Shared Data is No Bargain

Rumors are buzzing about a new iPhone announcement next month. I’m especially looking forward to this launch because not only did I skip the iPhone 4S last year, I’m also out of contract with AT&T and this is my first opportunity to make the switch to Verizon without having to pay excessive fees. Unfortunately, after taking a look at the new pricing plans offered by the carriers and talking with my family about their plans, I’m even more lost and confused.

First, a quick recap. Anyone who has followed me for years knows about my constant frustrations with AT&T’s service in my area. I switched from Verizon to AT&T when I purchased the original iPhone because until recently, AT&T was the exclusive carrier in the U.S. By the time the iPhone 4 came out on Verizon I was locked into a two year AT&T contract that just expired last month. While I love my iPhone, I’ve struggled with AT&T’s lackluster service from day one. Coverage is unreliable at my home (both old and new), my parent’s home, my office and a dozen other places around town. I’ve picked up several MicroCells and while they help, they come with their own sets of problems and won’t cover a large home or office. I couldn’t wait until the end of my contract and the release of the new iPhone for the opportunity to switch back to Verizon.

Last month, things changed. Verizon announced their “share everything” data plans and they are now mandatory when signing up for new service or for existing customers seeking a subsidy on a phone. While I understand there are probably certain groups of people these plans make sense for, in my situation switching to Verizon suddenly became more expensive both for my individual plan and for my family.  It should be noted that AT&T has released similar shared plans, but at this time, the AT&T shared plans are not mandatory. This post is a look at how the plans impact me and my family.

For purposes of comparison I have not included taxes, which should be fairly uniform across carriers, and rounded prices up to the nearest whole dollar. I also have not factored into the equation a 15% discount my family receives on our bill due to a business affiliation. While it impacts our bottom line, I wanted to give you an idea of how these numbers impact a typical family.

Katie’s Individual Plan:

I’m grandfathered into AT&T’s unlimited data plan. I use very few voice minutes a month and have a stockpile of rollover minutes for the odd month when I do go over. I very rarely text, so I’ve added a $5.00 text bundle which also no longer exists but gives me 200 messages a month for the few people in my life who insist I text. I have a 4G iPad on Verizon with a pay as you go option and I only use it a few times a year, so that will probably be cheaper in the long run to stay pay as you go.

Current AT&T Plan: 450 minutes - $35 Unlimited Data - $30 200 Texts - $5 Total: $70.00

Under the new Verizon Share Everything plan I get unlimited text and talk (which mean very little to me) and then add on based on the amount of data I want to share and the type of deice I have. So assuming I go with the 1GB data plan (lowest option) my price to enter starts at $50 monthly access plus $40 for each Smartphone and $10 for each tablet.

New Verizon Plan: Text, Talk and 1GB Data - $50 Smartphone - $40 Total:  $90

For an additional $20 a month I lose my "unlimited" data but I do gain a better voice and data network in my area. I also gain the ability to use my phone as a wireless hotspot which would come in handy occasionally, but also cause me to burn through my data a lot faster than normal and may either require me to bump up to the 2GB plan or subject me to overages.  While $20 a month may not seem significant, that's $240 a year or $480 over the life of the two year contract. Perhaps $20 a month is justifiable in my case for moving to a superior network, but as you'll see the math quickly gets worse when you add in a large family.

Family Plans

My family has a separate family plan with AT&T they would also like to move to Verizon due to the AT&T coverage issues and to keep everyone on the same netwok. My mom, dad, brother, grandmother and grandfather are all on the plan. Mom, dad and brother all have iPhones while grandma and grandpa have basic phones. Currently the three iPhones are on  200MB data plans and the family shares unlimited texting and 700 voice minutes. My grandparents phones are used minimally. My grandpa’s phone is seldom used and primarily for emergencies. Grandma uses her phone sporadically during the day but uses it extensively after 9pm for the free long distance to talk to out of state relatives. Check out the image below for a breakdown of their bill under the various options.

[caption id="" align="center" width="512"]Comparison of Share Plans Comparison of how the plans impact my family (click for full image)[/caption]

On the Verizon plans, my family would $45.00 a month more than they are under their current AT&T plan which equates to $540 over the course of the year or $1080 over the life of the contract. Of course the AT&T Mobile Share plan is even worse and is $50 a month more. Interestingly, the bulk of the additional cost is coming from the grandparent’s phones, which are the two least used phones on the plan. Dumping the grandparents would actually mean that my mom, dad and brother would see an overall monthly cost savings. But then my grandparents would separately have to figure out what to do about their phone service by either getting some kind of pre-pay service and/or a better long distance plan for home use. While this might make sense, when you factor in those additional costs you're still likely looking at a net cost increase for the entire family.

This is unique timing because this is the first opportunity for early and regular iPhone adopters to come off contract and have the ability to switch to a new carrier. I can't imagine I'm the only one in this situation who would have liked to make a move from AT&T to Verizon but couldn't due to contract restrictions. This makes me question the overall timing of the new pricing plan. Was it intentional to make sure that people like me would have to jump to a new and more expensive Verizon plan, or poor planning because fewer people will make the switch?

Unlimited talk and text that both the new AT&T and Verizon plans bring may be good deals for big talkers, but not so much for data users or households with multiple smartphones, which is increasingly becoming the norm. I understand the carrier's argument that increased use of their network by so many smartphones and data hungry devices brings increased cost. But what really upsets me about this move is that at least for Verizon, the new Share Everything plans are becoming mandatory for new subscribers or any current subscriber seeking a subsidy on their next phone purchase. These plans really don't make sense for most individual users, especially fairly light voice and text users. I don't think there's any solution here, that's why I've labeled this post as a "rant." It's not surprising the wireless companies are moving to these shared data plans and pricing structures. Carriers are promoting these plans as a "better value" for the customer, but at least in the examples I've identified within my own family, they're anything but.