While back-to-school shopping still calls for trips to the mall for pens, paper, and pairs of jeans, many households today are also sending their kids off to school with shiny new cell phones and wireless plans in hand. Choices around students' wireless phones can be much more complicated than decisions about other things that get stuffed into their backpacks, and the consequences can be costly.
Yet whether you're investing in a wireless phone plan for yourself or another family member, you can simplify matters by figuring out in advance how often, where, and under what circumstances the phone is likely to be used. Of course, you'll then need to weigh the answers to these questions against how much you're able or willing to spend.
Keep in mind, too, that kids' cell phone needs can vary a lot depending on age and grade level. A third-grader might only need a pre-paid phone for emergency calls to parents, for example. On the other hand, his college-age brother might be best off with an unlimited voice calling plan that gets rid of the expense of a separate landline phone in the dorm.
As studies have shown, teens tend to send and receive a lot more texts than older counterparts. Younger adults also make even heavier use than their older counterparts of data services such as Web surfing, e-mail, and instant messaging (IM). So teens might have very legitimate needs for text and data just to keep up with their friends and maintain normal social lives.
Unfortunately for parents, though, many wireless carriers are taking full financial advantage of these trends. Carriers have always charged extra for text messaging. Now, over the past year, big cellular providers have started attaching larger fees for data, too.
As with voice calling plans, though, there are some texting and data plans around that can help you save on e-mail, Web browsing, and the like.
Where to Start?
If your family needs a new wireless phone, where should you start? Should you pick out a cell phone first, and then select a wireless plan, or should you do your decision-making the other way around? Generally speaking, it makes the most financial sense to choose a wireless plan first, unless your kids are absolutely screaming for a specific smartphone and you can easily afford to comply.
If nothing will do but iPhone, your choice of U.S. wireless carriers is limited to AT&T, a provider that might or might not offer reliable 3G services in your area. Although AT&T is subsidizing part of the cost, you'll still have to pay $199 (for a 16 GB edition) or $299 (for a 32 GB) model with a two-year contract, plus the costs of both the voice and data plans that AT&T requires for its iPhones and other high-end phones.
If you're able to be more flexible about the phone itself, you can probably pick up a phone -- even some smartphone model -- from just about any provider either free of charge or for under $50. Generally a one- or two-year contract is required for deals like this, but not always. Right now, Web sites such as wirefly.com are offering the original Motorola Droid free of charge while supplies last, while Verizon gears up for the Droid 2.
Alternatively, you and your kids might be able to limp by with either a low-end feature phone or a mid-range phone in the category Verizon Wireless has referred to as "3G Multimedia Devices," such as the LG Chocolate Touch, Samsung Rogue, or Motorola Rival. Unlike smartphones, these midrange devices don't run software apps. Yet they do come with HTML browsers for Web browsing, e-mail, instant messaging (IM), and other data services. Even low-end feature phones are capable of text messaging, even though they don't have Web browsers.
Some assistance in making this decision is offered in Brighthand's guide to "Must-Have" Features for Smartphones.
Voice Calling Plans
Just about invariably, wireless carriers still price their voice calling plans on the basis of minutes per month. In deciding on a plan, you need to make some careful predictions. If you buy a plan with more minutes than your child really needs, you'll be paying for unused minutes. On the other hand, if the child goes over the limits of the plan with voice call minutes, you can get socked with some big unanticipated fees.
Although voice plans vary, most carriers offer plans for light, medium and heavy users of voice calling. AT&T, for instance, currently charges $39.99 for a 450-minute monthly voice calling plan, $59.99 for a 900-minute plan, and $69.99 for an unlimited plan. (With the $39.99 plan, you also get an extra 5000 minutes of night and weekend calling time).
Many carriers, though, give you a chance to save money on voice calling through so-called family plans, in which you pay only a relatively small sum -- such as $10 or $20 each -- for extra cell phone lines which can be used by either kids or other family members.
If your child is only going to be using a cell phone once in a while, a prepaid plan can bring your family another way to save. Here, you pay for voice calling services in advance -- typically in chunks of 30 or 60 minutes -- allowing you to keep track of your child's wireless usage so that Suzie or Johnny can't be on the phone 24/7, leaving an unexpected dent in the family budget.
There's no contract with a prepaid phone, and no credit check, either. On the down side, though, prepaid plans often charge as much as ten cents per minute for voice calls. Typically, too, unused minutes expire 30 to 90 days after purchase.
While the "big four" wireless carriers all offer prepaid plans, you can sometimes get better rates through smaller companies. Page Plus, for example, offers rates as low as four cents per minutes in denominations of $10, $25, and $50.
Text Messaging Plans
Also as a general rule, large wireless carriers offer two ways of paying for text messaging: on a per message basis (typically around 20 to 25 cents) or a bundled plan (generally priced at around $15 or $20 per month for unlimited messaging). Your carrier will tack these charges on to whatever you're already paying for voice calling. If you elect to pay on a per message basis, you'll be charged for inbound texts received by your kids, as well as any outbound texts they send.
According to one study, half of all teenagers today send 50 or more text messages daily. So if you do have a teen living in your home, paying on a per message basis could be very cost prohibitive.
Another option is to purchase a data plan on top of a voice plan and then ask your teen to use an instant messaging (IM) service such as AIM instead of sending texts. The only problem here is that your teen will only be able to send IMs to friends who also have browser-enabled phones with data plans. Meanwhile, the inbound text messages from friends with low-end feature phones will undoubtedly keep rolling in, anyway.
Some smaller providers of prepaid voice plans -- including Page Plus, Alltel, and regional provider Cricket, for example -- also sell prepaid text messaging services for additional fees. Under Page Plus' Power Text plan, for example, unlimited texting is available for an extra $19.95 per month.
Cell phone costs for families (and everyone else) are skyrocketing highest around data plans. Last January, Verizon decided to expand beyond the $29.99 unlimited data plan fee assessed to smartphone owners by tacking on a data plan requirement for 3G Multimedia Devices. Under that plan, owners of devices such as the Chocolate Touch suddenly got forced to pay a fee of between $9.99 per month for 25 MB and $29.99 per month for unlimited monthly data.
So far, Verizon has stuck with unlimited data plans for both its smartphones and midrange phones. In June, however, AT&T ditched unlimited data in favor of two other plans: DataPlus, covering 200 MB of data for $15 per month, and DataPro, covering 2 GB of data for $25 per month. New subscribers to the iPhone and some other higher-end phones are now required to pay for one of these two plans.
T-Mobile has also been selling unlimited data plans, but a lawsuit just filed in California charges that the company's plans for its myTouch 3G and Nexus One smartphones are "deceptive." More specifically, the suit alleges that T-Mobile has been capping usage at 5 GB or 10 GB before cutting off access to its 3G network and lowering Internet speeds.
Among the top four carriers, Sprint still seems to offer the best wireless deals around. Its "Simplify Everything" plan provides unlimited voice, text, and data services for $99 per month. Sprint's "Everything Data with Any Mobile, Any Time" supplies unlimited data and messaging plus free night and weekend calling.
Services run even cheaper through Sprint's Boost Mobile prepaid division. Boost is still offering unlimited voice, text, data, and "push-to-talk" (walkie-talkie) services for $50 per month over the iDEN network gotten through Sprint's Nextel buyout. Earlier this year, though, the prepaid division added access to Sprint's CDMA network while creating a similar, $60 per month soups-to-nuts wireless plan for smartphones such as RIM's BlackBerry Curve 8330.
Lessons to be Learned
You don't need to be a PhD. to figure out a wireless phone plan without breaking the family budget. You do need to take a close look at how the students in your family will be using their phones. Then, do your homework based on what you find.
After you've come up with a plan for now, stay on top of what's happening in wireless phone plans. Value propositions and available deals are sure to change over the year ahead, with more capable 4G phones and wireless networks about to become more commonplace.
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