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Consumer News

Are You Smarter Than Your Cell Phone Plan? Cost Of Data Usage Creates Shift In Household Budgets

Posted: 2/14/2013

Thanks to a new type of mobile phone system that relies on what’s been described as “hybrid calling,” consumers can take advantage of Wi-Fi technology
Thanks to a new type of mobile phone system that relies on what’s been described as “hybrid calling,” consumers can take advantage of Wi-Fi technology.

(NAPSI)—Does your cell phone bill seem like it is consuming more and more of your budget? If so, you are not alone. Today’s average U.S. families, according to the U.S. Department of Labor, are spending over 261 percent more on cell phone bills than they would have 10 years ago. They’re bypassing things like weekend outings, clothing purchases and dinners out in favor of game downloads, watching TV and surfing the Internet on their smartphones.

With the average per-user cell phone bill starting at $65 per month, consumers are becoming increasingly dissatisfied with cell phone companies that have consistently increased the cost of data service—and the definition of what constitutes “unlimited” seems to be different depending on the carrier.

Cell phone companies have been able to continuously increase data fees because consumers are becoming increasingly dependent on their smartphones for Internet access, GPS functionality, work e-mail and entertainment, which make it seem that giving up any functionality is a major lifestyle sacrifice.

According to Pew Research, nearly half of all U.S. cell phone owners carry a smartphone, a shift that has unsettled household budgets across the country. Even in the midst of this country’s recession, we’ve seen increases in cell phone spending year over year. According to the Department of Labor, the average household’s annual spending on telephone services rose to $1,226 in 2011 from $1,110 in 2007, when Apple Inc.’s iPhone first hit the market.

To try to avoid hefty overage fees, consumers are spending even more on their data plans and using it as insurance against a “surprise” monthly bill. But those plans often come with a huge price tag, leaving some consumers searching for a different type of cell phone service.

A new mobile option from Republic Wireless just might be the answer. It threatens to shift the entire dynamic of mobile communications, using Wi-Fi hotspots as the primary method of smartphone functionality.

Using a Motorola Defy XT smartphone, Republic Wireless provides nationwide voice and data service for just $19 per month plus the one-time cost of the phone. Republic Wireless does not charge overages, regardless of how much you use the phone. Since the device runs primarily on Wi-Fi and roams on the Sprint network when Wi-Fi is not available, Republic Wireless can offer all the functionality of the smartest smartphone at a price that’s much more affordable.

When the CEO of Republic Wireless, David Morken, was asked about how he got the idea for Republic Wireless, Morken chuckled and said, “We have six children. Each was promised a smartphone if he or she brought home straight A’s. It didn’t take long for our cellular bill to become one of the largest monthly expenditures behind our mortgage.”

Morken said Republic Wireless is driven to challenge the status quo. “We believe anyone who wants a smartphone should be able to get one. Many people, such as those who are working from home, have and are paying for Wi-Fi coverage already, so why not put it to good use? College students are another great example—most colleges are Wi-Fi enabled—and we know that age group comprises heavy data users. Bottom line: At $19 a month, no contracts, no gimmicks, we are offering smartphones with a smarter phone plan.”

One thing is certain: Consumer demand for smartphones will continue to rise. Finding alternatives to traditional cellular/data plans can mean big savings for consumers—and perhaps bring a welcome sense of balance to the family checkbook.

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