Pay-Per-Use Versus Bundles: Really A Predictable Cost?
I was thinking more about the difference between buying a bundle of minutes–at a fixed monthly cost–versus paying for minutes as you go. I’m trying to figure out why such a thing caught on here in North America, but doesn’t seem to have caught on so much elsewhere.
The only thing I can think of–speaking from my own experience–is that it brings a certain predictability to the monthly cost. I know that my service is going to cost $X a month. It’s much easier to plan my budget when I know how much something is going to cost per month.
If you never go over your allotment of minutes, and never even get close to that limit, consider this: you’re likely paying for minutes you never use. Even if you take into account the “free” night and weekend minutes or mobile to mobile minutes, the overall number of minutes may, in fact, be lower than the bucket you purchased. For my wife, this was most certainly the case. Before we went prepaid, she was on a 300 minute plan and almost never used that many minutes in a month. The one month she did, overage city!
Anyone who has ever gone over their allotment of minutes knows that those overage minutes add up pretty fast. Many years ago, I was on one of AT&T Wireless’ first nationwide no-roaming/long distance plans. They allowed you to change the minute bucket you were on and would backdate it into the current billing cycle–which was very cool and something they no longer do. I had called in to place myself on the largest bucket of minutes possible. Even doing that, I had gone over my minute allotment by several hundred minutes and thus my phone bill was about double thanks to overage charges.
The question is: why are those extra minutes so much more costly than the minutes I got discounted in a bundle? How come if I go over a 450 minute allotment extra minutes cost $0.45? Do they really cost that much to provide an extra few minutes of service?
I will admit that there are some people who likely do quite well under the current regime of minute bundles along with free night/weekend minutes and free mobile-to-mobile. All of those people who are essentially overpaying for service are subsiding those who are making these “free” calls. Does that seem right to you?
The only reasonable approach here to pay for exactly what you use–no more. I know that when I buy my $100 voucher for T-Mobile Pay As You Go, I will get 1000 anytime minutes that are good for a year. If I spend $40 a month on a post paid plan, I get 450 minutes per month. Do I get to keep them if I don’t use them? No. Even AT&T’s “rollover” gimmick doesn’t let you keep all your unused minutes, though it’s much better than the other carriers.
Whether you are a heavy user or not, it pays to shop around. Prepaid plans may be cheaper than you think. It’s the closest thing we’ve got to “pay per use” pricing here in the U.S. The carriers have these plans, but they are for large businesses only. Why is that? Because businesses–particularly multinational ones–know a better way and have demanded it. Why can’t regular consumers do the same thing? Oh yeah, they simply don’t know better.
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Tags: mobile network operators, pay per use, prepaid, ripoff Fnord
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Pay Per Use Or Minute Bundles?…
When you're buying mobile phone service, there is generally two ways to go: (pre) pay for precisely what you (are going to) use, or buy a bundle of minutes per month, possibly on a contract basis-typically 2 years in the……
Comment by spg
it may be a minor factor; but a factor none the less. all phones in most countries are GSM and until a few years ago were all unlocked(except in NA). prepaid cards in many countries are typically used with used (but cool high end) unlocked phones.
i also think that the very fact that there are per minute contract plans in other places that can be compared side by side with the prepaid that pre paid is so much more popular in places like europe. they do not have the mis perception that is so common in the USA that prepaid will cost them a fortune.
i can not tell you how many times i have been told by an american that they barely use there phone and they are looking for something less than the usual $39.99+taxes and fees. i mention pre paid; they react ‘i use my phone than that – it will cost me a fortune’ than we look at the phone bill and they realise they would pay less on prepaid. but you know what they a week later i see them with a new post paid phone. they had let the salesman at the store talk them into the ‘free’ phone with all the features they are never going to use.
i do think the popularity of brand name stores with corporate trained sales persons is also a big factor in how things have worked out over here. when you go to any city in Europe you find lots of mom and pop cell phone shops; these are the ones that tend to deal in prepaid. you find those types of shops here as well but only in the more poverty stricken neighborhoods; and when you do they are selling prepaid or local unlimited service plans to customers who know what to demand for.
spg
IT’S TIME TO EXAMINE OUR BILLS AND SWITCH TO PREPAID OR IF WE DO NOT TRAVEL AND LIVE IN A CITY WITH AN UNLIMITED LOCAL OPERATOR(METRO PCS OR CRICKET FOR $30/MONTH) TO MAKE THE SWITCH AND NEVER LOOK BACK. ENOUGH OF US DO IT AT&T VERIZON WILL START TO WAKE UP.
Comment by Stefan Constantinescu
20 Euros here gets me through a month of usage. Free incoming calls and incoming SMS. Minutes are 7 cents a minute outbound, same thing with SMS. Data is 70 cents a megabyte BUT i can sent a text message to a special number and get unlimited data for a day for 2.90 euros a day or 6.90 for an unlimited week. they [Kolumbus] always runs a sale. i can usually buy 60 euros worth of credit for 40 euros. to top up i get a scratch off card with a number that i need to send via sms to another number. i’m happy as hell with what i have.
Comment by dziny
Every time I come to US I use prepaid (new) T-mobile bought from ebay from about $10. Pretty good deal for 150 min. Thanks to asterisk forwarding I’m still reacheable at my usual numbers.
Comment by PhoneBoy
@spg: the reason it “looks” like prepaid costs a fortune is because many Americans can’t or won’t do simple math. They understand $40/month (more like $46 a month after taxes and made-up fees), but can’t figure out 1000 minutes at $100 is $0.10 a minute.
@stefan: Finland used to have a rockin system, but I’ve heard the operators there are starting to pull U.S.-style rate plan/contract confusion. Hopefully the Finns tell the operators where to stuff it.
@dziny: Yeah, you can get unactivated prepaid SIMs on eBay surprisingly easily, and for surprisingly cheap.
Comment by A.T.
flat rate per month is the only way out, everything else is rip off
Comment by Martin Schultz
A compromise thats the normal subscripton type in denmark. My plan says that I have to use minimum 200 danish kroner a month (around 38 USD), but I can spend them as I like. I find it better than the x number of minutes and x number of sms plans as I can pay for what I really want to use and not get locked into some preplanned use expectations.
Comment by PhoneBoy
Well that’s better than nothing. Still get overcharged if you don’t use 200 kroner worth of service, though.
Comment by Marshalling Prepaid
For those users traveling to the states or those with existing prepaid plans I have found a great service to get even more out of your prepaid phone. If you order your airtime through MobileREUP you will get extra airtime for free. No PINs or cards required and the funds are instantly added to your mobile account.
Check out their offers from specific US carriers
AT&T OR Cingular Go Phone
http://www.mobilereup.com/att
Verizon InPULSE phones
http://www.mobilereup.com/verizon
T-Mobile To Go
http://www.mobilereup.com/tmobile
The MobileREUP service also works with many other prepaid carriers.