By David Gracey
Competition is a cornerstone of capitalism. Two years ago, T-Mobile cellular launched an assault on the big carriers by slashing the cost of their service plans. At the time, T-Mobile was losing market share and needed to do something drastic in order to remain a viable company. Becoming a large, low cost carrier has allowed them to do that. So far the plan is working for T-Mobile and forcing other carriers to adjust accordingly in order to stay in the game.
The Gracey household has 4 cell phones on a shared family plan. My 8th grader is constantly reminding my 4th grader that she will have to wait two more years in order to get HER cell phone. Any time we make a change of some sort, it is a huge disruption (for them) and takes many hours (for me) at the cell phone store, so this exercise is avoided at all costs. Our cellular lines were finally out of contract so I made the trek to Costco to shop. Costco is offering $70 rebate cards for each phone line, so that’s $280 back to the Graceys. We were definitely staying with Verizon because of the coverage. We tried AT&T several years ago but there is a big coverage hole in the middle of Brookhaven, so they weren’t an option. Plus we have all gotten used to Apple Apps so we wanted to stay with iPhones. So off to the store I went and actually had a better-than-expected experience (low bar, so keep that in mind).
I recommend the Costco kiosk because they resell all three of the big carriers: Verizon, AT&T, and T-Mobile. This made for a pleasant discussion with the agent because she got the same commission whichever way I went. I did, however, make the mistake of shopping on a weekend. If you go during the week, the wait is much shorter.
Verizon recently revamped its data plans. They just announced new, simpler plans that do not require a 2-year contract. How liberating! I’m now paying about $140 for four lines with 10Gb of shared data and unlimited talk and text (click here for how to minimize cellular data consumption on your device). On top of that, the cost of our new iPhones is about $27 each per month for 24 months. Apple and Samsung phones are pretty much in the same ballpark on price but there are cheaper options for phones if you want. Verizon waived the activation fees for us; I’m not sure if that’s standard operating procedure for them or if that deal expires at some point.
Regardless, the process of getting a new cell phone is a royal pain. That said, a few things that are better now than the last time I changed phones:
- Better plans. Verizon recently announced that they have eliminated 2 year contracts. This is very liberating! Even though I probably will never change carriers, it’s nice to know I can if I want to. If you get a new phone every 2 years, you won’t save a lot of money on the new plans, however, if your phone last 3 years (with teenagers, I’m lucky to get 6 months), you’ll save about $400.
- No phone subsidy. Phone subsidies have been eliminated. Instead, Verizon now charges list price for the phone ($749 for my iPhone 6) but gives you same-as-cash terms over 24 months. That’s handy. And much simpler. (No more “but phones are free” comments from my kids. I like to remind them just how much a new phone costs and that shuts them up and hopefully makes them treat it better.)
- No swapping SIM cards. The activation is all handled over the air. No swapping out cell phone SIM cards. In fact, I didn’t even have to bring in the other 3 cell phones to the store. Once we activated the new phones, the old cell phones stopped working. Actually, WiFi continues to work, it’s just the cellular service that stops working. You can keep the old phone or give it to your 4th grader to use for listening to music or playing games.
And don’t forget about the smaller carriers. Consumer Reports has given some very good ratings (or at least better ratings than the big guys) to smaller, local carriers who offer very competitive plans with a good selection of devices.
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