Fighting cell phone plan secret costs
News Room | Columns by CUB's Executive Director | Fighting cell phone plan secret costs
April 18, 2010—Every once in a while I read something that makes me want to toss my cell phone out the window. Earlier this year, major cell phone carriers sparked buzz about a wireless war when they slashed the price tags of their unlimited calling plans by $30 a month on up.
But CNNMoney.com later reported on a "dirty little secret": The cut coincided with an increase in the price of data plans. Even worse, one analyst saw a "big shift" toward requiring more cell-phone users to pay for an Internet plan - regardless of whether they actually wanted one.
Verizon said it was just trying to be helpful when it began forcing some customers to pay at least $120 a year for a data plan, even if they didn't tote a "smart phone" with all the bells and whistles. "Many customers didn't understand they could use the Web on their phones," a Verizon Wireless spokeswoman said.
Verizon's "helping hand," however, seems more like a tactic perfected in the landline industry and now flourishing in the wireless world: pushing customers onto more expensive plans than they need.
But you can fight these dirty secrets with your own secret weapon: good information. And the CUB Cellphone Saver is the first step in taking control of your calling costs.
CUB's free online tool, created in a partnership with Validas, can read and analyze an online copy of wireless bills to help consumers save hundreds of dollars a year. But it also has given CUB unprecedented access to data that shows just how the cell phone industry operates. It's uncovered plenty of dirty little secrets.
First of all, it seems that people are so afraid of going over their minutes and getting hit with "overage" fees of 30 cents per minute on up that they're easily herded onto plans with more talk time than they'll ever use. In fact, the 8,376 bills analyzed by the Cellphone Saver from January 2009 through early March 2010 racked up nearly 1.6 million rollover minutes - enough time to fill a call that lasts almost three years.
Those bills also were burdened with a total of $336,000 a year in charges for insurance, directory assistance, and roadside assistance - despite the fact that such services are often useless.
Bloated plans and useless services help balloon a carrier's "average revenue per user," or ARPU. The ARPU for Cellphone Saver users has been about $49 a month. That's a lot of cash to give your cell phone company. It's enough to make you want to exclaim "ARPU serious!"
But enough with the bad news. The good news is that having access to all this billing data - the kind of access that only cell phone executives used to have - gives consumers a valuable roadmap on how to cut their bills. In fact, the Cellphone Saver has shown thousands of consumers how to save an average of about $38 a month, or $456 a year!
So instead of tossing that cell phone out the window, take a good look at your next bill and see if you can chuck any unnecessary extras. You're the only one who can fight those dirty little secrets, and deflate your bloated bill.
But CNNMoney.com later reported on a "dirty little secret": The cut coincided with an increase in the price of data plans. Even worse, one analyst saw a "big shift" toward requiring more cell-phone users to pay for an Internet plan - regardless of whether they actually wanted one.
Verizon said it was just trying to be helpful when it began forcing some customers to pay at least $120 a year for a data plan, even if they didn't tote a "smart phone" with all the bells and whistles. "Many customers didn't understand they could use the Web on their phones," a Verizon Wireless spokeswoman said.
Verizon's "helping hand," however, seems more like a tactic perfected in the landline industry and now flourishing in the wireless world: pushing customers onto more expensive plans than they need.
But you can fight these dirty secrets with your own secret weapon: good information. And the CUB Cellphone Saver is the first step in taking control of your calling costs.
CUB's free online tool, created in a partnership with Validas, can read and analyze an online copy of wireless bills to help consumers save hundreds of dollars a year. But it also has given CUB unprecedented access to data that shows just how the cell phone industry operates. It's uncovered plenty of dirty little secrets.
First of all, it seems that people are so afraid of going over their minutes and getting hit with "overage" fees of 30 cents per minute on up that they're easily herded onto plans with more talk time than they'll ever use. In fact, the 8,376 bills analyzed by the Cellphone Saver from January 2009 through early March 2010 racked up nearly 1.6 million rollover minutes - enough time to fill a call that lasts almost three years.
Those bills also were burdened with a total of $336,000 a year in charges for insurance, directory assistance, and roadside assistance - despite the fact that such services are often useless.
Bloated plans and useless services help balloon a carrier's "average revenue per user," or ARPU. The ARPU for Cellphone Saver users has been about $49 a month. That's a lot of cash to give your cell phone company. It's enough to make you want to exclaim "ARPU serious!"
But enough with the bad news. The good news is that having access to all this billing data - the kind of access that only cell phone executives used to have - gives consumers a valuable roadmap on how to cut their bills. In fact, the Cellphone Saver has shown thousands of consumers how to save an average of about $38 a month, or $456 a year!
So instead of tossing that cell phone out the window, take a good look at your next bill and see if you can chuck any unnecessary extras. You're the only one who can fight those dirty little secrets, and deflate your bloated bill.