Reduce Data and Text Messaging Bill

Don’t Overspend on Data and Text Services

Cut your data and text messaging bills.    This is the first in a series of suggestions to help you reduce your cell phone bill.

Five big picture trends are behind the recent carrier push to get more people to subscribe to text and data plans:

• The price of voice calls continues to drop:   Unlimited plans for most carriers are $70 or less, with the $40 plan now containing enough free minutes to satisfy most people’s needs
• Almost everyone has a cell phone, so growth rates are slowing
• Carriers have invested billions in 3G (and coming 4G) data networks, and want to recoup that cost
• It is an easier sell, as many phones have full QWERTY keyboards, large display screens and better web browsing experiences
• These more sophisticated phones now cost the carriers more to purchase, increasing the up-front cost to acquire new customers

As a result, the carriers need to rely more heavily on non-voice services to achieve their goal — a higher revenue per subscriber.   Of course, this is the opposite of our goal as consumers — we want to pay our cell phone carrier as little as possible each month.

Until recently, the cell phone and plan component of a subscription were pretty independent.  Now, however, carriers have segmented phones into three types: Feature, Multimedia/Messaging, and Smartphone, and have instituted some minimum plan requirements based on the type:      The 4 large national carriers all require a data package (around $30) in the rate plan if you want to buy and activate a smartphone.    For multimedia/messaging phones, Verizon requires a $9.99 data package while AT&T requires a minimum of $20 in data and/or text add-ons.

With that background, a few informational comments and tips.

• Bundle text messaging: With carriers charging $0.20 each way for casual messaging, the bill can quickly add up.  For example, just 4 a day will cause you to spend over $200 extra per year.  In most cases, even one text a day is enough ask your carrier about bundles.   However, if you are only a moderate user of messaging, don’t immediately go for the unlimited bundle, as that might be a waste of money as well.   Use our text messaging optimizer to figure out what bundle you should have.
• Family texting: On family plans, each line can have its own text plan, so worth evaluating individually
• Smartphone vs. multimedia phone: If you are thinking of getting a smartphone, but most of your non-voice activity is text messaging, it might be more economical to get one of the quick messaging phones that have a physical full QWERTY keyboard.  You’ll save the $30/month smartphone data fee.  Keep in mind the minimum charges by AT&T and Verizon on these phone types, however when you are making the comparison.
• Smartphone termination fees: Verizon has doubled the termination fee on smartphones (and a few multimedia devices) to $350, although this declines by $10/month as the contract goes on.
• Estimate your monthly bill: Our CellCalc^TM rate plan comparison tool takes many of the above issues into account, making it easy to find the plan that minimizes your monthly costs.
• The lowest monthly price:    The phones are expensive (relative to contract plans) and the selection isn’t as good, but a service called Straight Talk (available online and at Wal-Mart) offers unlimited voice, text, data and directory assistance for just $45/month.

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