A new consumer guide released by Ill.-based utility watchdog Citizens Utility Board (CUB) says Verizon Wireless’ move to kill unlimited data plans exposes a major problem in the wireless industry: Nine out of 10 smartphone users could be burning hundreds of dollars a year on data they never use.
“CUB’s Guide to Cell Phone Data Plans” notes that 70 percent of nearly 19,000 bills analyzed by CUB during the past three years “were bloated by an average of $331 in wasted minutes, texts, megabytes and useless services.”
Verizon is the most recent major carrier to stop selling unlimited data plans. AT&T and T-Mobile also don’t offer unlimited plans, leaving Sprint as the only major company to do so. CUB says Verizon’s new smartphone offerings — $30 to $80 a month for two gigabytes or more of data — reveal an industry-wide gap.
“Despite the stereotype of smartphone users chained to their iPhone, Android or BlackBerry, most customers don’t use nearly enough data to justify the large plans carriers offer,” CUB says.
"Wireless carriers are forcing everyone to shop at what amounts to the cellphone industry’s big-and-tall store," says CUB Executive Director David Kolata. "Unfortunately, the suit doesn’t fit, and customers are pouring hundreds of dollars a year into bulky data plans that aren’t tailored to their needs." ??CUB’s analysis of more than 11,000 Verizon bills shows:
>> Smartphone owners used an average of 456 megabytes (MB) of data a month — less than a quarter of the 2 GB included in most plans. Considering the $30 monthly price tag for Verizon’s lowest plan, CUB estimates customers could be paying as much as $23.16 per month, or $278 a year, for data that never gets used.
>> More than 96 percent of smartphone customers in the sample consumed less than 2 GB of data per month — the lowest usage plan Verizon offers for smart phones.
“Wasted gigabytes are causing our bills to skyrocket," Kolata adds. "It’s time for the cellphone industry to match the way customers use their phones.” As such CUB suggests three reforms:
>> Lower-tiered data plans: A 500 MB or 1 GB plan would fit the needs of most data users. ?
>> Family shared data plans: CUB’s findings show that 2 GB of data per month would be more than enough for four typical smartphone users on the same plan.
>> Roll over unused data: Consumers paying for data should have every opportunity to use it or they should be able to cash in unused megabytes for reward points and billing discounts.