Are you concerned about the monthly cost of your mobile plan? You're not alone: A recent report indicates that 86% of Americans are worried they're paying too much for their wireless plan—and they probably are.
WhistleOut, which makes a phone-plan search tool, surveyed 1,000 American adults who pay a phone bill. The results provide some insights into phone-plan overspending and offers a possible solution: switching to a mobile virtual network operator (MVNO).
Most Americans pay an average of $160 a month for their wireless plans, or about $2,000 per year. And with prices rising by an average of 4% annually, Americans could be seeing costs reaching $2,100 in less than two years, WhistleOut says.
Nearly two-thirds (56%) of respondents use one of the three major providers—T-Mobile, AT&T, or Verizon. They often sell "unlimited data" plans to customers who primarily use their home Wi-Fi, so customers are paying an extra $50 per month or $600 per year for unused data. Only 13% use their plan's data at home, and 18% say they need to learn how to check their data usage.
When customers opt for an unlimited plan, they often perceive it as a beneficial arrangement. But according to Statista, the price per gigabyte has fallen 40% to $2.75 from $4.64 in 2018. And as that cost decreases, carriers incur higher expenses per plan. To compensate for this, carriers present unlimited plans at elevated prices, capitalizing on the fact that most customers don't closely monitor their data consumption.
Nearly half of those surveyed (49%) say they would switch phone carriers if their bill increased by 15%. As mentioned earlier, one viable coverage option might be switching to an MVNO provider—such as Cricket, Boost, or Mint Mobile—whose customers pay an average of only $50 per month for service—more than 68% lower then bills from the big-three competitors. MVNOs offer lower bills by purchasing minutes, texts, and data from the major carriers at wholesale prices instead of building their own network towers and infrastructure, and then passing the savings along to their customers.
That isn't to say that MVNOs are for everyone. The top concern cited, by 24% of those surveyed, was slow network speeds. As most of these companies are smaller in operation and scale, and spend less on advertising, consumers are wary of providers (such as Mint) that are online-only, with no retail locations customers can visit in person. But 60% of millennials surveyed by WhistleOut prefer doing their phone-plan shopping online—so MVNOs might soon be grabbing a larger piece of the phone-carrier pie.