Smartphone wireless plans didn’t used to be so complicated. You handed over about $200 for the phone, tried to get by with the minimum amount of voice, text and data — most carriers charged about $70 per month — and paid a little extra if you needed more.
Now, carriers want you to figure out exactly how much data you’ll use, down to the gigabyte. Verizon, AT&T and T-Mobile would also like you to stop paying up-front for a subsidized phone and instead pay the full price in monthly installments. In exchange, they’ll give you cheaper service, and may even let you upgrade to a new phone more often. But the discount you actually get depends on which carrier you’re on, how much data you’re using and how many people are on your family plan.
And just when you think you’ve got it figured out, the carriers change their pricing structures again. That’s what happened this week when Verizon announced its “More Everything” plans, and last week when AT& T introduced its Mobile Share Value plans. The goal of both plans is to make early upgrades less of a ripoff than before.
So here’s what we’re going to do: Below are two charts comparing the prices of the four major carriers as they exist in February 2014. First we’ll compare their standard plans, and then we’ll compare the early upgrade plans, in which you trade up to a new phone every year. For simplicity’s sake, we’ll assume everyone’s getting a $200 phone, like a 16 GB iPhone 5s. Finally, we’ll calculate the long-term costs in a few different scenarios.
Best of luck to you in figuring it out. The carriers certainly don’t make it easy.
Verizon vs. AT&T vs. Sprint vs. T-Mobile
Here’s the breakdown by carrier without any early upgrade privileges. The first section shows monthly service pricing for a single phone with unlimited talk and text, with additional charges listed below. In all cases, we’ll assume everyone’s getting a 16 GB iPhone 5s or a comparably-priced phone once every two years:
|< 500 MB||$55 (250 MB)||$60 (300 MB)||N/A||N/A|
|2 GB||$90||$95||N/A||$60 (2.5 GB)|
|> 10 GB||$10 per 2 GB||Varies||N/A||N/A|
|Upfront Phone Cost||$200||$200||$200||$0|
|Monthly Phone Cost||$0||$0||$0||$27 for 24 months|
|Second Line||$40||$40||$60 to $70||$30 to $50|
|Third Line||$40||$40||$50 to $60||$10 to $30|
|More Lines||$40||$40||$40 to $50||$10 t0 $30|
|Mobile Hotspot?||Included||Included||$10 (1 GB)||Included|
A few observations based on the chart above:
- An individual, moderate data user would pay the least through T-Mobile. at $2,088 over two years, but Sprint’s unlimited plan isn’t much more expensive at $2,120 over two years.
- If you’re an individual who burns through bandwidth and needs mobile hotspot, Sprint’s price jumps to $2,360. T-Mobile ends up a little cheaper at $2,328 over two years.
- Individuals who can get by with just a little data will spend the least through Verizon ($1,520 over two years on a 250 MB plan) and AT&T ($1,640 on a 300 MB plan).
- T-Mobile doesn’t do shared data for families. Additional lines start with 500 MB, and increase in $10 increments for 2.5 GB and unlimited data. A family of four, each with 2.5 GB of data, would pay $5,952 over two years — much less than any other carrier.
- Sprint is also now pushing a “Framily” Plan where you pay $55 for the first line with 1 GB of data, and $5 less for each additional line. Each line can then upgrade to 3 GB for an extra $10 per month, or unlimited data for $20 per month. It’s not worth considering for a family of four if you’re looking to save the most money, as T-Mobile’s family plan is still cheaper.
Verizon Edge, AT&T Next and T-Mobile Jump Compared
Early upgrade plans are trickier, because they all work a little differently. With AT&T and Verizon, you pay off the full price of the phone in monthly installments, which is a lot more expensive in the long run than getting a $200 subsidized phone. But in exchange, they give you a discount on service, and you can trade up to a new phone once per year at no extra charge. With T-Mobile, you’re already paying monthly installments and getting cheaper service, but for $10 extra per month you can trade up to a new phone twice per year. You also get insurance for lost, damaged or stolen phones. (Sprint flirted with its own early upgrade program but killed it after four months.)
Perhaps we should let the chart speak for itself. This time we’ll assume you’re getting a new 16 GB iPhone or comparably-priced phone once per year:
|Verizon Edge||AT&T Next||T-Mobile Jump|
|< 500 MB||$45 (250 MB)||$45 (300 MB)||N/A|
|2 GB||$80||$80||$70 (2.5 GB)|
|> 10 GB||$10 per 2 GB||Varies||N/A|
|Upfront Phone Cost||$0||$0||$0|
|Monthly Phone Cost||$27 for 24 months||$32.50 for 20 months||$27 for 24 months|
|More Lines||$30 for plans under 10 GB
$20 for 10 GB or more
|$25 for plans under 10 GB
$15 for 10 GB or more
|$30 to $50 second line
$10 to $30 additional lines
- Oddly enough, a family of four using 10 GB per month would pay exactly the same amount on T-Mobile or Verizon, at $6,912 over two years. The Verizon family would pool its data together and could upgrade once per year at no charge, while the T-Mobile family would get 2.5 GB per person, and could upgrade once every six months. (AT&T is only a little more expensive, at $6,960 every two years.)
- Even crazier is that Verizon’s 10 GB and 4 GB Edge plans cost exactly the same — $6,912 over two years — if you have four phones. AT&T’s 10 GB plan costs less over two years than its 4 GB plan, at $6,960 compared to $7,200. It’s all because you get big monthly discounts on line access with 10 GB of data or more.
- Verizon Edge and AT&T Next aren’t great deals if you don’t use much data or don’t have other people on your plan. But they can be cheaper in the long run if you do. The only problem is that everyone’s locked in tight; leaving either carrier would require you to pay the full price of your phone.
Of course, pricing isn’t everything when picking a wireless carrier. The quality of service in your area and the availability of phones that you want can be just as important. But if you’re looking to make a switch and don’t know where to start, hopefully we’ve helped you do the math.