Best Cell Phone Plans

Regional and national carriers

In the most recent J.D. Power and Associates study, Verizon Wireless (*est. $40 per month and up) performs particularly well, ranking highest in five out of six regions (including four ties) for overall customer satisfaction. Its only miss is in the Southwest, where T-Mobile (*est. $30 and up) is the top choice. Verizon's main strength is connectivity, particularly in the Northeast, where Verizon call quality is significantly better than that of T-Mobile. T-Mobile generally shines, however, in customer service, cost, service plan options and billing.

To sweeten the deal, both Verizon Wireless and T-Mobile are now offering wider, more innovative options that could also save you money. For example, T-Mobile's HotSpot@Home offers free unlimited Internet calls through your home's wireless Internet network or at T-Mobile Hot Spots. This addition could save you hundreds of dollars a year in calls even when you're overseas, reports The New York Times. T-Mobile also has its "MyFaves" plan that allows you unlimited calls to your five favorite numbers.

In what has been another positive move for consumers, Verizon opened up its network in mid-2008 so that customers can use compatible phones not sold through Verizon. That means more choices for consumers, but critics say it doesn't mean you'll be able to use any phone; you'll still be limited to using CDMA phones, and the phone will have to be tested and certified to work on Verizon's network. Details on the plan are sketchy at this point. Verizon also has several well-targeted service plans: For avid text messagers, it has non-voice, text-only plans (starting at *est. $35 per month), while senior citizens who'd rather skip the text messaging and have lower minutes can opt for the simplified Nationwide 65 Plus (*est. $30 per month and up).

While Verizon and T-Mobile are usually ranked highest overall nationally, smaller regional wireless providers are also strong in their areas. For instance, Alltel (*est. $40 per month and up) ranks highly in a couple of areas, including Cleveland, Ohio, the North Central United States and parts of the Southeast such as Tampa, Florida. However, in the J.D. Power survey, Alltel doesn't score as well as Verizon and T-Mobile in other areas. On the upside, Alltel -- like T-Mobile -- has "My Circle," which gives you unlimited calls to your favorite numbers, but the basic plan includes only one "My Circle" number. Still, you get 500 anytime minutes with unlimited nights, weekends and mobile-to-mobile.

Another regional provider is U.S. Cellular (*est. $40 per month and up), which, in addition to Verizon Wireless, nabbed PC Magazine's Readers' Choice award among contract cell phone providers, even though it only serves 26 states. Its call quality is excellent in the North Central region, according to J.D. Power and Associates. Sprint and AT&T almost always rank lower in every region in most surveys.

One interesting option is that U.S. Cellular includes free unlimited incoming calls; its $40 national plan, for example, gives you 450 anytime minutes, plus free incoming calls and unlimited nights and weekends. That can be handy if you tend to receive lots of calls, because your monthly minutes will only be used for calls you dial. U.S. Cellular uses the CDMA network and partners with Verizon for roaming, although the roaming minutes are limited in a number of U.S. Cellular's plans.

Although Alltel and U.S. Cellular ratings are neck in neck in the J.D. Power and PC Magazine surveys, U.S. Cellular nudges ahead in the final count. The regional carrier wins in overall customer satisfaction over Alltel in two of the three regions (with one tie) in the J.D. Powers survey, landing slightly higher ratings in cost of service. And in the PC Magazine survey, U.S. Cellular garnered higher ratings in seven out of 11 categories, including coverage, call quality and customer service.

Most notably, U.S. Cellular has more coverage because of its wide area calling plans and roaming, and it provides service throughout most of the nation. Alltel, on the other hand, has significant gaps in coverage in key areas of the nation, including the entire West coast, Illinois and Indiana in the Midwest, and the majority of Northeast and Mid-Atlantic states. These areas encompass major urban hubs such as Los Angeles, San Francisco, Seattle, Chicago, Boston, New York and Washington, D.C. Again, this will all change once the merger with Verizon Wireless is finalized.

T-Mobile also deserves consideration, say experts, especially if you are a frequent international traveler. T-Mobile's pricing is usually less expensive than Verizon, especially if you make lots of calls or need more affordable Web access, text and multimedia messaging. T-Mobile's $30 Individual Basic plan gives you 300 anytime minutes per month plus unlimited weekend minutes with no roaming or long distance fees. If you live in the Northeast, Mid-Atlantic, West or Southwest, however, Verizon is the better choice, because its scores for call quality in those regions are better than those of T-Mobile. Verizon's $40 plan gives you 450 anytime minutes plus unlimited mobile-to-mobile, nighttime and weekends, with no domestic roaming or long distance charges.

All the major cell phone service carriers want to lock you into a one- or two-year service agreement when you set up a new wireless plan to prevent you from switching services. In 2006, households spent about $524 on their cell phone bills compared with $542 for their home phones, according to government data. And cell phone bills are expected to surpass landline charges as more people sign up for text messaging, video and music. Given these rising expenses, it's important to estimate how many minutes you'll likely use -- and the services you'll need -- before you sign a contract. You're better off initially subscribing to a less-expensive plan, then closely watching your usage -- especially for text-messaging. This feature more times than not will cost at least 10 cents per text message, and many national carriers have increased their per-message fee to 20 cents per message. Any wireless carrier will be happy to let you upgrade your cell phone plan to include more minutes or features, even retroactively in some cases.

Most of the national cell phone carriers have been testing the popularity of fixed-rate, high-volume voice/data plans that, according to The New York Times, "would turn cellphone use into an activity covered by a single, predictable fee, like watching cable television." The plans, however, are targeted at the "small yet valuable group" of high-volume daytime callers and may bundle features such as voice, text, data and web browsing. The fixed rate plans may be ideal for heavy multiple-feature users, but they could lock others into paying for unused time and options, and may not be the best deal overall.