Cellular Price Wars Heat Up in 2017

PRICE WAR!   Attention shoppers:  cell phone plan prices continued to drop in 2017.   And this most recent price war seems to be driven by T-Mobile along with some new cellular technology.   Let’s first survey the landscape  and then  talk about when to time your next cellular purchase.   The price war was just what regulators hoped would happen when they blocked attempts by AT&T and later Sprint to buy T-Mobile.  Sure enough, it has happened.   The 2016 price drops have continued into 2017, so if you are looking for the best current plans, we recommend you check out our 2016 Cellphone Plan blog.  But if you want to better understand what led us to the 2017 pricing landscape, we invite you to read on.

The price war is being fueled by “uncarrier” T-Mobile’s aggressive pricing strategy that started in 2013 and is continuing unabated.   Thanks, in large part, to the Federal Government’s wise rejection of the AT&T/T-Mobile proposed merger,  T-Mobile is taking it to its former beau like a Taylor Swift song.   As part of its “Un-Carrier 4.0” initiative,  T-Mobile did away with ironclad wireless contracts and overages. It relaxed upgrade policies and made international roaming free. It added the iPhone to its product lineup, along with tablets.   In April, 2014, T-Mobile released a “Simple Starter” plan which caps a 500MB data plan (along with unlimited talk and text) at $40 per month.   This represented a rather significant price reduction – about 20% lower than T-Mobile’s lowest offer, but it has some restrictions that make a strict comparison difficult.   But now unlimited data is back and the prices are dropping.

It’s a far cry from seven years ago, when Verizon and AT&T scrapped their unlimited offerings and T-Mobile curtailed its promotional efforts around unlimited. To the carriers, your voracious appetite for streaming video and music was killing their networks, and the idea of letting you loose on your phone became a dirty concept. Sprint, which had been hemorrhaging customers at the time, was the only one willing to give you an all-you-can-eat plan.   But now unlimited is back…..to a point.  For you bandwidth hogs, keep in mind that there is no true wireless unlimited plan — they all have throttle levels.    But with the deployment of 4G networks, those throttle levels have risen.

Back in August 2016, T-Mobile unveiled its T-Mobile One plan.  Customers of its unlimited plan can choose whether to view online videos at reduced quality or at full HD resolution starting Feb. 17 for no extra charge (currently, HD capabilities cost an additional $15 per month per line). This offers greater flexibility, but for those who constantly stream at full HD, there are other risks to consider. Use too much data (more than 28 GB in a month) and T-Mobile may decide to slow down your connection. (FYI:  T-Mobile isn’t the only company that says it may throttle your consumption after a certain point. Verizon, T-Mobile and Sprint all have policies designed to curb extremely heavy data usage above 20 GB a month.)  T-Mobile starts prioritizing traffic after a line uses 28 GB and you are throttled to 3G for the rest of a billing period.  Subsequently, T-Mobile added HD video and hotspot.   T-Mobile One is $70 for one line, $50 for the second line (so $120 for two lines), and $20 for each line after that.  Because T-Mobile One will now include free HD video and 10GB of LTE tethering, free of charge, that makes T-Mobile cheaper than the other “big four”.

Also, as of May 2017, T-Mobile began offering a “too good to be true” deal on Samsung Galaxy S8.  According to BGR, the offer is for existing customers provided they add a new line, or for new customers on the T-Mobile One plan and its a two-for-one deal. When you go into the store buy a new S8, you’ll get another one for free. Of course, you’ll pay all the taxes for both devices, and then you’ll start paying for both devices on your monthly bill, for the next 24 months. The “free” part of your new Galaxy S8 comes in the form of a rebate MasterCard, loaded for the full value of the second Galaxy S8. Anyone who takes the offer will be paying for two lines and two phones for 24 months, and receive a MasterCard for the value of the second phone (around $750, depending on model).

Meanwhile, Sprint has also begun fighting back.   Its first counter-punch is Sprint rolled out a promotional $50 unlimited plan for singles, and $90 for a family of five (the rates go up after a year).  Sprint’s Unlimited Freedom plan might be appearling for  heavy, and even moderate, data users: unlimited talk, text, streaming video, gaming, and music at prices starting at $65 for the first line, $110 for two lines, and $35 for each one after that (up to 10 lines). The company has also dropped the access fees for this deal. Those prices are comparable to what the other carriers usually charge for 4 to 6GB of 4G data per phone.  But Sprint prioritizes traffic after 23 GB per month, and slows it way down to stomach-churning 2G speed after you’ve hit the throttle limit.  Also keep in mind that this is a promotional rate that might increase after a year.

Verizon has now jumped back into the unlimited fray, even after having sworn that it would not offer unlimited again. For a single line, you will pay $80 a month before taxes, to get “unlimited data,” plus unlimited phone calls and text messages. That includes a $65 fee for for the unlimited data, and then a $20 “line access” fee. Verizon will deduct $5 a month from your bill if you sign-up for AutoPay and Paperless billing, bringing you down to $80 a month before taxes. If you have more than one smartphone (a family plan), prices start at $110 for the unlimited data (you’ll get a $10 monthly discount for signing up for AutoPay and Paperless billing), and then $20 access fee per line. For two people, this will be $140 a month, or $70 per person for unlimited data. If you have four lines on the account, it ends up costing $45 per line for unlimited data. For users who want to use Verizon’s Mobile Hotspot (tethering). You can use up to 10GB on 4G LTE each month as part of the plan (this is separate from your 22GB), but once you go beyond that, you’ll be throttled to 3G speeds. If you’re a heavy Mobile Hotspot user, this could be a breaking point for the unlimited plan.

As for AT&T, well, it’s rates are among the highest out there unless you bundle your cell service with AT&T’s other offerings.   In February, AT&T announced a response to Verizon & T-Mobile’s unlimited plans, that it will offer what it creatively (not) called its “Unlimited Plan”.   Additional lines cost $40 each, with the fourth line free. Like the other carriers, the new plan has a soft cap on data — 22GB in AT&T’s case, the same as Verizon — after which customers are subject to their data being throttled when towers get congested.  Moveover, while the other carriers offer 10GB of tethering, AT&T has chosen not to include that…..despite the premium price it is asking. AT&T had previously offered an unlimited data plan that costs $100 per month for the first line, but it had only been available to existing DirecTV and U-verse customers — today’s announcement basically opens it up to everyone.  But it isn’t particularly competitive, so it is unlikely that consumers will flock to it.  As with so many of AT&T’s offerings, this one is must more meh.

AT&T has also created a plan with budget-minded customers who need only to surf the Web or for stream standard definition.  The second new plan, Unlimited Choice gives customers unlimited data for $60 a month (for a single line) or $155 a month for four lines. The catch: there’s a maximum speed of 3Mbps and you get lower-resolution video (480p).   So if speed and resolution aren’t important to you, you may be able to save $10 a month.

Is unlimited cell service really all that?   We don’t think so. In evaluating any cellular price plans, it is essential that you know your needs.   An unlimited data plan, while appealing, may be excessive in light of your data consumption.  If you stream lots of music or video over 3G or 4G LTE, then you may want to consider an unlimited plan. To figure out how much data you use in a month, follow these steps if you’re an Android user ( http://www.tomsguide.com/us/monitor-data-usage-android,news-21226.html ) and these instructions if you’re on iOS ( https://support.apple.com/en-us/HT201299 ). Spend a few weeks analyzing your habits, and some useful trends should emerge.   As of mid-2017, here’s what you’ll find:

AT&T Unlimited Choice. Best for: Individuals who want top-class reliability and coverage similar to Verizon’s but are willing to accept slightly lower speeds and lower prices than Verizon. Pricing: $60 for a single line with 22 GB of data, $115 for two, $135 for three, $155 for four.* (Each line gets its own 22 GB of fast data.) Drawbacks: “Unlimited Choice” offers 3G instead of 4G LTE speeds, no mobile hot spot and streams video in standard definition rather than crisper high definition. Instead you can opt for AT&T “Unlimited Plus,” which matches Verizon’s speeds and mobile hot spot data but costs $90 for a single line with 22 GB of data, $145 for two, $165 for three, $185 for four. (Again, each line gets its own 22 GB of fast data.) Special features: This is a good deal if you have DirectTV satellite service, which AT&T owns. With the Unlimited Plus plan, you get a $25/month discount off satellite service, a savings of $300 annually.

Sprint Unlimited Freedom. Best for: Individuals and families who want the lowest prices among the major carriers and are willing to put up with some spotty coverage and network quality. Pricing: $50 a month for one line with 23 GB of unthrottled data, $80 for two, $120 for four lines, each with its own 23 GB of data. Although these rates are good only until June 30, 2018, even the increased rates after that date beat or match current rates of the other major carriers for up to four lines. Attractive feature: You get 10 GB of mobile hot spot data per line that does not count toward your 23 GB unthrottled limit. Drawbacks: Current Sprint Unlimited Freedom pricing is available only to consumers who are not currently Sprint customers. In recent independent surveys, Sprint continues to have the lowest quality, reliability and coverage of the big four carriers. To check on coverage in your area, go to Sprint.com and search for Mobile ­Coverage Map.

T-Mobile One Unlimited. Best for: Extremely heavy data users, international travelers and frequent phone upgraders. Pricing: $70 for one line with 30 GB of ­unthrottled data, $100 for two lines, $140 for three, $160 for four. (Each line gets its own 30 GB of fast data.) These rates include all taxes and fees, unlike those of most other carriers, which advertise rates without taxes and fees but then add them to your bills. In fact, after Sprint’s prices increase in 2018, T-Mobile One Unlimited’s deal for four lines will be the cheapest of all the major carriers. T-Mobile also offers a feature called KickBack that pays you back for data you don’t use. If your total monthly data usage on any line is 2 GB or less, you are credited up to $10 toward your next bill. Special feature: 10 GB of mobile hot spot data that doesn’t count toward your 30-GB unthrottled-data limit. Drawback: The quality of the network outside metropolitan areas lags behind AT&T and Verizon but is still superior to Sprint.

Verizon Unlimited. Best for: Consumers willing to pay premium prices an extensive network coverage but with data limitations.  Pricing: In place of the $80 offering Verizon introduced earlier in the year, the carrier now leads off its unmetered-data choices with a $75 “Go Unlimited” deal ($130 for two lines, $150 for three and $160 for four) that demands significant compromises. Think of this as the equivalent of “Basic Economy” airfares that unbundle many traditional features of air travel.Go Unlimited caps the resolution of streaming video at 480p, the same quality as a DVD. On a tablet, you get 720p, the minimum resolution for high-definition TV. That’s well below the capabilities of screens on either type of device.  Bandwidth you share with nearby devices via WiFi—called mobile-hotspot use or tethering—is cut all the way back to 600 kbps, even worse than the typically wretched WiFi at tech trade shows like CES.  You can expect to ssee your speed “deprioritized” if your phone connects to a tower experiencing congestion, even if you haven’t used up any data yourself in the current billing cycle. A new $85/month “Beyond Unlimited” plan—$160 for two lines, $180 for three lines and $200 for four—ups the streaming-video resolution limit to 720p on phones and 1080p, or “full HD,” on tablets and offers 15 gigabytes of full-speed hotspot use a month. It also doesn’t risk de-prioritization until you’ve used up 22 GB of data in the current billing cycle, and it throws in free roaming in Canada and Mexico.

As to service quality,  three of the four carriers pretty much share the same network quality, with T-Mobile showing the most improvement.  According to a recent study by OpenSignal, Verizon and T-Mobile are virtually tied for fastest average download speeds, at just under 17 Mbps. Verizon has a slight edge in national coverage.  However, according to Consumer Reports,  Verizon ranked near the bottom of providers for customer satisfaction, just above AT&T and Sprint, the lowest-ranked provider. T-Mobile surpasses its biggest competitors in our survey, while going neck-and-neck with Verizon on measurements of speed, according to outside research.   But keep in mind that these same savvy consumers rated  Consumer Cellular, Ting, Jitterbug, Credo, Virgin Mobile and U.S. Cellular as offering even better values than the top-4.

 Consumer Reports continues to rank Ting and Consumer Cellular as the highest in cell carriers offering value and network quality.   And Republic Wireless is also making a splash by offering hybrid wifi/cell service at substantially discounted prices.   By automatically routing calls over your home Wi-Fi network, then handing off to the cellular network when you’re out of range of a hot spot, it has begun to attract wireless customers located in urban areas who have access to home wi-fi.   Like other MVNOs (also called Mobile Virtual Network Operators) such as Republic, Freedom Pop, Ting, Consumer Cellular and TracFone,  Google will be buying spectrum from T-Mobile and Sprint.  The catch:  Google’s Project Fi service is only available for Nexus 6 customers.  It offers a special SIM card which gives access to T-Mobile or Sprint networks as well as any nearby accessible wifi.   Prices will start at $20 a month for “the basics,” or voice service, texting, Wifi tethering and international coverage. After that it’s $10 per gigabyte of data you use in the U.S. and abroad and you do get to sell back what you don’t use.  That $30 comes with 10GBs of data and which includes unlimited domestic talk and text,unlimited international texts, low-cost international calls, Wi-Fi tethering and coverage in 120+ countries.   Combined with Google’s Nexus and Pixel line of smartphones that help make the price of high-end smartphones more affordable,  Google is putting substantial outside pressure on the wireless industry. Naturally, we went for this “best value”, since we already had a Nexus 6.  It’s worked quite well.  Other plans worth your consideration include:

FREE:   FREEDOM POP –  200 minutes, 500 texts, and 500MB of 4G data for $0 per month.  You can bring a Nexus 5 to Freedom Pop’s network, which runs on Sprint’s network.   Granted, it isn’t the best network, but it is getting better.   Their customer service is rather slow and it is only available in cities  with Sprint 4G service, but it is worth checking out.

LOW COST:  RING PLUS –  400 minutes, 400 texts, and 300MB of 3G/4G/LTE data  Their Bella plan is about $10 per month and their Surf & Turf plan is an affordable $20 per month that offers unlimited voice and messaging, with a 750MB cap on data, but is only available in certain cities.   It is one of the more attractive wireless offerings on the market and it is compatible with the Nexus 5.   It also relies upon Sprint’s network.

LOW COST:  CONSUMER CELLULAR  –  We were very impressed with the low-cost and very flexible programs that afford you data, messaging and voice.  Our monthly cost for all three — $25.   And, it uses the AT&T network so reception is very good.

SECOND-BEST UNLIMITED PLAN:  STRAIGHT TALK –  Unlimited Voice,  Text and  Data    Offers a prepaid, no contract $45 per month, unlimited package that uses AT&T’s network.  Probably the best unlimited offerings currently in the U.S. and works with the Nexus 5.   AT&T’s network has improved sufficiently over the last few years, that we can recommend it again through this reseller.  AT&T’s cost for a comparable plan is still too high to recommend.

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