Why Do ATT and Verizon Plans Cost More Than Others?

Why Do ATT and Verizon Plans Cost More Than Others?

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Ever wonder why there is such a difference between cellular plans from ATT, Verizon, T-Mobile, Virgin Mobile, and others?  It is actually not a simple answer, but in general it has to do with various factors that include the coverage of the network, the technology, the name brand, the phone subsidy, and other factors.

With that said, what cellular network has the best value?  Again, not a simple answer and it more depends on what you do rather than the cost of the plan.

For Example, If you like lots of data and don’t switch you phones out often than Straight Talk is the plan for you.  Straight Talk offers you unlimited data and voice for $45 per month but does not subsidize phones.  You may ask who is Straight Talk?  They are basically a reseller of Verizon, so you get unlimited data on Verizon for $45 per month.  Not a bad deal.

However, if you swap out your phone often for the greatest new smart phones that can retail for up to $650, Straight Talk is not going to work for you unless you can find your phones cheap.  If you talk the Samsung S5 at around $500, that works out to around $20 per month over two years.  Now you are closer to Verizon costs although you would still get unlimited data which Verizon does not offer.

To make things even more complex, you have companies like T-Mobile who offer hybrid plans where they will pay you to switch up to $650 to apply to early termination fees and a new phone and plans start at $40 per month and include unlimited data with slower network data if you hit the cap on their 4GLTE network.  Doing the math on this one can get complex.

ATT and Verizon will almost always give you the largest coverage, but you are paying higher rates per month since the subsidize most phones.  If you never switch your phones or are happy with an inexpensive phone then T-Mobile, Straight Talk, or Virgin Mobile would be better options.

Conclusion

Finding the right plan from today’s carriers really involves a bit more investigation on your end if you want the best value.   Here are the things to consider in your evaluation:

  1. How often do you switch your phones and what phones do you buy?  High end phones switched often will swing you to the Verizon, ATT, or Sprint.  Mid-range phones can bring Straight Talk, T-Mobile, and Virgin Mobile into the mix.
  2. Where do you live and travel.  Price is not relevant if you phone does not have coverage.  Determine the places you go often and make sure the carriers you consider cover those areas.
  3. How much data do you use?  If you use massive amounts of data, then Straight Talk is going to be your plan even if you have to spend $500 for a phone.  Verizon or ATT will charge more than $100 per month for high data plans.  The difference between $100 and $45 will pay for your new smart phone in under a year.
  4. How much voice do you use.  Most plans these days are going to unlimited voice, but some companies like Virgin Mobile offer limited voice/ high data for cheap.  That may work best for your needs.

02_64x64As you can see there are many factors to determine what plan will get you the most value.  Once you know your factors then use some basic math to calculate your yearly cost which is simply (monthly cost + phone cost + estimated overage fees).  This will give you a starting place to compare and then add in how often you switch phones, the area you live, and your usage patterns.  All this will lead you to finding the best value plan for your case.

Good Luck!

 

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