Which Data Plan Should I Get for My Smartphone? - NerdWallet

Which Data Plan Should I Get for My Smartphone?

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Which dataplan is right for my smartphone?

The landscape of mobile communication is changing. Again. Gone are the days of unlimited data usage on our smartphones. We now live in an age where all but one of the major U.S. carriers limit smartphone data usage. AT&T and Verizon charge for overages on your data plan, and T-Mobile slows your data speed down exponentially once you cross a predetermined data usage threshold. Only Sprint offers unlimited data plans to new subscribers.

If you are one of the lucky few who are grandfathered into their unlimited plans, then these changes do not affect you. If, however, you are not so lucky, these changes pose some important questions. How much data do you need? How much do you pay for that data?  And what data plan is right for you?

 How much data do I need?

According to the Nielsen Company, the average data usage per U.S. smartphone customer was 606.1MB (or 0.59GB) per month in the most recent period for which data measurements were available. Frequent web surfers will use about 30MB of data per day, equaling less than 1GB per month. Those who use their smartphones for heavy streaming (on Pandora, for example) find that they average less than 2GB of data usage per month.

This means that unless you are streaming around 10 YouTube videos per day, every day, your data usage will be much less than the average carrier’s monthly data plan.

How much does it cost?

Prices do vary, but essentially you end up paying about a penny per megabyte on most monthly data plans. AT&T charges $30 for 3GB and $50 for 5GB, while Verizon charges $30 for 2GB and $50 for 5GB. T-Mobile bundles its data with its voice packages, but data prices come out to roughly $30 for 2GB and $50 for 5GB.

Average Plan AT&T- 3GB Verizon- 2GB T-Mobile- 2GB Sprint- Unlimited
Cost $30.00 $30.00 $30.00 $40.00
Cost/MB $0.01 $0.015 $0.015 Unlimited
Cost/YouTube video streamed $.13 $0.22 $0.22 N/A

If you think that subscribing to a lower end data option will save you money, the following rates may give you pause. AT&T charges $20 for their 300MB option and T-Mobile charges $10 for their 200MB option. These plans come out to roughly 7 cents per megabyte and 5 cents per megabyte, respectively, versus the penny a megabyte rate for the higher end plans. Verizon does not offer a lower end data option.  So while the plan may be cheaper, you are paying a way steeper rate for the data you’re getting.

You could forgo these carriers’ options all together and go with the unlimited plan from Sprint, but you end up paying $40 (including a $10 surcharge) per month. This brings us to our next question.

 So, which data plan is the best deal?

Although 97% of U.S. smartphone customers used less than 2GB of data per month last quarter, take note that the current per-user monthly average increased 80% over the per-user monthly average a year earlier. This means that although it is possible to limit your data usage and stay within a carrier’s lower end option, the trend is that data usage is dramatically rising. Think about whether you are using  the web on your phone more now than you used to. If so, it might be unrealistic for you to stay within the lower end option.

Also take note that only the top 3% of smartphone users exceeded 2GB of data usage per month. This means that although it is possible to exceed a higher end data plan, it is unlikely.

If you think that a lower end data option makes financial sense for you, remember that you can face substantial fees for going over your data limit. If you’re trying to stay below a data threshold, try using mobile apps that track your data usage (such as DataMan, VoiceMan, and DroidStats).

All statistics aside, if you want to save money while consistently using your smartphone,  AT&T’s 3GB option or Verizon’s or T-Mobile’s 2GB option might be your best bet–they strike a good balance of maximum freedom with minimum financial hardships.


Smartphone image via Shutterstock

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  • Nate

    Good article Tarv, you bring up some good points. Although data usage is rising exponentially, is it really necessary to plan for how much data use you may use in a year or two? I think providers will increase data limits for the same price package as average usage goes up. Technology tends to get cheaper as time goes on. For example, a 16GB flash drive 5 years ago probably sold for 5 times the price it sells for now. The numbers are pretty similar across the board.

  • Branden

    $30.00 / 2GB (2048 MB) = $0.015, not $0.15

    ….typical SDSU education…

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