A certain TV commercial rather humorously depicts someone walking with trepidation to the nearest mailbox, ostensibly in fear of that month’s cell phone bill. Why they should fear this fateful close encounter is simple: They are in stark fear of exceeding their monthly bucket of minutes, and thus face hideous overage charges.
Indeed, when each extra minute can cost you 40 or 50 cents each, this can rapidly add up, and it means one huge profit margin for the wireless companies. At the same time, competition will often force a company to do previously unexpected things in order to compete.
So here we have AT&T riding high, partly because of the rise of the iPhone. Their share of the market compared to Verizon Wireless, number two these days, has continued to improve. So what did Verizon do? Well, they could have knocked down their prices somewhat, but AT&T also has rollover minutes, where, if unused, they carry over to the following month. The extra minutes last for up to a year, but it can ultimately mean you don’t have to buy a more expensive plan in case you might exceed the allotment one month. Unless you play it close to the vest, you’ll usually end up ahead.
What this means, of course, is that AT&T can still offer better deal, even if it were more costly than Verizon. So Verizon’s solution was to do something that’s so perfectly logical you wonder why it was never previously attempted, and that’s add a flat rate plan for $99.99. That means that, regardless of how many phone calls you make, it’s the same price, and the plan includes both domestic long distance and roaming.
AT&T’s response, which reportedly goes into effect on February 22, will evidently match the plan, and even iPhones are supported.
Understand that these new rate plans are strictly for the phone calls. Data, messaging, extra lines and other frills are extra, just as they are now.
Personally, I think it’s going to be a huge success, and that lots of people who buy lesser plans will upgrade simply out of fear that they will somehow accidentally exceed the limits some day. Sure, there will be people who will live day and night on their cell phones, in the same fashion as some of you will gorge yourself at the buffet dinner, but they will remain in the minority.
However, assuming AT&T follows Verizon’s structure all the way through, these plans have one huge negative that may seriously impair their value for most families. The minutes cannot be shared. What this means, based on Verizon’s price list, is that the same flat rate applies to each individual line. That’s right, although this obvious shortcoming hasn’t be given a whole lot of publicity. So if you have two phones in your family, the price doubles. Go ahead and factor in the increases for more lines from there.
That could be one huge show-stopper, unless each family member is already ringing up big minute allotments. I have three phones on my AT&T account, including the iPhone. Obviously I am not going to be interested in paying close to $300 for three lines, plus the added costs for data, unlimited messaging, taxes and all the rest of the stuff they pack onto a cell phone bill these days. For me, that would take my monthly bill within touching distance of $400.
On the other hand, I can see the benefits of this plan for many of you, and maybe the wireless carriers will consider an affordable shared minutes alternative soon.
But having broached a more realistic rate plan, the carriers still have lots of work to do in other areas. Despite reportedly spending billions and billions of dollars to upgrade their networks, call quality can still be pathetic in many situations. Sometimes the caller sounds as if they are slogging through water, wearing diving gear. At inopportune times, you’re disconnected.
Sure I know that AT&T promises fewer dropped calls, and Verizon Wireless exhorts us to believe they have the best wireless phone network on the planet. But they still do not approach the consistent call quality of the traditional landline phone system in the days of the original Ma Bell.
So while the prices may become more sensible, at least in certain situations, can you depend on your wireless service to provide great call quality with 99.99% uptime? Not by a long shot. Alas, that huge investment appears to be earmarked strictly for faster broadband and multimedia features, not superior call quality.
Or does anyone even care?
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