By Aditya Gupta on July 27th, 2012
Verizon introduced its new “Shared Everything” data plan that is the “ONLY” data plans available for new customers starting June 28 2012. In a nut shell under the new pricing plan, a smartphone customer opting for the cheapest data bucket, 1 GB, will pay $90 before taxes and fees ($40 for phone access and $50 for 1 GB). Customers can add a basic phone, laptop and tablet to share data for $30, $20 and $10, respectively. Unlimited voice and text come bundled with the plan. The data allotments come in six buckets, ranging from $50 for 1 GB to $100 for 10 GB.
AT&T is expected to follow Verizon’s move with its own data plans priced along the similar lines. I suppose Sprint may also sprint towards similar pricing soon. These operators first got us hooked on to data services on the mobile network and are now fleecing money. This is outrageous!
Let us specifically look at what the new “Shared Everything” plan from Verizon means for consumers. Verizon plan looks like this:
To illustrate what this implies, here’s an example of what you may end up paying over the 2 year contract period with this plan.
This mind boggling sum of money forced me to think why should I tie myself to post paid contract with any of these providers? Are there plans out there that can help me save from being fleeced?
That is when I started to explore what are the options and this is what I found.
- Virgin Mobile offers “Beyond Talk” Plans for $45/$55 a month
- Net 10 offers $50 per month unlimited plan
- Straight Talk offers $45 per month unlimited plan.
- Boost Mobile has plans similar to Virgin Mobile called “Andriod Monhtly unlimited” at $55 per month unlimited.
Mobile virtual network operators (MVNO’s) use the network infrastructure of operators like Verizon, AT&T and Sprint. Virgin Mobile uses Sprint, Net 10 uses all the three operators, and Straight Talk uses both Verizon and AT&T. Most of us don’t really understand the MVNO business and are skeptic about their service quality. MVNO use the same infrastructure (which means same service quality levels) and offer better pricing and hopefully better customer service experience. The best thing about these operators is that they offer pre-paid plans and there are no contracts. Some of these allow you to bring your own phone to the network (even unlocked iPhones).
Let’s look at some of these plans. Virgin Mobile “Beyond Talk” plans:
Example of what a customer will end up paying over the 2 year period (for comparison with post paid contract plans) opting for these prepaid MVNO service providers. The smartphone considered for calculation is HTC Evo V (latest Andriod ICS smartphone) priced at $299. You can consider other smartphones priced anywhere between $100-$300.
Now let’s see what is the saving:
Net10 and Straight Talk have even better offers:
Clearly there are significant savings with some of these providers. Even in the case of family of three, if we do a realistic comparison and consider the data bucket of 6GB the cost per month goes up by $10. (Most of the MVNO’s offer 2.5GB per month which is still higher than 6GB considered for calculation for 3 people.) Adding $10 over two year period amounts to $240 and the difference reduces to -$60 for Virgin Mobile, saving of $300 for Net 10 and saving of $660 for Straight Talk.
And we haven’t even talked about taxes and other charges. Accounting for taxes that generally amount to another $10-$20 per month, adds anywhere from $240-$480 to the saving.
So the total savings over two years for a single user range from $700-$1000. For a family of two saving is in the range $500 – $1100 and for a family of three is in the range $300-$900. Even if we are on the conservative side the saving ball park figure looks close to $500 over two years.
Wait a minute, are there more savings? Hell yes!! Straight Talk on its website offers online discount. Unlimited 1 year plan is offered at $495. Over two years that saves additional $90. Boost Mobile has plans similar to Virgin Mobile but has something called Shrinking payments. With shrinking payments monthly payment shrinks by $5 for every 6 months you stay with Boost Mobile network (upto 2 years). Awesome! This can mean additional $165 saved over 2 year period.
So, why should one consider long term contracts? I cannot think of any reason (yes, there are in-network calls, but who cares when you have unlimited calling). While you try and think of reasons to convince yourself to stick with Verizon, AT&T or Sprint (why should T-Mobile be left behind.), I am off to cancel my contract. Meanwhile, let us hope that these telecom service providers stop ripping off their customers and creating a big hole in our pockets?
Savings here I come!!