Cell Phone Plan Review

Navigating cell phone carriers and service plans

We've split our coverage of cell phone plans into two reports. This report compares monthly cell phone plans. Our separate report on prepaid wireless covers pay-as-you go wireless plans. However, both types of service use the same networks, so call quality and reception are the same for each carrier, whether you use a monthly plan or a prepaid wireless plan. Prepaid cell phone plans, in which you purchase blocks of minutes at a time or pay on a month-to-month basis, are a good choice for those who don't want a long contract, don't make a lot of calls or don't otherwise qualify for a monthly contract.

While it may be tempting to focus on price when you compare wireless plans, the quality of service is equally important. That's a theory borne out in the marketplace. In 2007, J.D. Power and Associates reported that customers whose complaints were not resolved were six times more likely to switch carriers. On the upside, in its 2008 report, J.D. Power and Associates found that service -- in terms of connectivity, customer care, features and applications -- "has truly improved to the point where quality and performance are no longer barriers in the decision-making process around switching to exclusive wireless service usage." Consumer Reports' 2008 survey found similar results, with marked improvement across the board with respect to customer satisfaction from the magazine's 2007 survey.

The improvements are due in part, Consumer Reports says, to competition and legislation. Carriers have faced class-action lawsuits in several states and possible federal regulatory action from the FCC on issues ranging from unclear billing practices and misleading advertising of free phones to automatic contract extensions and high contract termination fees. In response, many cell phone carriers have voluntarily made changes to avoid lawsuits, with prorated termination fees and trial periods among the positive outcomes.

Even with the improvements, it's not easy to compare cell phone plans and service. You can't, for example, test the same cell phone in the same location using Verizon and T-Mobile. That's because there are two different network technologies at work. A mobile phone made to work on Verizon's CDMA (Code Division Multiple Access) network will not operate on T-Mobile's GSM (Global System for Mobile) network. Even if you could use the same phone to test multiple wireless plans, you'd only have results for one particular location, and as you probably know, you could walk 500 feet away, try the test again and get different results.

For that reason, the most effective way to judge cell phone service is through massive owner surveys -- enough that you are able to collect a consensus of opinion comprehensive enough to conclude which wireless carriers have the best network coverage, the fewest circuit overloads, the least number of dropped calls and the most effective customer service. Three of the publications included on the Our Sources page have the budget and wherewithal to do just that. J.D. Power and Associates polled nearly 21,000 respondents for its 2008 survey. Consumer Reports magazine conducted a massive survey in 2008, collecting responses from more than 51,000 of its subscribers in 23 major cities. Meanwhile, PC Magazine conducted another large cell phone satisfaction survey in 2007, polling nearly 20,000 of its magazine subscribers. No other reviewers could come close to matching the efforts of these sources.

Over the past few years, the industry has undergone a wave of mergers: Cingular with AT&T Wireless in 2004, and Nextel with Sprint. Verizon Wireless' acquisition of Alltel has been approved by the Department of Justice and the FCC. With 83.8 million users, the merger pushes it beyond AT&T as the nation's largest cellular phone provider. But these carriers haven't yet benefited from an increased coverage network. For example, Sprint's call quality is consistently rated below average in nearly every region of the U.S. by J.D. Power and Associates. Other reviewers echo those findings, noting that dropped calls and customer service are particular sore spots. AT&T's call quality fares better, but its customer service is rated as only average. When it's finalized, the Verizon-Alltel merger might provide a different outcome: Both carriers currently receive high survey ratings, and Consumer Reports noted that Alltel "typically matched Verizon for overall satisfaction and connectivity."

Network functionality, however, will become increasingly important as cellular phone options and services continue to grow. Features ranging from streaming television, web applications and data transfer to mobile shopping, GPS navigation and 911 emergency updates are becoming more and more popular with cell phone users. PC Today reports in its February 2009 issue that "mobile web connections will outnumber those made via desktop devices by the year 2020 and that the current number of 16 million users downloading navigation routes will increase to 70 million by 2014. Consequently, a carrier's network capacity, speed and ability to consistently deliver these services will be a key consideration when choosing a cell phone plan. More information on network technology -- both existing and emerging -- is listed in the Useful Links section of this report.