May 20 2013

Cell Plans Comparison

This post originally appeared at Living on the Cheap.

Photo on 5-20-13 at 4.55 PM

Apparently, there is an unspeakable cruelty in the world of a teenager.

“Dad, everyone at school has an XYZ3000 smart phone. I can’t even look at Google Maps on this stupid flip phone and I probably won’t even get to go to prom because of it.”

Teenagers also have a propensity for hyperbole.

The challenge is the overwhelming cost of smartphones and plans for a family of four. My teenagers would rather have a phone than food. This constant connection can lead to overages in talk time, texting and data, and a huge bill even if you are inside of the bounds of the contract.

The flip side of the equation is that if it weren’t for texting, I might never communicate with my children. What is an aspiring helicopter parent with a budget to do?

The first step toward making a decision about this is putting a name on those dollars in your budget. This will help you determine whether it makes sense for your family to have a communications budget line item that might only be exceeded by your mortgage payment.

There are four major cellular carriers in the United States, along with a host of minor players that typically resell someone else’s service. Verizon and AT&T are the big first-tier companies with Sprint and T-Mobile a step below them in size and scale of coverage. Each of these companies owns its own networks, towers and infrastructure. To complicate matters, we have two technology bases in the United States for cellular communication. Verizon and Sprint use CDMA and AT&T and T-Mobile use the more global friendly GSM.

The easiest way to tell the difference between the two technologies is that generally GSM phones have SIM cards and CDMA phones do not. The iPhone 4S and iPhone 5 actually have both technologies built into them. If a phone is “unlocked,” you can generally move it to another carrier of the same type.

Figuring out how much data you need is a little slippery, but I did all of the calculations for this article based on 2.5 gigabytes of data a month per phone for a family of four. To put it in perspective, that is about eight hours of watching YouTube, 32 hours of listening to Spotify, 10,000 text emails or 400 high-quality JPEG pictures. Using Google Maps for directions can chew through a bunch of bandwidth quickly.

So, let’s start with the big two.



The “Can you hear me now?” network has the largest coverage and the most subscribers, with more than 100 million in the United States. It has a broad range of phones and devices and you can get a smartphone for free. The LG Lucid 2 is a solid smartphone with a big screen and 4g wireless for fast mobile data access. However, you do pay for this level of coverage. Verizon came in at the very top of the expense scale at $260 a month for four phones with unlimited calls and text messaging and 10 gigabytes of shared data. Shared data is a mixed blessing. If someone goes over their data allowance, they’re using time meant for another family member. If you go over 10 gigabytes, you’ll pay an extra $15 for each and every gigabyte that exceeds your purchased plan.

Also, be aware that Verizon charges a new line activation fee of $35 per phone as a one-time charge.  This amount is not figured into my calculations. If you already have service with Verizon, this will only be charged on the lines you add. You are typically signing up for a two-year contract if you get a new phone or change your plan.


AT&T is nearly as big as Verizon and also has more than 100 million subscribers. The “It’s not complicated” network gives you the ability to browse and talk at the same time, which is only useful if you are using a hands-free device.

It is no big surprise that the pros and cons with AT&T are almost identical to Verizon’s. Great phone choices, good coverage, but you know that free phone is getting paid for somehow. A family of four can get free phones like the refurbished Samsung Galaxy Exhilarate, which has a big screen, fast wireless and a modern version of Android software.

Again, you are looking at a shared pool of data among the four phones. This plan comes in at $240 a month, a full $20 less than the comparable Verizon plan. You will be assessed a $36 dollar per line activation fee and a two-year contract.



Sprint is a distant third with around 56 million subscribers. Its coverage is not quite as good as the big two, but it has one big poker chip that has pushed it to the middle of the table. The “Now Network” has truly unlimited data.

That’s right. Junior can spend all month downloading videos off illegal pirate sites and your cellphone bill won’t change at all. What Sprint does limit is voice minutes. You can choose to get four lines of unlimited everything, but this pushes up the monthly charge to a little over $400 a month. Eek! If you feel like 1,500 minutes a month of talk time is sufficient, you can find a plan for about $210 a month.

I chose the 3,000 minutes a month plan for about $250 because it also gives you free unlimited minutes to any cellphone number.  This may be practically unlimited talk time given the move we are seeing in America to less and less land-line service. With unlimited data, you even could use an app like Talkatone that uses your web connection to talk over the Internet. The quality on this could be limited by the speed of the network your phone is using.

Sprint has good coverage and can roam over to Verizon’s network if necessary, but doesn’t have quite the high-speed network or breadth of service that AT&T and Verizon do. It does, however, give you access to some pretty cool phones on its network like the LG Optimus G for free.

Like the big two, you will be looking at a two-year contract and a line activation fee of $36 per line.


T-Mobile is the last of the major cellular companies, with more than 30 million subscribers. After the failed merger with AT&T, it has been trying to find its way. Being at the back of the pack makes you a little more aggressive. T-Mobile just rolled out a new business format and is differentiating itself from the rest of the major carriers by getting rid of contracts. Come and go as you like and T-Mobile will smile at you like a good hostess. You won’t get a free phone anymore but T-Mobile will allow you to make payments on a phone for up to 24 months so you can afford the newest and coolest one.

Second, the company has no activation fees. This will save you more than $100 when signing up a family of four.

Third, even its second-tier data plan is unlimited. Sort of.

For $140 a month you can get a family plan with unlimited text and talk plus full-speed, unlimited data on each phone — until you cross the 2.5 gigabyte mark. After that the data on your phone will get much slower, but it will continue to flow with no additional charges. This slowdown will only happen to the individual phone that goes over 2.5 gig, so the other three phones will still be at full speed unless they cross that barrier. For a bit of an up charge, you can get truly unlimited, unthrottled data.

Prepaid and Secondary Providers

All of these companies are MVNOs (mobile virtual network operators) that lease their time on cellular towers from someone else. Sometimes it is one of the majors, generally Sprint or T-Mobile, or another company that wholesales these services to them.

Sometimes they act just like a big company, but generally they do not have contracts or all the fees and red tape that are usually attached to the big guys. They may have smaller phone selections, but they still offer some very cool devices. They do not typically underwrite the costs of these devices like the bigger operators do, so phones are more expensive but the total cost is generally less.

In most cases, taxes and fees are rolled into the flat rates with these carriers, so you will not see additional charges on top of these quoted prices.

WalMart Straight Talk

There are more than 50 phones to choose from on WalMart’s service ranging from iPhones to off-brand oddities like the Huawei Ascent II.

The deal is pretty silly. $45 buys you unlimited everything for 30 days — all the talking, texting and downloading you can do in that time period. For truly unlimited use, $180 for a family of four across 30 days is fairly reasonable. After 30 days, you buy a top-up and are good for another 30 days. If you do a bit of math, you will realize that 12 of these 30-day cards does not quite get you through a year of consecutive service. Over a six-year period you would have to buy 73 30-day plans to get unbroken coverage.

Given the price of the service and the fact that it does not throttle your downloads, this is a really great deal, especially if you buy the 90-day coverage card, which pulls your monthly cost down to $42 a month. If you bring an unlocked GSM smartphone, you can use its plan with one of its sim cards and can recharge your phone with time and data by purchasing a card at WalMart or online. You can even set it up to auto-recharge so you don’t have to think about it.


MetroPCS has just been acquired by T-Mobile, so it will be interesting to see if it changes its pricing model to fall into line with the parent company or continue as it is.

MetroPCS has a good selection of phones at a bit of a discount with no activation fee. A smartphone family plan from them will run $45 a month — $180 for a family of four. But it has the same unlimited structure as T-Mobile on data, where it slows down your data speed after 2.5 gigabytes a month on each phone.

Boost Mobile

Another MVNO with a decent selection of phones and no contracts, Boost Mobile has one really interesting twist to reward its longtime users. They call it shrinking payments.

An Android smartphone on its system will cost you $55 a month ($220 for a family of four) for unlimited everything with the typical slowdown of data speeds after 2.5 gigabtyes of data usage in a month. The twist is that after six months of online payments, it will lower your bill by $5.

After another six months, the company will lower your bill again. It will even do it one more time, to a maximum discount of $15, after 18 months of on-time payments. This would bring your monthly payment as a loyal customer down to $40 a month ($160 for four phones) for unlimited coverage. Nice deal if you can wait that long, or if you are already on Boost.

Virgin Mobile

You are starting to get the feel for the pricing plans at this point, aren’t you? Virgin offers a decent array of phones with no contract and no activation fees. Unlimited everything is available for $55 a month ($220 for four phones), but it will start limiting your data speeds after 2.5 gig of usage. If you are willing to take fewer voice minutes you could get that plan for $45 a month for 1,200 voice minutes or even $35 a month if you feel like playing some data games and limiting yourself to 300 minutes a month. I don’t think I can recommend those options in good conscience.

Virgin is reselling Sprint’s coverage, and in an apparent attempt to attack the competition, it will also give you a $100 credit if you are switching to their service from T-Mobile.


Cricket was among the first prepaid carriers in the U.S. market. It offers nine different smartphones with a bit of a discount, but no contract is required. It does charge a $15 activation fee per phone.

It offers a $50 a month plan for one gigabyte of data, but I would recommend its $60 plan for two gigabytes. Both of these plans are unlimited, but do throttle down to lower speeds after exceeding those amounts. Your family of four would be paying $240, the same as AT&T but with two fewer gigabytes of data.


I have included my full chart here with all of the costs and the way they break down, but there are really two clear winners in this fight.

No one is more surprised than me to crown T-Mobile the winner by a nose in this contest. $140 a month gets you 2.5 gigabytes of data and unlimited voice and texting per phone for four separate smartphones. If you don’t like the idea of having your data slowed down at a certain point then an extra $10 per phone gets you completely unlimited data for a very reasonable $180 a month for that family of four . T-Mobile will sell you a smartphone on payments, but it does not have any deeply discounted options.

If truly unlimited data is your hot-button, then the winner is actually the WalMart Straight Talk plan. As long as you pay for coverage in 90-day blocks, you are actually getting unlimited everything for a very reasonable $42 a month ($168 for four phones). It gives you the choice to spend as much or as little on a smart phone as you want to suit your usage patterns.

Read your cellphone bill closely and try to decide if you really need a contract. If your time with one of the big companies is at an end, it may be time to take your number to a brand new company.

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