Saturday, September 21, 2013

Analyzing mobile phone plans: Our old AT&T plan vs. H2O wireless

We're enrolled in a no longer available AT&T plan that included a secondary phone option of 

  • shared family minutes, long distance, etc.
  • $10 monthly per device
  • $15 for 200MB data (with alerts when limit nears)
  • No SMS

At the moment my daughter is on this plan, the boys are on H2O wireless. Thanks to typical carrier hidden fees and some SMS usage billed at extortionary rates** the average monthly cost is about $33.

I'd been planning to switch her to H2O wireless too, but after doing a bit of analysis I can see why AT&T discontinued the plan we have -- it's oddly cost-effective for someone with the discipline to control data use. (The latter requires a level of self control that excludes her brothers.)

Here's a rough cut at what a valuation looks like for staying on this plan over 2 years (with a new contract iPhone) vs. switching to H2O wireless:

ItemEstimated value
Phone subsidy450
AT&T sneaky phone fee-40
iPhone 5S 16GB initial fee-200
Two year payments-840
H2O plan cost120*

So compared to H2O wireless staying on this plan would mean:

  • Pay an extra $510 over two years
  • Get an iPhone 5S (list $650)
  • Get enough data for location services, light email, iMessage, Facetime-audio

If we wanted an extra iPhone 5S her current plan would make sense. We don't, so I'm likely to switch her to H2O wireless when her contract expires - like her sibs. On the other hand, if we lose a phone it makes sense to add her back on this plan and get a new contract.

Again, I can see why AT&T discontinued this plan. It is oddly competitive with paygo options.

* As of today H2O wireless for our kids use pattern costs about $80 for two years - voice and SMS only. It used to cost $200 for two years, this $80 price is weird and seems unlikely to last. In fact I'm not sure I can even get this plan for her any more, I think it was an artifact of some pre-smartphone pricing.

** Most of her texting is via iMessage.

PS. Walmart online has an interesting list of prepaid options for AT&T compatible MVNOs.


Martin said...

Don't American mobile providers offer plans for children and teenagers?

An example from Switzerland would be a Swisscom plan for CHF 55.00/month (about USD 60) with a full flat rate for calls, SMS/MMS and mobile/public Wi-Fi Internet access. For users over 26, the plan costs CHF 75.00/month.

Another option – for all age groups – would be a Swisscom plan for CHF 35.00/month (about USD 38.50) with a full flat rate for calls plus 1 GB mobile Internet access, 1 GB public Wi-Fi Internet access and 1'000 SMS/MMS.

The subsidy for an iPhone is probably about the same as in the US. If you go with another Swiss mobile providers and buy your smartphone yourself, for example an iPhone directly from Apple, you will get a discount.

John Gordon said...

AT&T has a 'family plan' which is what we use. US subsidies are big -- about $500 per iPhone 5s. Are Swiss subsidies that high?

Martin said...

The subsidy for my iPhone 5 with 64 GB and a 24-month Swisscom subscription for CHF 99.00 a month (full flat-rate within Switzerland up to 7.2 MBit/s download and some included minutes/SMS/MBs abroad, no sim-lock, no net-lock) was CHF 470.00 a few months ago. CHF prices always include VAT, you might have to take that into consideration since prices in the US are usually net prices.

iPhone 5 with 64 MB at full price = CHF 969.00 (around USD 1'065 at today's exchange right)

Price with above-described subscription = CHF 499.00 (around USD 550)