Why Your Phone Bill Will Skyrocket
The rise of smartphones came with an increase in monthly bills, and that trend isn’t going to change in the future.
It’s the natural state of all services and products: as they continue to improve, the vendor increases the price. The same is true for the wireless market, but in this case, that service is a necessity for most people, giving them no choice but to pay the difference when carriers raise prices.
Unfortunately, a few factors are coming into play all at once that may cause wireless prices to balloon more than usual in the near future. You think your bill is high now? Just wait for the future.
The Voice Conundrum
Carriers are exploring new strategies to continue to charge a premium for voice plans, according to the Wall Street Journal. Customers are now using their smartphones far more often to text, search the Web and download apps than they are to actually make phone calls. As a result, users are downgrading their voice packages, from expensive plans with heavy minutes and unlimited nights and weekends to bare-bones options.
It’s smart for consumers, but carriers are not making enough money on data plans to cover the difference, since wireless providers still bank on voice plans to make up most of their revenue. To solve this issue, carriers are strongly considering offering voice plans in one flavor, according to the Journal: an unlimited option with a big price tag that customers will be forced to pay if they want to use their smartphone to make phone calls.
The Faster Data Gets, the More You Use
The widespread rollout of 4G LTE across all the major carriers in the U.S. already started with Verizon and AT&T, and by next year Sprint and T-Mobile hope to catch up. LTE promises broadband-like speeds, which means practically no wait time in between switching Web pages and faster downloads of data heavy attachments and mobile apps. It all sounds glorious, just like sitting at home with a laptop, except without the promise of no overage charges.
Faster speeds make smartphones more capable than even before. Suddenly, when a user has a few minutes of down time, instead of just being able to check a few Web pages, LTE allows them to stream video and download a new app. These short sessions of increased use will add up to increased data usage, and many customers will likely find themselves upgrading to more expensive packages and not simply adjusting their new habits.
Verizon and AT&T are Set to Rule
Let’s face it: although Sprint and T-Mobile do present some competition for Verizon and AT&T, they both lag far behind the two superpowers in the U.S. wireless market. Verizon and AT&T are blazing ahead of the competition in the deployment of their LTE networks, they have large customer bases that allow them to recruit the best possible handsets and their actual service is simply superior in most parts of the country.
Because Verizon and AT&T have no significant competition beyond each other, all it takes is for one company to make a bold move for the other to follow. For example, when AT&T ditched unlimited data plans and raised prices, Verizon did the same less than a year later. This will continue to happen as long they do not have a fear of losing out on a significant amount of customers to another carrier.
If Verizon chooses to be the first to offer unlimited voice plans only — our first reason phone bills will continue to increase — AT&T is almost certain to do the same if it sees it has the same benefits.
The result? No matter where you go, you’re guaranteed a big monthly cell phone bill.