02 June 2013

Choosing Cellular Competition–A Sweet Young Ting or a Virgin Mobile?

Cellular telephony allows us to always be in touch telephonically, to act as a digital music player, to have a camera and video cam at the ready, as well as potentially carrying around a computer in the deceptive disguise  of a smart-phone.  Some foolish souls will risk life and limb to keep their cell phones. But these ordinary conveniences come at a cost.  Today, a sizable major portion of Americans household budgets are dedicated to communication costs.  People become so caught up at the prospect of a shiny new telephonic toy that they lose sight of the monthly costs associated with this privilege.  

Recently, I wrote "A Cellular Call for Change” to consider how the mobile telephony industry in America is on the cusp of shifting away from highly subsidized handsets with expensive iron clad two year contracts to more of a BYOD marketplace which offers lower rates if you foot the bill for your phone.  The article urged the savvy consumer to know yourself and investigate thoroughly. 

Well, I took my own advice.  I dug deep into a spreadsheet about my household’s cell-phone usage while doing an intense analysis of cellular providers plans and quirks.  The results were somewhat surprising.

My household has been with Sprint for nearly six years.  We are well out of contract with our current smart-phones (a HTC Evo and a Samsung Epic) but we have been happy with the service, aside from the cost.  Since our handsets are in excellent condition, there is neither a need nor desire to upgrade phones, especially in return for a costly 24 month contract. 

Even though we were initially sold on Sprint because of the 7PM Nights and Weekends, a hard nosed analysis of usage showed the most of the minutes used stemmed from free Mobile-to-Mobile calling.  Yet including the Anytime, Nights and Weekends as well as Mobile-to-Mobile minutes, we never broke the 1000 minute total threshold (and one of the handsets consistently used most of the minutes).  Our texts were under 1000 total.  Data was the variable.  While it was nice to have the certainty of Unlimited Minutes, my household was not a data hog. There were a few times over the course of the year when we used 3 Gig of data a month between the phones, most months hovered just over 2 Gigs combined.  There were few months when mobile data usage was above 3 Gig and one month at 4 Gig.  

Most of our time is in the District of Calamity (sic) or Between the Beltways.  But much of our travel takes us to southwestern Virginia where cellular service can be persnickety, and 4G coverage is virtually non-existent. Our experience is that Sprint Network voice and data in the destination area is good for us without paying the high fees for Verizon’s stellar coverage.  

One would think that cellular companies would be keen on keeping their customers, especially those customers who are not servicing a subsidized phone anymore. Both Verizon and ATT have churn rates below 1%, while Sprint has a 1.69% churn and T-Moblile sports an ugly 2.10% rate. But such competitive spirit was not shown by our current carrier, as a couple of calls to Sprint’s Customer Service proved otherwise.

These Sprint Customer Service Reps were supposed to be staffing a retention line.  But other than being thanked for our long time loyalty and being reminded of a current rate, we were not given any incentives to stay.  Since we did not need a new low cost phone in exchange for a two year contract, they could do nothing for us. It is infuriating to pay a $10 a month surcharge per handset for smart- phones well after these extra costs were long since covered.  Worse yet, the CSRs gave conflicting and incorrect information while running down their Mobile Virtual Network Operator or MVNO competition (including Boost and Virgin Mobile which Sprint owns)..  The  CSR insisted that we could only save $30 a month by switching to a MVNO despite my research that we could save nearly thrice that amount. 

My research led me to two potential choices–a sweet young Ting (sic) or a Virgin Mobile.   Ting.com is a  MVNO owned by Tucows which operates off of the CDMA Sprint Network. While Ting has only been offering prepaid cellular service since February 2012, their parent company Tucows has been around since 1994 which gives it some credence of stability.  Ting’s distinctive feature is use what you pay for billing.   

Ting's pricing is given in tiers from XS to XXL for voice, texting and data and consumers can mix and match on a monthly basis.  If one estimates too high for any given service, Ting will credit the customer for the next month.  Ting does not charge for hotspots, which is a hot point for switching from Sprint which charges $29.99 per line for the privilege.  One other welcomed feature from Ting is a Customer Service line which operates during extended weekday business hours based in Canada, so a customer can understand what is being said to them, eh?  Ting does not subsidize handsets, but allows for BYOD (Bring Your Own Devices).

Ting seems to charge full freight on the new cell phones that they sell (even compared to other prepaid cellular services), but they have links for getting refurbished handsets as well as allowing one to BYOD.  While many all you can eat cellular consumers could have if they were charged based on usage, it seems that Ting has slightly higher rates for add-on data.  For instance, if a consumer exceeds 3Gig of Data, more data is charged at $22 a Gig.  If a consumer watches lots of mobile video or has cut the phone cord at the house, an unlimited plan may be a better way to go. 

For our household's purposes, the other cellular player is Virgin Mobile.  Virgin Mobile is a quasi-MVNO which is owned by Sprint and is their mid-ranged prepaid cellular service.  Virgin Mobile does not have the sexiest and newest smart-phones but their plans are quite attractively priced.   Virgin Mobile rates have three tiers.  
For $55 a month, one can have unlimited voice, texting and data.   The $45 a month plan has 1200 Voice  minutes, unlimited Texting and Data A $35 a month plan has 300 Voice minutes, unlimited Texing and Data.

The caveat to unlimited data is 2.5 Gig at up to 4G speed, then a consumer is throttled back to 3G speed until the next billing period. If a consumer uses a Virgin Mobile hotspot, it is an additional $15 a month.  Although it is damn near impossible to speak to a human being through Virgin Mobile’s toll free number, the cyber telephone tree can yield information as well as the website.  Moreover, bills can be paid at plethora of locations, including 7-11 along with the web. 

While there has been conflicting information, Virgin Mobile does allow some Sprint CDMA devices to be ported to their MVNO.   Not all phones can be used thru Virgin Mobile as hotspots, so 4G Wimax phones are fine but the new to Sprint 4G LTE handsets can not be used in such a profligate way. 

Practically speaking, switching to Virgin Mobile does requiring replacing one handset and separate billing for each line.  At this time, Virgin Mobile is offering the Samsung Victory– a mid ranged Galaxy class handset with 4G LTE capabilities– at a reasonable rate.

Although I can conjure scenarios in which opting for Ting would save slightly more money than Virgin Mobile and offer free hotspots.  But for those out of pocket times when mobile data is key, a cost effective tactic would be to use a no to low cost external hotspot from FreedomPop.  It takes two for that plan to work and that may be too confusing to implement.  So the lowest priced option might not be the best way for my household.

Since most of the heavy mobile data usage would be in areas which only have 3G data coverage, it would not matter if the 4G was throttled back.  The hotspot could be turned on for the months when significant time is spent at the rural locale.

So as it stands, Virgin (Mobile) comes out on top in the head to head cellular competition against Ting.   Either way, it will cut our cell phone bill in half. The costs incurred to switch to Virgin Mobile to buy a new handset would be recouped in two months of savings viz-a-viz Sprint.  But I’ll still hold onto my old HTC Evo, as a backup and in case I switch again to a BYOD MVNO. 

Thomas Sowell once opined that “There are no such thing as solutions, but only trade offs.”  So to make the right choice, a savvy consumer should run the numbers themselves, determine if their carrier gives good reception where the phone will be used the most and determine how he will use cellular service.  If you are just texting, Ting charges $9 a month with 1000 texts or an SMS happy user $17 a month for 4000 texts. 

Virgin Mobile hypnotically suggests that one should "retrain your brain."  Some might find all of the choices confusing and headache inducing.  But think about all of the aspirin one can easily afford from your monthly cell phone savings! 

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