Among the hot gifts this holiday season are Apple’s iPhone, Samsung’s Galaxy S III and other smartphones. But along with the nifty new phones comes something decidedly less exciting and fun to shop for: the wireless service that allows the devices to surf the Web, send messages and make calls.
With four major carriers and several minor ones, each offering numerous combinations of voice minutes, messages and data usage, choosing a plan can be daunting. Here are some things to consider as you try to pick the right one for you.
NUMBER OF USERS OR DEVICES: Many carriers now offer subscribers a choice between individual plans that are tied to one user and one device and shared service plans designed for multiple users or devices.
Originally, these shared plans offered limited amounts of pooled voice minutes or text messages. But the latest shared plans offered by Verizon and AT&T offer unlimited voice minutes and messages for all users on the account and a preset amount of data usage that is shared among all users. In these new shared plans, users typically pay a monthly access charge for each device and a separate charge for their particular bucket of data.
These new plans can benefit individuals and families who talk and text frequently. But they are often pricier than plans that offer limited voice minutes or messages.
EXPECTED USAGE: You probably have a decent sense from past experience how much time you spend talking on the phone and how many text messages you send. But if you’re a new smartphone user, you likely have no idea how much data you’ll consume. Fortunately, there are some guidelines.
Illinois’ Citizens’ Utility Board has put together a chart that explains how much data smartphones use performing particular tasks. At the low end of the spectrum are sending and receiving simple email messages. At the high end are activities like streaming video or audio.
While data usage has been going up steadily, a study earlier this year by NPD Group found that the vast majority of smartphone users consume less than 2 gigabytes of data each month. And users can limit their usage of over-the-air data by connecting their devices to Wi-Fi hot spots. Data sent or received over such connections doesn’t apply to the wireless carriers’ monthly limits.
TYPE OF PLAN: Most smartphone users tend to buy the phones at subsidized rates in return for signing up for long-term — usually two-year — contracts. But that’s not your only choice.
Many providers offer no-contract prepaid plans. Users can typically cancel those plans at any time without incurring penalties. The monthly charges can be less expensive than they would be with longer-term contracts. And light users can often find low-cost prepaid plans that offer fewer minutes, messages or data usage than they would see on more traditional smartphone agreements.
But for heavy data users, prepaid plans can be more expensive on a monthly basis than longer-term ones. And prepaid providers typically offer older or slower smartphones rather than the latest models. When prepaid plans do offer newer phones, consumers typically have to pay the full, unsubsidized price for them, which can make for a substantial upfront investment. MetroPCS, for example, charges $500 for the Samsung Galaxy S III, a phone that AT&T offers for $200 with a two-year contract.
PRICE: If you’re upgrading from a feature phone to a smartphone, be prepared to see your monthly bill jump significantly, especially if you subscribe to one of the major carriers’ two-year plans. Some of AT&T and Verizon’s most costly individual plans cost $140 or more per month.
Consumers can save money by limiting their usage or choosing prepaid plans. MetroPCS, for example, offers a basic smartphone plan for $40 a month. It includes unlimited voice minutes, text messages and data usage, but after users consume 250 megabytes of data, the carriers slows down their Internet speeds.
Users who expect to consume lots of mobile data can also consider the unlimited data plans offered by Sprint and T-Mobile. T-Mobile offers an unlimited voice, text and data plan for $90 a month, and users don’t have to worry about having their speed throttled if they consume too much data.
COVERAGE AND RELIABILITY: Before you buy a phone or sign a lengthy contract, you should make sure your device will have service at the places where you want to use it. Each of the service providers offers a map on their website of their coverage areas. Plug in a ZIP code, and you should be able to see whether you will have service.
You can get a sense of how good that service will be by checking with RootMetrics, which collects data on the relative strength of carriers’ signals in particular areas. By looking at its maps, you find out whether you’re likely to have dropped calls or slow data connections in your area.
You can also check with Consumer Reports, which rates all the major and many of the minor networks based on the frequency of problems reported by actual consumers. In its most recent report, which it released this month, Consumer Reports rated AT&T as the worst overall provider nationally. The magazine rated Consumer Cellular, a low-cost provider that leases space on AT&T’s network, as its top-ranked carrier nationally.
But service reliability can vary widely from city to city and even within different cities. Your best bet may be to check with friends and neighbors to get a sense of their experiences with particular carriers.
RESOURCES FOR SMARTPHONE PLAN SHOPPERS:
If you’re shopping for a smartphone plan, here are some resources to help you pick the right one.
—Citizens Utility Board. Nonprofit Illinois consumer advocacy group. Offers guidelines on smartphone data usage. http://www.citizensutilityboard.org/ciTelecom(UNDERSCORE)DataGuide.html
—Consumer Reports. Subscription-based magazine and website published by nonprofit advocacy group Consumers Union. Periodically reviews cell phone plans and services. Latest ratings were published this month. http:/// www.consumerreports.org
—RootMetrics. Research firm that rates the quality of carriers’ coverage in some 82 markets. Separately rates carriers’ voice, messaging and data services and offers free maps that show service quality in particular neighborhoods. http:/// www.rootmetrics.com