Are cell phones now cheaper than regular phones?

Are cell phones now cheaper than regular phones?

Are cell phones now cheaper than regular phones?

Answers to your questions about the news.
Nov. 13 1998 1:09 PM

Are cell phones now cheaper than regular phones?

Could it possibly make financial sense not to install a normal phone in your house and to rely exclusively on a cellular phone instead? It depends on many factors, of course, but amazingly the answer is often yes.

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Sprint PCS offers a mobile phone line with voice mail, call waiting, caller ID, and call blocking, and 500 minutes of combined local and long distance calls for $50 per month. Additional minutes cost 25 cents each. Or you can pick a plan with 1500 minutes of calls for $149. In Seattle, where Explainer lives, the local phone company charges $16 for the phone line, $7 for voice mail, and $3 for call waiting. And Explainer has a 10c/minute long distance plan from AT&T with a $5 monthly surcharge.

Let's look at an actual phone bill Explainer received the other day. Explainer estimates he made or received about 100 minutes a month of local calls (which are free) and received 100 minutes of long distance calls, and he paid for 200 minutes of long distance calls. This pattern costs $61 from the local monopoly but would cost only $50 on a cell phone. If Explainer made and received 400 minutes of long distance calls per month, not only would his mother be pleased, but he'd save $21 dollars relative to a land line. And if he used 500 minutes a week, he'd still save $6.

Your results may vary. If you make lots of local calls and very few long-distance calls, the traditional phone may win since local calls are itemized on the cell phone. If you have a family and need multiple extensions, there's no such thing with cell phones, so you'd need to get entirely separate lines. You need to buy the phone: cell phones are more expensive ($99 for the cheapest one from Sprint), but there is no startup fee, whereas the installation and wiring for a traditional phone can be pricey.

Modem users will be disappointed to hear that a cell phone will not support the use of an ordinary modem. But in Seattle, at least, you can get a regular phone line stripped of call waiting, etc., for only $16 a month. So if you save more than $16 by using the cell phone for your calls, you can have a regular line just for your modem and still come out ahead.

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If your long-distance charges are roughly like mine, here's how to tell if you can save some money by switching exclusively to a cell phone.

  1. Add up the monthly cost of local phone service, the surcharge on your long-distance deal, and any extras you have (like voice mail, caller ID , etc ...). For instance, Explainer pays $31 dollars a month for a phone in his apartment with voice mail, call waiting, and a 10-cents-a-minute calling plan.
  2. Estimate how many minutes of local calls you make and receive per month, and divide by ten.
  3. Estimate your total average phone bill--including long distance charges and assuming you pay for incoming calls.

If (1) is greater than (2), and (3) is close to either $50 or $150, you'll probably save money by going cellular.

Note: Explainer does not receive any money or support from any cell phone provider. After researching this article, however, he is considering getting one.

Explainer thanks Slatereader Rich Wasserman for writing in to point out that cellular customers pay for incoming calls.