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Cellphone Services 2015: Talk, Text & Data

How to Match Today's Best Wireless Plans to Your Needs

New payment methods and a flood of changes to data plans make it difficult to determine which wireless plan and options deliver the best deals.

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If you're dismayed to see what the four major wireless telecommunications companies (or carriers) charge for access to their 4G LTE networks or are mystified about which payment method to choose when you buy a cellphone in 2015, then we understand the confusion. To paraphrase Mark Twain, if you don’t like their data-plan pricing or payment options, then just wait a few minutes. Like the weather, your options will change.

The past 2 years brought about the most radical shift in how AT&T, Sprint, T-Mobile USA and Verizon Wireless sell both phones and cellular-network services in the 30-year history of the industry, according to every cellphone analyst and carrier executive with whom we spoke. Most notably, it wouldn’t surprise us if the conventional purchase-payment model—a subsidized price that’s tied to a 2-year contract with a carrier—were eliminated in the years ahead.

Instead of the conventional subsidy system, carriers increasingly steer consumers toward paying for their phones through a monthly installment plan that requires no contract. You also can pay full price for your phone upfront or even lease the device if you pick one of the seven smartphones through Sprint. Which option is best for you depends on how often you typically upgrade your phone, as we’ll explain later. Meanwhile, the amount that you pay for service––data, voice and text––is tied inexorably to how you pay for your phone. In short, the less that you pay for your phone, the more that you’ll pay for service and vice versa.

Since fall 2014, carriers started a game of “can you top this” when it comes to data-plan availability and pricing, and experts whom we interviewed say such competition-driven incentives will continue in 2015. For instance, AT&T, Sprint and Verizon launched plans that allow customers to double the amount of monthly data that’s available to use without paying extra. In December 2014, T-Mobile rolled out the first family plan that delivers unlimited access to data each month as well as the industry’s first plan that allows you to bank unused 4G LTE data each month and use it in future months.

Unsurprisingly, experts believe that it’s a sure thing that the service plans that the four major carriers offered at press time will have changed substantially by the time that you read this. “Go to Vegas and place that bet in a casino, and you’ll win money on that,” says Robert Lane of Sprint.

Sprint's Lease Option Has Limitations

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PICK A PAYMENT. All four major carriers allow you to pay for a phone in monthly installments. A so-called equipment installment plan (EIP) means that you don’t have to wait for your 2-year contract to expire before you upgrade to a new phone, although each carrier’s conditions differ slightly on how soon you can upgrade if you choose an EIP.

In 2013, T-Mobile was the first carrier to introduce an EIP, which requires equal monthly payments, typically $20–$35, depending on the price of a smartphone, and usually less than $10 for a basic cellphone, for 20–30 months, depending on the carrier’s terms. Carriers charge no finance terms or interest rates for an EIP. The primary difference between each carrier’s EIP is at what point after the purchase that you’re allowed to upgrade to a new phone and the consequences for doing so.

For instance, Sprint’s EIP (called Easy Pay) doesn’t allow you to upgrade to a new phone until you pay off the balance on your current phone, or you can pay an extra $10 per month to be eligible to trade up to a new phone after 1 year. AT&T’s EIP (called Next) allows you to upgrade after 1 year if you pick a 20-month payment plan, or you can upgrade after 18 months if you choose a 24-month plan. T-Mobile’s EIP (called Jump!) allows you to upgrade anytime that you want and as often as you want as long as you pay an extra $10 per month, but you still have to pay off at least half of the previous phone’s full price to qualify for a new phone. Verizon’s EIP (called Edge) spreads out payments over 24 months, and you can trade in your existing phone in as little as 30 days, as long as you have paid 75 percent of the cost of the phone. So if you bought a 16GB iPhone 6 but decide 1 month later that you rather would have a 16GB iPhone 6 Plus, you’d have to pay off the remainder of 75 percent to get a new EIP for the new phone.

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