Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.
TEXT OF STORY
Tess Vigeland: Big news for all you folks who wouldn’t put down your cell phones even if a rogue satellite was about to fall on your head.
This week, three major carriers announced an all-you-can-talk calling plan: $99.99 a month for unlimited gabbing. Verizon, T-Mobile and AT&T are offering the service. Sprint’s been testing a similar plan.
If you’ve ever used more than your monthly allotted minutes, you know how those extra charges can add up, but there’s another thing you can do with your phone that’s getting people into money trouble these days.
Marketplace’s Lisa Napoli says if you’re all thumbs, you better watch the meter.
Lisa Napoli: Doug Patterson studies the family cell phone bills carefully. He says it took a while for his daughter to catch on to text messaging.
Doug Patterson: We started off at the beginning of 2006 with her doing eight text messages in the month of January.
These days, she sends well over 2,000 every month.
Patterson: Yeah, and all times of day and night. Even in an hour of TV with all the family there, she can do five or six messages.
Anyone who gives their kid a phone has probably had a freak out moment when the bill comes with pages of extra charges that could cover the cost of braces.
Enter: Flat rate messaging plans. If you carry a cell phone without one these days, you do so at your own peril.
Industry Analyst Glenn Fleishman says even though the cost of technology usually goes down the more people use it, as we’ve gotten more addicted to texting, text message rates have been climbing:
Glenn Fleishman: Very gradually over the past four or five years they’ve shifted the price up so 15 cents is completely typical, and now it’s going to be 20 cents with AT&T if you’re not a subscriber with a plan.
And that’s the point. Carriers are raising the per-message cost to entice you to sign up for one of those plans. You can get one for as little as five bucks a month, but generally that pays for only a few hundred messages. That’s not gonna cut it if you’ve got a thumb-happy person in the house.
But be prepared. A flat-rate all-you-can text family plan will slap an extra $15 more to your monthly phone bill.
Though some of us are resigned to these expenses, lately, there have been rumblings on some blogs about the high price of text messaging. Especially, because the service costs the mobile carriers virtually nothing.
Ian Gillot: There is a cost in terms of you know the server and the hardware and the software in terms of the network, and the phone, no, it’s built in.
That’s Ian Gillot. He studies the mobile phone industry for a living. He says cell carriers want you to love text messaging cause it’s like training wheels for other things you can do with your phone that make the carriers even more money:
Gillot: You start thinking about buying ring tones and then you buy games and then you use the Internet because you’re using the keyboard or the phone for things other than voice.
A buck or two here for a special ringtone for your boyfriend, one for your best friend, then for the new boyfriend, then your new best friend… Four, five, six bucks for the latest game… Googling whatever.
Now, you could ask the carrier to turn off these services, but that’s almost more complicated than figuring out which plan to buy.
You could also cap costs by opting for a pre-paid phone or you can appease the texting teenager in your life by buying one of those devices that only let you text and instant message.
Ralph Herreida makes one of them. It’s called a Zip-it. He think he’s got a good deal:
Ralph Herreida: A $5 a month plan for three thousand messages…
Thing is, the Zip-it will cost you $149 and you need to be near a Wi-Fi hotspot for it to work.
And industry analyst Ian Gillott says that’s not the only downside.
Gillott: The problem is the kids want the full phone.
No matter how you cut it modern communications comes with a price that keeps rising.
In Los Angeles, I’m Lisa Napoli for Marketplace Money.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.