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Ask Maggie: Help! These data plans are too confusing

This week's Ask Maggie offers advice on choosing a cell phone data plan and advises another reader not to ditch a home broadband connection for 3G wireless service.

As wireless operators eliminate unlimited data plans and talk about "throttling" traffic, smartphone subscribers are left wondering what to do.

It's clear that the majority of smartphone customers don't need an unlimited data plan anyway. But some carriers offer data-lite options, while others don't. Also what's the deal with prepaid carriers? In this week's Ask Maggie, I help one reader figure out which smartphone data plan is best for her.

I also offer some guidance on ditching a home broadband connection for 3G wireless service from Sprint. And I explain to another reader why she can't subscribe to a data-only service for her smartphone.

Ask Maggie is a weekly advice column that answers readers' wireless and broadband questions. If you've got a question, please send me an e-mail at maggie dot reardon at cbs dot com. And please put "Ask Maggie" in the subject header.

Help! Which data plan is right for me?

Dear Maggie,
I am new to the whole smartphone thing. And I'm trying to determine which data plan to sign-up for. I will be using my new smartphone for e-mails and general Internet browsing. Also, I'd like to use it for GPS while traveling in a motor home. I would only stream movies or videos if I'm in a Wi-Fi hotspot. Any recommendations?


Dear Helen,
You're question brings up an important issue in the great debate over mobile data plans. Since the vast majority of smartphone users don't need unlimited data, how much do you really need? And what are the best options for getting the most out of a data plan?

Before you get started, figure out which carrier offers the best network coverage in your area. AT&T and Verizon Wireless are generally available in more regions of the country than any other wireless operator. Even though T-Mobile USA and Sprint Nextel are considered nationwide carriers, their coverage can be spotty, especially in rural areas. The same goes for prepaid providers, such as Leap Wireless and MetroPCS.

After you know who offers coverage in your area, you can start thinking about which plan is the best fit for you.

The first thing you have to do is to guesstimate how much data you think you'll use. Two gigabytes of data per month seems to be the magic cut-off for most carriers. The vast majority of customers--98 percent, according to AT&T--use less than this each month. Average smartphone subscribers are using roughly, 400 MB of data per month, according to Validas, which recently analyzed a year of consumer phone bills from all four major carriers.

A couple of carriers, AT&T and T-Mobile, offer 200MB plans for low-data consumption. The lowest tier of service that Verizon Wireless offers is 2GB. And Sprint only offers an unlimited data plan for its smartphone customers.

But as you can see these plans aren't tailored precisely for average usage. So most smartphone subscribers will need more than the 200MB plan but less than 2GB.

If you're willing to be frugal in your data usage and only do data intensive activities while in Wi-Fi hotspots and/or use apps to compress your data, then you may be to get away with less than 200MB a month. But if you don't want to worry about how much data you're using, a 2GB plan has essentially replaced the unlimited plan for average users, and it shouldn't be a problem for you. Remember that average users only consume about 20 percent of the available bandwidth in a 2GB plan. Considering that you plan to use your smartphone for checking email and occasional GPS services, I think a 2GB plan would offer plenty of data for you.

All the major carriers offer tools on their Websites to help you estimate your usage. So I suggest checking that out to get a sense of what you think your usage will be. Here's a little guide put together by Verizon Wireless that should give you an idea of how much data certain activities eat up:

  • Email (text only) = 10KB
  • Typical Web Page Lookup* = 1.5MB
  • Audio Streaming = 40MB/hr
  • Lo-Res Video Streaming = 200MB/hr
  • Hi-Res Video Streaming = 400MB/hr
  • Digital Photo download/upload (Hi-Res) = 1MB

The next thing to consider is price. T-Mobile's 200MB tier is $10 a month. The good thing about its service is that if you go over your limit, it only slows your service. This means you aren't socked with additional overage fees. AT&T's 200MB service is $15 a month. But if you exceed this limit, your service isn't slowed or "throttled." Instead, you're charged more money for more usage.

If you think you'll need more than 200MB of data per month, here's a look at what the major operators offer in terms of service:

  • AT&T: 2GB for $25 per month
  • Verizon Wireless: 2G for $30 a month
  • Sprint Nextel: Unilmited for $30 a month (Sprint's data pricing is bundled into its all-you-can-eat bundles so this is roughly the cost.)
  • T-Mobile USA: 2G for $20
  • *Keep in mind that each of these carriers also require a voice plan with the data service. And text messaging is also extra.

If you're looking for the best value, prepaid operators such as MetroPCS, Leap Wireless, and Virgin Mobile offer smartphones and data plans even cheaper than the big guys. The cheapest offering from MetroPCS is $40 a month for unlimited calling, texting, and 100 MB of data. For $60 a month, you can get unlimited data with your unlimited calling and texting.

Virgin Mobile also offers some good deals. Even though it now says it will cap its unlimited plan at 2.5GB per month, it's still a great bargain for most smartphone customers. Its 300-minute plan, which includes unlimited messaging and data, costs $35. Its 1,200-minute plan is $45, and the unlimited voice plan with the data is $55 a month. And like T-Mobile, Virgin Mobile won't charge overage fees if you exceed the 2.5GB cap. Instead it will slow your service.

If you're going the prepaid route, I'd probably consider T-Mobile (which also offers pay-as-you-go and prepaid along with contracts) and Virgin Mobile over MetroPCS and Leap Wireless. There are two reasons for this. For one, Virgin Mobile and T-Mobile each have larger networks and cover more territory than either MetroPCS or Leap Wireless. T-Mobile is, of course, one of the four major nationwide carriers. And Virgin Mobile is a subsidiary of Sprint Nextel, another national carrier, and it uses Sprint's 3G network.

The second thing is that Virgin Mobile and T-Mobile offer faster speeds. MetroPCS may claim to have 4G service, but it's actually no faster than 3G, and where it doesn't offer 4G, its technology is actually operating at 2G levels.

I hope this was helpful. And good luck!

Ditch home broadband for 3G service?

Dear Maggie,
I am thinking of eliminating my home Internet connection and getting a Sprint smartphone to use as a Wi-Fi hotspot. Is it feasible to think I will still be able to play online multiplayer games using my xBox? And will 3G be enough, or will I need 4G, which is still in the process of being set up in my area?

Thanks so much for your help,
Jill S.

Dear Jill S.,
I know it's tempting to ditch the home broadband connection for 3G or even 4G wireless service, but don't do it.

Here's why: The 3G service that Sprint offers is fine for when you are out and about. It will let you download your e-mail without too many hiccups. And you'll be able to stream music from services like Pandora. You may even be able to watch some videos without much trouble. But on a day-to-day basis, if that's your only Internet connection, it's probably not enough.

Believe me, I have considered this very same option myself. I'm single and live alone in NYC. I have lots of connected devices, a Roku box, tablet, two laptops, and a couple of smartphones. I use the Internet constantly.

But it's rare that all my devices are accessing a broadband connection at once. And the most data intensive thing I do is watch Netflix through my Roku box. But even my sporadic Net usage is probably too much to ask of a 3G wireless connection. And I'm almost positive it will be too much for multiplayer gaming, especially since network speed and low-latency are crucial to game play.

Remember that the Sprint 3G connection on average is delivering about 500 kilobits per second and 1.2 megabits per second. The best you'll likely get out of the service is 1.5Mbps. Even most DSL services are delivering faster speeds than that.

The 4G service will be better. It can deliver average speeds between 3Mbps to 6Mbps. But again, I caution you. Sprint is currently using Clearwire's 4G WiMax network to deliver the service. I've heard a lot of complaints from Clearwire and Sprint customers who say that the service is spotty at best. One of the problems is that in-home coverage is difficult given the frequencies used to deliver the service. The spectrum that's being used is at the higher range, which means it doesn't penetrate walls well.

So my recommendation to you is to keep your home broadband connection. If you're looking to save some money, call your broadband provider and tell them you're considering canceling for a cheaper deal elsewhere. Maybe that will be enough to get you a better deal on service for awhile.

Can I go data-only on my smartphone?

Hi Maggie,
I am trying to decide I want to subscribe to only a data plan, and no voice or text service, on my smartphone. From some research I've done, it seems possible. I would probably just get a pay-as-you-go voice plan for when I really need to call someone.

However, I have to ask. If I want to only have a data plan, will it work better on an iPhone or an Android? And if I want only a data plan, should I get the AT&T 250MB data or the 2GB data plan?


Dear Francesca,
Unfortunately, I have some bad news for you. You cannot get a data plan for your smartphone without also subscribing to a voice plan. (Although I think your idea of getting only data and then using a pay-as-you-go service for voice, does sound great!)

I think what has confused you is that mobile carriers list "data plan" or "mobile broadband" as a separate service on their Web sites. Sadly, these terms are misleading. These separate data services are for laptops and tablets. They are not for smartphones.

For example, the 250MB plan you cite from AT&T is for tablets like the iPad. And it costs $15 a month. If you wanted the iPhone, you have the option of a 200MB plan for $15 a month, but you must also subscribe to a voice plan, which will cost you a minimum of $40 a month.

Carriers force you to subscribe to voice service too, because it's easy money. They've already sunk the cost into their networks to build the voice services. So even though the cost of voice is decreasing, it's almost all profit for them to deliver that service, especially if you're not using it that much.

The same thing has happened in these companies' traditional phone businesses. For years, AT&T and Verizon would not sell customers DSL service without a traditional home phone service. They claimed there was a technical reason for this, but in fact it was because they didn't want to lose the revenue from the traditional phone business. Eventually, the courts forced them to sell "skinny DSL." And today the phone companies are required to sell you a standalone DSL service. (Of course, they jack up the price, so it's not a huge cost savings to skip the phone service.)

Forrester Research analyst Charlie Golvin said he thinks this is the next big bone of contention that consumers will pick with their service providers.

"I think a lot of consumers are fine with paying $25 for 2GB of data, even if they don't use all that capacity," he said. "But I think they're not OK with paying $40 on voice, when they probably use less than half of those minutes."

Anyway, sorry to break the bad news to you. And good luck!