If you haven't checked your cellphone bill in a while, perhaps you should. The four major cellphone providers have stepped up their competition with each other in recent weeks. When that happens it's almost always good for consumers.
When cellphones started becoming an ever-present part of modern life, the cellphone companies were in the driver's seat, able to dictate terms. From the beginning consumers were required to commit to two-year contracts, ostensibly to compensate the carrier for the subsidized portion of the mobile phone they provided.
In other words, a consumer might only pay $50 for a phone, while the real cost, paid by the provider, was much higher. Cancelling before the contract was up triggered expensive early termination fees.
Now there are more cellphones in the U.S. than people and the cellular providers can only grow by taking customers away from their competitors. It's the stuff of a good old-fashioned price war, especially with no-contract providers entering the fray and offering enticing deals.
T-Mobile has been among the most aggressive in responding to the challenge. The company has adopted a no-contract policy, allowing the customer to purchase a phone at full price up-front, or finance it over time. It recently offered a deal allowing customers to get a new Apple, Samsung or LG phone with $0 down and pay an extra $26 a month on their bill to cover the $626 cost of the device.
Still under contract to another provider? In a bold move T-Mobile is currently offering to pay your early termination fee if you sign up with them. Plans start at $50 a month and include talk, text and unlimited data, though 4G speed may drop after users exceed a certain threshold, set by their plan.
To lure customers away from other carriers T-Mobile will pay up to $650 per line when you switch – up to a $300 trade-in credit based on market value for each device and up to $350 per line, based on the early termination fee on your final bill.
Sprint is stepping up its game with what it calls its “Framily” plan. Up to 10 people, related or not, can share a Sprint account to take advantage of group pricing. Plans start as low as $25 per month per line with unlimited talk and text with 1 GB of data per line while on the Sprint network.
“We recognize that often friends are considered to be as important as family,” said Jeff Hallock, chief marketing officer for Sprint, when the company rolled out the promotion in January.
Accounts can be billed separately and there are no annual contracts and no early termination fees. When you sign up at a Sprint store for the Framily Plan, Sprint will throw in a free Samsung Galaxy Tab 3.
AT&T and Verizon
AT&T and Verizon Wireless have also been forced to make some concessions to consumers. Both carriers have recently begun offering no-contract plans. Both are also pushing their group plans, which lowers the per-line cost.
AT&T is currently promoting two lines for $130, working out to $65 a line. But three lines is $145, dropping it to less than $49 a line. Four lines for $160 is cheaper still.
AT&T's Mobile Share Value plans allow you to share data on up to 10 devices with no annual service contract. You can also avoid the annual contract with the AT&T Next plan, if you purchase your smartphone at full price, are out of contract or bring your own device.
Verizon has countered with its More Everything Plan, which starts at $45 a month for access but only becomes a competitive deal when you start adding lines to share a pool of data.
The plan includes 25 GB of cloud storage and the company recently doubled the data for customers on its 500 MB and 1GB and raised its 2 GB customers to 3 GB at no extra charge. Verizon, like AT&T, offers customers the option of a month-to-month agreement.
A recent promotion to lure customers from its competitors offered four free Samsung S4 smartphones and a $200 credit on your bill when you added a line or switched from another carrier.
Adding to the competitive pressure on the major carriers are the small upstarts, who own no networks but simply lease space from their competitors and resell pre-paid service. Among them is Straight Talk, which offers plans through Walmart for as short as 30 days, with unlimited voice, text and data.
The company says you can activate your own phone, as long as it's a compatible LTE model. You can buy a new Samsung smartphone starting at around $40.
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