At the end of last year, I finally made the last payment on a two-year device contract with Verizon. With that obligation out of the way, I decided to take a much closer look at my family's mobile plan to see if I could cut the monthly bill down even more.
I had a nagging feeling that I was paying too much. My final monthly bill, without device payments, was $137.75 for two lines of service and 12 GB of mobile data per month. After some research, I figured out that I could make a few tweaks to my Verizon plan and cut that bill down to an average of about $110 a month, with taxes and fees taking the total up to around $125.
Instead, I switched carriers. Since making that switch, my average mobile bill for the same two lines of service, with no changes in our usage, has been $52.50, also before taxes and fees. That's a drop of more than 52 percent. (And a lower bill also means lower taxes and fees, which typically add up to 15 percent of the total bill.)
And the kicker? All of our calls, text messages, and mobile data on those two lines are still going over Verizon's network, courtesy of a mobile virtual network operator (MVNO), Xfinity Mobile, whose publicly traded parent company is nearly as big as Verizon.
Here's how the math worked out:
The Verizon option
Among postpaid Verizon plans, the best value I could find for our usage patterns was a shared data plan with unlimited talk and text plus a monthly data allowance of 8 GB. That plan requires a $20-a-month access fee for each line plus $70 a month for the shared data, for a total of $110 plus taxes and fees.
A 4 GB shared data plan would have cut $20 off that bill, but also would mean occasional $15-per-gigabyte charge for overages. Even after factoring in Verizon's "carryover data," the extra charges would have resulted in an average bill that was about the same as the 8 GB plan or perhaps a bit more.
The Xfinity Mobile alternative
Because I have Internet access through Comcast, I qualify for their Xfinity Mobile, which is a Verizon MVNO. (Spectrum cable customers can get a similar deal with Spectrum Mobile, which uses the same Verizon infrastructure.)
Xfinity Mobile charges no line access fees and offers unlimited talk and text plus an initial allowance of 100 MB of data per line. Additional shared data is a flat $12 per gigabyte, with a $45-per-month "unlimited" data option that you can apply to any line at any time during the month. (It's easy to track data usage and make that switch using the Xfinity Mobile app.) Note that data is not pro-rated, so as soon as you pass a 1 GB threshold you're charged for another full gigabyte.
Over the past six months, our mobile bill including taxes and fees ranged from a low of $27.60 in February (you don't use nearly as much data when you're home nursing a cold and the weather outside is dreadful) to a high of $82.80. Assuming I check data usage toward the end of each month and switch a line to unlimited when it's warranted, our maximum bill for two lines would be $90, plus another $15 or so in taxes and fees.
Xfinity Mobile and Spectrum Mobile both allow you to bring your own iPhone but don't support Android devices unless you purchase them directly. (Like most U.S. carriers, they offer 0 percent financing on devices they sell.)
The biggest downside to using an MVNO like Xfinity Mobile is that you're one step removed from the network operator when support questions arise, and you don't have the same call management and account options as in the Verizon dashboard. (For example, you can't easily switch phone numbers between two lines.)
I had other options, including unlimited data plans that would have cost as little as $70, with no additional taxes or fees.
- Because I am over 55, I qualify for the T-Mobile One Unlimited 55+ plan, which costs a flat $50 for one line or $70 for two lines, with all taxes and fees included. (T-Mobile has similar discounts for military families.) The plan includes unlimited talk, text, and data, with mobile hotspot access at 3G speeds. Only one person on the account has to be over 55, and if you need additional lines you're out of luck. Alas, T-Mobile coverage in our neighborhood is too spotty to consider.
- Update: In the comments, a reader notes that Verizon also has a 55-plus plan. This is true, but the plan has extremely limited availability: As Verison's FAQ notes, you must have a "Florida, Illinois, Missouri, Texas or Detroit, Michigan, billing address on your account." If you live in one of those states and only need one or two lines, it's a good option.
- Verizon offers prepaid plans that don't require line access fees and offer discounts for multiple lines and for setting up automatic payments via credit card. You can mix and match data allowances as part of a family prepaid, with monthly tiers at 500 MB, 3 GB, and 8 GB. Our cost for two 8 GB plans would be a total of $75 plus taxes and fees, which is significantly better than the postpaid alternative. The one drawback (and not a big one for me) is that these plans don't allow you to purchase a phone at 0 percent interest and add the device payment to your bill.
- Google Fi is an MVNO that uses the T-Mobile, Sprint, and US Cellular networks if you have a compatible phone; devices that aren't designed for Google Fi use the T-Mobile network. The service requires a $20 access fee for the first line and $15 for the second and subsequent lines. Unlike other carriers, you can pause a Google Fi account any time and suspend that monthly line fee (you won't receive any calls or texts on that number while it's paused, of course.) Shared data is charged at a flat $10 per gigabyte, pro-rated for partial use, with no charge for data after the first 6 GB. Our average Google Fi bill would have been about $81 plus taxes and fees, I calculated. This plan is especially attractive for frequent international travelers, as I explain later in this post.
- Of course, there are other MVNOs, too many for me to mention. I didn't include them in my decision-making process but I know they work for many of my readers, and you can find some good suggestions in the comments section.
Now, your circumstances are almost certainly different from mine, and your decision might well be different. In this post, I explain how I reviewed my existing plan and the available alternatives. But the odds are good you'll find a money-saving alternative.
This isn't a "once and done" activity, either. Mobile carriers in the U.S. are constantly tweaking their plans, usually with the goal of squeezing more revenue out of you, the customer. So it's important to review these services at least every year or two to ensure that they're meeting your needs and that you're not overpaying.
You can't make the right decision unless you know exactly what you need. To get started, ask yourself the questions in this checklist.
How much data do you really use?
I suspect that most people who have postpaid accounts with major U.S. carriers pay for more data than they use. I know I did. So the very first thing you should do is gather up a year's worth of those bills, check your data usage, and see if you can save money by switching to a different plan with your current carrier.
When I reviewed my Verizon bills, I discovered that we had been paying for 12 GB of shared data every month, even though our actual usage averaged 4.4 GB and never went over 8 GB. Switching to a shared data plan with a lower allowance would have been an instant money-saver.
Are you willing to switch networks?
I don't care how many kittens and sweet gray-haired grandmas they put in their TV ads, American mobile carriers are cold-blooded capitalists. You and your family are users on an account, and your value is measured in two ways: ARPU (average revenue per user) or ARPA (average revenue per account).
One of your most powerful pieces of leverage is your ability to switch carriers. In fact, other carriers will often pay significant bonuses. I got a total of $600 in bonuses (in the form of prepaid MasterCards) for bringing two iPhones to Xfinity Mobile.
Do you really need an "unlimited" plan?
Carriers encourage you to be afraid of running out of data, and they're especially adept at convincing you to pay for their "unlimited" plan so you never have to worry about being charged for using more data than your monthly allotment. (On its most recent earnings call, Verizon's CFO bragged that pushing people to unlimited plans was very good for their average revenue per account. And don't get me started on how those plans misuse the word unlimited.)
For our two-user Verizon account, the basic Verizon GoUnlimited plan would cost a minimum of $130 per month, plus a significant additional helping of taxes and fees. And that plan includes some serious limitations, including video streaming that's restricted to 480p and a painfully slow 600 kbps cap when using your smartphone as a mobile hotspot.
To remove those restrictions requires upgrading to the BeyondUnlimited or AboveUnlimited plans, which would take the total bill up to $200 a month or more after taxes and fees. Either plan includes an Apple Music subscription, which is worth $15 a month, as well as some other perks; but after I finished crunching the numbers it was obvious that any of those Verizon plans would still be a waste of money for our needs.
Are your data usage patterns likely to change?
If you've been living with a mobile plan that includes a data cap, you've probably instinctively modified your behavior to stay under that cap. What would happen if you suddenly had a larger data allowance? Would your data usage change? For example, would you use your smartphone as a mobile hotspot if the price were right?
U.S. carriers often structure their data plans so that the incremental cost to upgrade from one tier to the next, higher tier is relatively small. The intent, of course, is to get extra revenue by getting you to say, "Well, it's only five bucks, so why not?"
And sometimes the pricing on those data plans is completely irrational, especially when promotions are tied in. While researching Verizon prepaid plans, for example, I found one set of options where upgrading from the lowest data allowance of 500 MB per month to a plan with a 3 GB per month actually cost $5 a month less.
Do you travel internationally?
My wife and I travel outside the U.S. regularly, sometimes on vacation and sometimes on business. European readers always love to point and laugh when they see how much money U.S. mobile carriers can extract from their customers as soon as they leave the U.S. border, and they're right. But not all carriers are created equal.
One thing you want to avoid at all costs is racking up data roaming charges by leaving your U.S.-based phone on while you galavant across another continent. Verizon charges $2.90 per MB (that's not a typo) which means a mere 50 MB of data usage, about enough to check your Facebook feed for 30 minutes, would cost $145.
But you have options.
- Verizon charges $10 a day ($5 in Mexico and Canada) for a Travel Pass that includes 500 MB of high-speed data. Over that limit, speeds drop to a 2G crawl. AT&T Wireless has a similar offering. The highest-priced Verizon unlimited plan includes five Travel Passes a month, which is a significant bonus for frequent travelers.
- Xfinity Mobile charges a much more reasonable (but still pricey) $0.10 per MB for overseas data access. There's no Travel Pass option, though, so you'll need to be frugal with your data usage when traveling (turn cellular data off except when you need it, don't download email attachments or check Facebook unless you're on Wi-Fi, and so on). With care, you can easily keep daily data costs down to a few dollars.
- Google Fi and T-Mobile plans, on the other hand, include international data roaming as part of your domestic plan, so you don't need to adjust your behavior when you go overseas.
On one lengthy European trip last year, I compared Verizon's $10-per-day Travel Pass option to the Google Fi alternative. On my wife's line, we paid the $10 fee for 13 days, resulting in total charges of $141.99. I brought along a Google Fi device, an inexpensive Motorola phone that I dedicate almost exclusively to international travel and keep paused when I'm home in the US.
For that same 13 days, I used a total of 2.439 GB of data, for $24.38 in data charges, along with roughly $10 in line access fees (half of the normal $20 monthly charge) and $1.60 for international calls (including calls forwarded from my domestic number). In all, that was a savings of more than $100 compared to the Verizon option. (If I had a T-Mobile line, my only costs would have been for international calls.)
The bottom line
It's tedious to gather together all the data to figure out which mobile plan is the best deal, but in my case the annual savings add up to about $800 a year, which makes the effort worthwhile. If you've done a similar analysis, please share your experience in the comments below.