, I use about 800 minutes a month (NOT COUNTING Mobile to Mobile, which is another 500), divide that by the amount I am currently spending on my phone service (60$) and it works out to about .07$ a minute. Count my mobile to mobile in and I'm paying .04$ a minute ... and I have data on my phone!
bottom line: cell phone companies are charging more than their service is worth. period. they've found many ways to rape the consumer.
Dear God who cares? If the consumer thinks what they pay is worth it then why should they not be allowed to pay it? Who cares if they could get a better deal? If they wanted a better deal they would have looked for it.
And this study is a joke as has already been pointed out. So there's nothing worse than trying to make a moot point even worse by using ludicrous methodology. How do you make moot point worse? You make it work against you instead of not doing anything at all.
Chalk another one up for a waste of society's time and money.
@gatewaytoheaven:
You said "acquisition of a girlfriend"...
maybe one day if you are lucky, you can 'spin off' some children lol
@nakedscience: ATT/Cingular removed the $29.99 plan a few years ago and made the 450min the bottom plan. I thought about going to Pay-As-You-Go or something similar, but the charges are pretty similar with 0.25min or 0.10min with a $1/day fee.
@gatewaytoheaven:
"With the recent acquisition of a girlfriend..."
Acquisition? Did you go to the girlfriend store to pick her out? If so, please let me know where this store is...
@MikeHerbst: Consider switching to prepaid. You'll probably save a fair bit of money. Page Plus Cellular is a great option for people who don't use a lot of minutes- it uses the Verizon network, but has costs as low as 6 ccents per minute. You have to top it up every four months, and there's a monthly $.50 fee. Lots more info here.
Did any prepaid services every get blackberry plans? I mainly use mine for sms and emails. I got payperuse voice for 40 cents a minute but rarely use it. I have a grand central number that I have set up to go directly into my voicemail box provided by youmail. I never recieve my calls directly but do get a mms and email when I get one and listen to it over mms. Still I spend $55 a month before taxes and extra fees and don't even have a voice plan. I've never used over 20 minutes in a month on my line. I tend to just call people back on phones I happen to be near, usually my work phone.
@bigmil87: I would think normally because many plans offer unlimited minutes so they could not get an accurate percentage of use for these time periods.
My grief with paying for cell phone usage was that with rollover, I accumulated so many minutes extra that I was never using the 400 minutes I had to pay for (that was their *smallest* plan).
@WBrink: Yeah, that sucks. Their "$39.99" plan ends up being something like $54 after taxes, fees, and if you don't want to pay-as-you-go for texts.
@gatewaytoheaven: holy sparklebutts, batman! an hour a night on the phone with the gf? and you haven't run out of things to say yet? stop putting "snookums" and "sugar-pie sweetie honeypunch with a cherry on top" in every sentence and you can probably get those calls down to 10 minutes.
@EarlNowak: I'd go with a verizon phone for prepaid, but many carriers, ATT included, give you free calling (after your daily usage fee) for in-network callers. If I did that, I'd use about 2x the minutes I'm "using" now.
@pecan 3.14159265: Verizon DOES have a cheaper Family Share Plan that they use as a loyalty tactic, FYI.
@corinthos: I don't think prepaid plans support Blackberries or other smartphones.
@I_am_Awesome: Here's how - they're calculating how many minutes you're using out of how many you purchased and based on that you get your monthly per minute cost.
If you bought 500 minutes for $40 and only used 60, then your technical per-minute cost that month is $0.66 cents a minute. As opposed to $0.08 if you were to use all your minutes.
@pecan 3.14159265: keep in mind that you're going to have to use minutes for all of those 'mobile-to-mobile' minutes when you switch carriers, since that only works for in-network numbers.
Calexia: What's the cheaper family plan Verizon offers as a loyalty tactic? I really want to know, cause the whole reason for my leaving them is because AT&T is cheaper.
@lalaland13: I had that same plan, and with rollover I had accrued something like 2000 minutes over a 5 year period. I got fed up with paying $50 for never using any minutes at all and went with their prepaid.
@RandaPanda0283: AMEN! I'm often amazed how many people won't pay more per month (when they are USING a high amount of minutes), and yet wind up paying hundreds in overages. By the same token, though, if someone is averaging 300 minutes of usage, why pay for an unlimited plan (and yes, I've seen that happen)?
It's all about being aware, and I wish more "average people" would be attentive to their plan details.
The study is interesting, but really limited. I have a 500 minute My Circle plan with Alltel (soon to be Verizon) and I may have 60 anytime minutes but 2000 mobile to mobile minutes that are not nighttime or weekend calls. According to this study, I'm wasting money even though I'm paying for unlimited calls to the people in my circle.
I hardly use my minutes. In the last 4 months alone, I've used what... an average 49 anytime minutes and 13 mobile-to-mobile and weekend minutes? I've accumulated about 4,000 rollover minutes ever since. What's worse is that I've got an iPhone 3G, so I'm not sure if I'm happy at all. I might even eat the ETF and just go prepaid - to hell with a fancy phone.
stre: Using minutes once I switch carriers isn't an issue since both of us are switching and will be on the same carrier (we only use M2M with each other).
I think generally speaking, this study is flawed (I mean, the post makes mention to this fact as well).
I'm getting an outstanding deal of my cell phone service, and I value my being able to access the internet (~4gb/month) and text message (~5-6k/mo) more than I do anytime minute usage (100-300/mo). With the recent acquisition of a girlfriend, I've hit about 2300 night and weekend minutes (as opposed to generally using about 500/mo).
If I recall correctly, the study took place in San Diego, with a relatively small population. For the most part, they're out partying anyways. They don't need to be on their phone.