Streaming 411

There was a time in the not so distant past when cell phone family plans with unlimited or rollover minutes meant staying connected on-the-go was so cost-effective that many people dropped their landlines in favor of a bundled wireless contract. 

When smartphones incorporated internet access, turning the handheld device into mini computer, the demand began to shift from talking to primarily texting, surfing and streaming.  The latter activity in particular in extremely bandwidth hungry, and wireless providers are now having issues managing the heavy traffic with the spectrum they have available to them.

Verizon Wireless has made a change to their billing structure to reflect this fact.  Dubbed "Share Everything" which took effect on June 28, current subscribers can opt for the old plan to be used primarily for cell phone usage, while the new plan caters to the online crowd, who can get unlimited cell phone minutes and text at a fixed price, but if they use their smartphone for anything else, like streaming or browsing, they will have to pay more as they consume data.

Current Verizon customers can choose between the new pricing structure, or they can keep their plans grandfathered with unlimited data but . . . they will have to purchase a new phone for full price, instead of a discounted phone.  For a family of four, upgrading those phones at full price could mean spending upwards of $500 for the new phones.

AT&T's CEO Randall Stephenson told The Wall Street Journal that they are looking at a similar billing plan change, because demand for mobile data continues to climb as smartphone and tablet adoption grows.  And if history is any indicator, we will not scale back internet usage, but will continue to use more and more data.

To put things into perspective, Karen Blumenthal, a writer at the Wall Street Journal discussed her family situation.  She and her husband have two kids, and they shared four phones and a family plan that included 700 talk minutes and limited texting for four cell phones.  Their kids' phones were $10 per month each.  Then, she, her husband and kids switched to smartphones, each paying $30 for unlimited data.  Their monthly bill has climbed to $240 (which doesn't include the hefty taxes and surcharges that are also tacked on - realistically, they are paying $300 a month).

But under Verizon's new plan, the telephone plan would increase to $40 for a smartphone and $30 for a basic phone, getting unlimited minutes and texts.  They could add a tablet for $10 a month, and a laptop for $20 a month.  The family uses between 2 to 3 GBs per month, which would run about $70 to $80 dollars if you aren't a heavy user.  Streaming itself would chomp through that amount of data within a few days. 

Blumenthal says that under the new plan the total bill would essentially be the same for them because they aren't heavy internet users.  But for people who use a lot data, the cost of mobile connectedness could quickly add up.  It's likely that people will begin relying more heavily on available WiFi hotspots or home plans when using their mobile devices to conserve their data.  Check out our article on how to manage data plans for some helpful tips.

But for families who don't currently have a family plan, getting one now will cost a lot more.  New customers can expect to pay $30 a month just for basic phone for their child, compared to the grandfathered $10 per month under the old pricing structure.  So getting into a cellular plan will now be a pricier endeavor.

Source:  http://online.wsj.com/article/SB10001424052702304458604577491020353205362.html