Manjoo: Listen Up, Verizon and AT&T—This Is the Perfect Wireless Plan

Innovation, the Internet, gadgets, and more.
June 14 2012 6:21 PM

The Perfect Wireless Plan

Listen up, Verizon and AT&T: This is how much you should charge for data.

(Continued from Page 1)

You wouldn’t pay extra for texts, voice calls, and for additional devices. You’d pay just for the amount of data you use—the more you use, the more you pay. This plan is simple, fair, and—depending on the price of data—it could save a lot of people a lot of money. Over the long run, this plan would be a boon to any wireless carrier that rolled it out. It would bring in more customers with more devices, and—as all those people spend more time using their various mobile devices over the next few years—the network would cash in. The only problem with this plan is that it’s so transparent and customer-friendly that it’s hard to imagine there’s any wireless company forward-thinking enough to consider it. Especially not AT&T. 

Still, let’s try to figure how much my fantasy wireless plan should cost. Today, different carriers offer vastly different prices for data usage. Under its new plan, Verizon charges $90 per month for its cheapest plan for one smartphone—$40 for the access fee and $50 for 1GB of data. That’s about 9 cents per megabyte of data per month. AT&T’s cheapest plan is $60 a month for 300 MB of data, which works out to about 20 cents per megabyte. But if you pay $70 a month, you can get 3 GB of data, which works out to a tiny 2 cents per megabyte. T-Mobile charges $70 per month for 200 MB—a whopping 35 cents per megabyte—but its $80 per month, 2 GB plan brings that down to 4 cents per megabyte. And finally there’s Sprint, the only one of the four major wireless companies that still offers unlimited data. Sprint’s cheapest unlimited plan is $90 a month. If you use a humongous amount of data, Sprint’s a great deal. Let’s say you use 10 GB per month on your Sprint unlimited plan (far more than Americans’ average cell data usage of around 500 MB per month). In that case, you’d be paying Sprint around 1 cent per megabyte.

If you study these prices, you notice a couple things. First, they vary widely. Second, after you meet a certain minimum price—after you get past AT&T and T-Mobile’s cheapest plans—the carriers can afford to sell data for very cheap, less than 5 cents per megabyte per month for AT&T, Sprint, and T-Mobile.

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So let’s be generous and choose that as the starting price for my perfect plan. Even more generously, let’s give the carriers a couple extra cents for adding unlimited voice and texts and letting you share your data across any number of devices you like. So that’s 7 cents per megabyte, with a minimum of 1 gigabyte. That means my perfect plan will cost you $70 a month for 1 GB of data. More data would cost $10 for every 2 gigabytes (as in Verizon’s current plan), so $80 for 3 GB per month, $90 for 4 GB, and so on.

Depending on your current usage, my perfect plan might be more expensive than what you pay now. If you’ve got only a single smartphone and you don’t consume very much data, you’d pay $10 more under my plan than for AT&T’s 300 MB service. But if you’re like most Americans, your mobile data usage—and the number of devices you’re using—will likely skyrocket over the next few years. The research firm Nielsen, which has been analyzing more than 65,000 volunteers’ phone bills, says that most people’s mobile data usage doubles every year. The company also notes that the average teenager sends or receives 3,400 text messages a month. This means that for a lot of wireless customers—especially those in households with text-mad kids—my perfect plan could save money over time. As you and your family accumulate more devices—a 4G tablet, a 4G laptop—you won’t have to pay extra for each new thing. You’d pay only for the data you use. And that’s as it should be.

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