[Author’s note: this post was written over a month ago, but just posted today.]
With this week’s announcement of the new iPhone 5, I have began some serious consideration of upgrading from my iPhone 4 to the 5. As a Verizon customer, I am faced with a dilemma with the choices of smartphone plans: keep my existing plan with unlimited data or switch to a new plan with a tiered data plan. Or, to put it another way, buy the phone at the unsubsidized price or the subsidized price.
Verizon, like many of the other cell companies, wants to move away from the “unlimited data” plans of years past – like two years ago. Smartphones like the iPhone and Android-based phones are the equivalent of clingy girlfriend – no matter how much you give them, they want more. They demand more! I suppose that the powers that be in these companies began to realize how they missed the cash boat on this one, not unlike the other cash boat on the S.S. Text – which they did not miss. Voice? Dead. Text? Not dead but call the priest because we need last rights. Data? Welcome the new sheriff in town. Think about it, everything you used to need your cellphone for, call all be done through the big series of tubes that is the Internet.
Verizon isn’t dumb. They scraped their unlimited data plans this year in favor of tiered plans. Text? Voice? Unlimited. Data? Haha. This is a sign of the times. Why this year? Oh hmmm…. I dunno. Maybe because the best selling smartphone of all time was more than likely going to release a new phone and with LTE capabilities no less. LTE is fast. It’s not dialup to DSL fast, but it is damn close. So can you imagine all the big-wigs at Big Red sitting around an evil looking conference table made of sacred Redwood trees, stained with virgin blood, and festooned with souls of customers who couldn’t pay their roaming bills. “We spent all this money installing all this LTE infrastructure, now who the hell is going to pay for it?” Duh.
Whoever said Verizon was or potentially could be an evil, greedy, soul-sucking company that cares for nothing else except for profits is clearly not seeing the whole picture. If a customer wanted to update their iPhone and maintain their current plan, all they have to do is pay the unsubsidized price for the phone. At least they are giving us a chance. It comes down to either paying six hundred bucks for a phone or two hundred and sign a new two-year contract. I imagine that Verizon, as well as AT&T and others, are counting on people not wanting to cough up that chunk of change just to keep the same plan.
Yet, I’m one of those morons that would consider plunking down $600-$800 for for a phone. I mean, hey, if they are going to give me the opportunity to keep my unlimited plan, why not explore it? I decided to do the math for both choices and decide which was the better option financially. Instead of making you read the whole process I used to come to my conclusion, I will just say now that by paying full price for the phone and keeping my current plan, I would save about $150 over two years. Read on if you are interested at all in how I came to this number.
To start, the first thing I had to do was look up the details of my current plan. I am on Verizon’s Nationwide Talk 450 plan, which, I assume, is a relic of years of old when cellular providers really gave a crap about how many minutes you used actually talking on the telephone. Then came the tiered text plan, plus the monthly static data charge. The plan was designed to reap the rewards if you went over your talk minutes or sent/received too many texts. If you did go over these limits then the penalties were hefty. Data? Data was a joke. Who cared? Data was the river that never went dry. Going on per memory (and laziness of not wanting to exam every single bill) I would guess that I went over my talk minutes only once and surpassed my texts limit probably five or six times. All of this comes with somewhat of an irony because the new Verizon plans have unlimited texts and voice. Why? Because all they care about is how much data you are hoovin’.
The next step was I had to determine how much data I have been using and from that number pick one of the tiered data plans that best suited the quantity I have been accustomed to. Logging into my Verizon account online, I went back to the beginning of the year and found the data usage totals for each month.
Data Usage (2012)
- September = 994325KB or .9GB
- August = 1738501KB or 1.7GB
- July = 1872961KB or 1.8GB
- June = 1256620KB or 1.2GB
- May = 1106385KB or 1.1GB
- April = 1589344KB or 1.5GB
- March = 1410325KB or 1.4GB
- February = 690907KB or .6GB
- Total = 10659368KB or 10GB
- Average / month = 1332421KB or 1.2GB
As you can see, I’m using quite a bit of data. How so in this world of wi-fi aplenty? Simple. The wi-fi at my work is a joke. It’s like the fucking Holiday Inn but worse. Every single time you want to use the wi-fi, you have to log-in to the splash page. This is all well in good if you are on a laptop, but when you are on a smartphone that uses apps requiring Internet access, it is a down right pain in the ass to go log-in via a website just to use the Maps app. On the train ride to and from work, I used to phone for web browsing to answer universal mysteries like how many carpenter bees does it take to eat your house. Then, at home, I had no real honest-to-goodness wi-fi. I had a separate plan with Verizon using one of their LTE Mi-Fi spots, but I didn’t dare hook up my phone to that fearing I’d peg the monthly data limit in the first week.
[Interesting side note: When I called Verizon to cancel my Mi-Fi spot, the customer support representative I happened to be speaking with suddenly, without prompting from me, asked me if I wanted to upgrade my phone and contract. We got into this small discussion about the new plans versus my current one. He fed me what had to be a pre-programmed and trained line about there being wi-fi everywhere and how this enabled you to use less data. Can you imagine people actually believing this bullshit? It’s the FPS game logic: you don’t need to carry a lot of ammo because you will just take more from the bullet-ridden corpses of your enemies.]
After determining my average monthly data usage, I then had a baseline in which to choose one of the new Shared Plans. With an average usage of 1.2GB, the clearest choice was the Share Everything at 2GB of data per month at a cost of $100. This would be an increase of $25 over my current bill. While the new plan includes unlimited talk time and texts, I rarely use the phone AS a phone, and with iMessage firmly entrenched, I do not even come close to the 250 text limit anymore. (I’m still guessing Verizon and AT&T are both still fuming at Apple for slaughtering their biggest cash cow.)
Ok, now I had the information I needed to get down into the nitty-gritty math. And this is where things go out of control. I do not proclaim to be some Math Gandalf, but with a calculator, I can be armed and dangerous and stupid. The way I looked at was like this: to analyze the cost of signing a new two-year deal and paying the subsidized price for the phone versus full price was I had two set a two year baseline for each comparison even though keeping my current plan did not mean I was locked in to a contract. That way, I could break down the cost of the plan and the phone on a per month basis over an equal span of two years. Remember, I was looking for what’s the best choice in terms of the almighty dollar.
First, I needed to pick an iPhone based on memory size. My current phone is 16GB and it is about damn full. In retrospect, I think back to that moment when I first decided which size phone to buy and wondering, “How will I ever use 16GB??” It is the equivalent of Bill Gates saying, “Who’s ever going to need more than 640k?” Sure, pal. I decided to double my capacity to 32GB and go from there. The full retail price for a 32GB iPhone is $749 while the subsidized price is $299. That breaks down to a cost $31.21 and $12.45 per month over two years, respectively.
The 2GB Share Everything plan is $100 per month, then add the subsidized phone monthly cost of $12.45 and that totals $112.45 per month, not counting all the beautiful fees they add on to every bill. Over two years, that totals $2698.80. (Can you believe it’s almost three grand to have a fucking phone?)
My current plan is $74.98 a month. Add the $31.21 per month for the unsubsidized phone and that totals $106.19. Over two years, the total is $2,548.56. Do some quick subtraction and the difference between the two options is $150.24 or six bucks a month. Thus it is $150 cheaper over two years to buy the phone at full price and keep my current plan, assuming I don’t go over on text or voice usage.
Hmm… ok. Next I wanted to delve a little deeper with assumptions. What if I picked the 1GB Share Everything plan? The 1GB plan is $240 less over two years compared to the 2GB plan and $4 cheaper a month then my current plan (when taking into account phone cost), but how does the math look when factoring in overage fees? Checking back into my data usage, I went over 1GB six out of eight months, essentially three out of four. Going with that ratio, in a year, I would be charged the overage fee of $15 for nine months. That is an additional $135 a year or $270 for two years. Add that two the total two year cost including phone cost and monthly plan and the total is $2,593.80 or about $108 per month. So assuming this 3/4 ratio of overages stays consistent for each year, my current data plan is $2 cheaper a month. Not a great amount.
But what about the cost of convenience? In order to stick to my current plan, I would have to buy the phone in person at an Apple retail store or a Verizon store and WHO KNOWS when either of these places will have the phone in stock for some ass to stroll in off the street to buy one. If I changed my contract, I could order one online from either Apple or Verizon. Of course, I’d have to wait a couple weeks but at least I would be standing in a virtual line.
There is also something else to consider here… LTE. It is fast, damn fast compared to 3G. I had a MiFi spot and 4Mbps download was not uncommon. LTE doesn’t cost more than 3G, assuming I use the same amount of data, but it is safe to say that because it is faster, I don’t have to wait as long for cat videos or monkey porn to load. Meaning I spend less time waiting for videos and website to load and allowing me to look at more cats and more monkeys in the same amount of time. This means using more data in the same amount of time as before. This is where the keeping the unlimited data plan really shines. Otherwise, I will have to police myself and wonder how many more monkeys I can look at for the rest of the month.
In the time since I had initially written this diatribe and posting it, I was able to pre-order the phone via store at Verizon Wireless and choose the month-to-month option with my current plan. The current status says my phone will ship October 19.