Data Plan Changes Could Lead To Bigger Smartphone Bills
BOSTON (CBS) - There is almost nothing you can't do with a smartphone. We're not just talking about staying connected at work or shopping while you're in the waiting room at the doctor's office. These days you can set your DVR so you don't miss the Celtics playoff game, turn up the air conditioning in the living room and pinpoint the exact location of your dog who busted through his electric fence for the third time in a week.
Smartphones are getting smarter and they're also getting more expensive. "I'm starting to use a lot more data than I used to," one man told us in Boston. That man, and thousands like him, are what the industry calls 'data hogs' and they are going to start seeing higher bills as the industry starts moving away from unlimited data plans.
Most carriers have already pulled the plug on unlimited data for new customers. Now, Verizon says it will start to phase out unlimited plans for existing customers. Essentially, anyone who upgrades to a 4G phone will have to go with a new data plan.
A mobile industry expert with the Yankee Group, Carl Howe says part of the problem is carriers need to recoup the cost of developing that 4G network. The other issue is that most people who want a smartphone already have one. "So if a company like Verizon or AT&T wants to grow, there are two ways they can do it. They can steal customers from another carrier or they can raise prices," he explained.
An analysis by Consumer Reports found many customers are actually paying for more data than they actually need. That means if you are browsing the web or reading your email, you probably won't pay under the new plans. However, if you stream a lot of video, you could be in trouble. "The ones who will really have a problem at the end of the month are those who say, 'oh that's a really great episode on TV', and they'll go watch it on the bus," Howe said.
Right now, Sprint is the only carrier still offering unlimited data to all its customers, but even that is not a guarantee. "Sprint has said they are wondering how long they can keep up unlimited," Howe said.
It's not all bad news. Many of the carriers plan to offer shared plans for families which can work well if you have kids who use a lot of data and parents who use much less.
