There?s a good reason many people don?t bother to closely read their cell-phone bills. They?re a mess.
Even if you have a so-called bucket plan that?s meant to simplify things ? 450 minutes for $40, say ? the bill is probably split into categories of minutes (in plan, out of plan, promotional, roaming), data charges, taxes, E911 fees and other cryptic line items. If you have a family plan, forget it.
Now a consumer advocacy group is arguing that, actually, there?s not enough information on a wireless bill. And it has a point.
The group, the Utility Consumers? Action Network, based in San Diego, released a report this month in which it analyzed the phone bills of 134 consumers and suggested that they paid far more for each call than they realized. That?s because wireless carriers, unlike most other companies that sell things to consumers, don?t offer a unit-based price on the bill, indicating how much each minute of cell phone use costs.
This didn?t really matter in past years, because no matter what you paid, you didn?t have much choice. Wireless carriers generally charged the same prices for their calling plans, and relatively few consumers wanted to do business with the prepaid calling services like TracFone, Boost Mobile, Virgin Mobile and even the prepaid services from Verizon, AT&T and T-Mobile.
Now it matters. The prepaid companies are selling slick phones for reasonable prices, and you can make calls for as little as 5 cents a minute on some of the services if you pay for $50 worth of calls in advance. Is that more than you pay now for monthly service? We?ll stand by for a few minutes while you take the full bill amount, dig through the various categories of calls to determine how long you actually spent on the phone, and double-check your math.
Of course, with consumers in full penny-pinching mode, it would help to have a line on that fat monthly bill, saying exactly how much, per minute, it cost to use the phone last month. At least that?s the argument of the Utility Consumers? Action Network, or UCAN.
The wireless industry?s take? Don?t hold your breath.
“There are a lot of things we can do better, for sure,” said John Walls, a spokesman for CTIA, the wireless industry?s trade association. “But I really think this is not one of them.”
“It?d be extremely costly to put in the administrative procedures to break it down to that degree,” Walls said. “And most customers would find the necessary increase in price to be objectionable.”
And because many customers now incur data charges on their monthly phone bills, Walls said it would be “virtually impossible” to separate a customer?s voice and data charges in a bucket billing plan, and account for those charges on a per-minute basis.
But let?s just imagine for a moment that the companies that create some of the most sophisticated consumer technologies in the world could figure out a way to separate data and voice charges on a phone bill.
What would they find?
The Federal Communications Commission, in issuing its annual report on the industry in January, totaled the voice charges paid by subscribers in 2007, and divided that by the number of minutes for which customers were billed. Mobile subscribers, it said, paid about 6 cents a minute for their calls. But this is an imperfect measure because it does not include additional roaming charges paid by subscribers, nor does it include taxes and other fees charged on those calls.
There?s a good reason many people don?t bother to closely read their cell-phone bills. They?re a mess.
Even if you have a so-called bucket plan that?s meant to simplify things ? 450 minutes for $40, say ? the bill is probably split into categories of minutes (in plan, out of plan, promotional, roaming), data charges, taxes, E911 fees and other cryptic line items. If you have a family plan, forget it.
Now a consumer advocacy group is arguing that, actually, there?s not enough information on a wireless bill. And it has a point.
The group, the Utility Consumers? Action Network, based in San Diego, released a report this month in which it analyzed the phone bills of 134 consumers and suggested that they paid far more for each call than they realized. That?s because wireless carriers, unlike most other companies that sell things to consumers, don?t offer a unit-based price on the bill, indicating how much each minute of cell phone use costs.
This didn?t really matter in past years, because no matter what you paid, you didn?t have much choice. Wireless carriers generally charged the same prices for their calling plans, and relatively few consumers wanted to do business with the prepaid calling services like TracFone, Boost Mobile, Virgin Mobile and even the prepaid services from Verizon, AT&T and T-Mobile.
Now it matters. The prepaid companies are selling slick phones for reasonable prices, and you can make calls for as little as 5 cents a minute on some of the services if you pay for $50 worth of calls in advance. Is that more than you pay now for monthly service? We?ll stand by for a few minutes while you take the full bill amount, dig through the various categories of calls to determine how long you actually spent on the phone, and double-check your math.
Of course, with consumers in full penny-pinching mode, it would help to have a line on that fat monthly bill, saying exactly how much, per minute, it cost to use the phone last month. At least that?s the argument of the Utility Consumers? Action Network, or UCAN.
The wireless industry?s take? Don?t hold your breath.
“There are a lot of things we can do better, for sure,” said John Walls, a spokesman for CTIA, the wireless industry?s trade association. “But I really think this is not one of them.”
“It?d be extremely costly to put in the administrative procedures to break it down to that degree,” Walls said. “And most customers would find the necessary increase in price to be objectionable.”
And because many customers now incur data charges on their monthly phone bills, Walls said it would be “virtually impossible” to separate a customer?s voice and data charges in a bucket billing plan, and account for those charges on a per-minute basis.
But let?s just imagine for a moment that the companies that create some of the most sophisticated consumer technologies in the world could figure out a way to separate data and voice charges on a phone bill.
What would they find?
The Federal Communications Commission, in issuing its annual report on the industry in January, totaled the voice charges paid by subscribers in 2007, and divided that by the number of minutes for which customers were billed. Mobile subscribers, it said, paid about 6 cents a minute for their calls. But this is an imperfect measure because it does not include additional roaming charges paid by subscribers, nor does it include taxes and other fees charged on those calls.
UCAN used a more subscriber-specific approach. It calculated the per-minute phone charges of each customer in the survey, then averaged those figures to determine the rate paid by the typical user. That approach yields an inflated figure that sounds nothing like the average per-minute charge paid by anyone ($3.02, to be exact).
But if you split UCAN?s data a little differently, it looks more realistic. Fifty-one percent of customers in the survey paid 25 cents a minute or less, and 49 percent paid 26 cents a minute or more.
In other words, many people in the survey paid more for each minute of cell-phone service than if they had used a pay-as-you-go service like TracFone, Sprint?s Boost Mobile division, Virgin Mobile or even the prepaid plans from Verizon Wireless, AT&T and T-Mobile. Those services charge from 5 cents a minute (if you buy, say, $50 worth of phone time from Virgin Mobile) to 25 cents a minute (if you choose AT&T?s Pay As You Go service).
Customers must buy their phones, but a UTStarcom Arc cameraphone from Virgin Mobile costs $50, while a more upscale device on Boost, the Motorola i776 cameraphone with GPS, costs $100.
So if you were on a calling plan where you paid an average of 26 cents a minute, and you switched to a prepaid plan charging 10 cents a minute, that new Motorola would have paid for itself after about 560 minutes of calls and 100 text messages on Boost (at 10 cents each). Recouping the cost of the Arc on Virgin Mobile would take about 167 minutes of calls at 5 cents a minute, and 100 text messages at the company?s rate of 15 cents each.
There is little data available to the public on how many users waste a chunk of their allotted minutes every month, thereby driving up their actual per-minute charges. One online service, FixMyCellBill.com, has analyzed more than 11,000 cell-phone bills and contends that 80 percent of subscribers are using the wrong cell-phone plan. But that is a skewed sample, because the people who submit their bills are more likely to suspect they overpay.
For $5, FixMyCellBill.com will suggest a plan for your use patterns, and include tips on, say, free cellular 411 service if it finds that you overpay for that.
But the fact that there are companies whose sole mission is to help consumers figure out their cell-phone bills is a decent indication that the industry could be doing a better job on this front.
QUICK CALLS:
J.D. Power released a new study last week on call quality among the major wireless carriers. In most regions, including the Northeast and Middle Atlantic states, Verizon Wireless customers again reported the fewest problems. But the gap between the highest-ranked and lowest-ranked carriers has dropped to five problems per 100 calls this year from eight last year. … One of the iPhone?s newest apps is an exquisite time waster for Deadheads. “Grateful” features a photo-mosaic of the Grateful Dead?s deceased leader, Jerry Garcia, built from almost 450 band photos (that can be zoomed and e-mailed to friends). The app ($6) includes a band history, facts, quotations and a comment section for fans. … The wireless industry?s big annual conference is next week, so sit tight if you?re ready to buy a new phone and want the next big thing. Otherwise, Verizon?s sharp new midlevel phone, the Nokia 7205 Intrigue ($130 after a mail-in rebate, and with a two-year contract) made its debut this week. A see-through lid lets users read texts, see incoming calls and control their music player without opening the phone.
Copyright 2009 New York Times Syndicate
