How much thought did you give to choosing your cellphone provider? I’ll bet not much, but the fine-grained details can end up biting you, if you’re not careful.
To that end, Flowing Data, the excellent info-graphics blog, created a chart showing the rates and termination fees charged by the four major carriers. Below is just a snippet of the full graph, which you can see here.
There’s a couple salient points to make about the graph: For one, it’s actually far more useful to consider a number that’s not on the charts, but is implied by them: The cost differential over the life of the contract. For example, paying $20 more a month for Verizon’s data and text might not sound like much, but for a two year contract, that difference will eventually total $480. Not so cheap anymore, huh? (If you wanted to kick this data up a notch in usefulness, you could actually create a decision matrix, which showed the cost differential implied by choosing one carrier over another.)
Which brings us to another point, not considered in the graphs: Service quality. Obviously, that’s far too complex and qualitative to be captured in a graph, but it seems to me that buyers should always remember that boasts of “the most reliable network” don’t actually come to much. After all, unless you’re an airline pilot or an investment banker, how much are you traveling around? I’ll bet people overrate the quality of the national network, and underrate the quality of local service (and similarity thereof) when shopping for a plan.
Lastly, one interesting thing that’s implied by the graphs is the actual state of each of these companies. Sprint has been having tremendous problems holding onto customers —it makes sense that they would try to position themselves as a low-cost provider. But basic cell-phone plans are by now about as cheap as they can possibly get, and so you don’t see it’s cost cutting until you start adding services.
Meanwhile, you’ll see that Verizon demands a premium for what’s probably the most advanced network in the country. (Again, is it really worth it?) AT&T and T-Mobile, by contrast, are stuck somewhere in the middle, charging middle prices. And that competitive position is often the most precarious one to be in, as business-school case studies prove time and time again. Looking back, it makes sense that Apple eventually struck a deal with AT&T: Afterall, that second-place market position offered Apple negotiating leverage, but the relative strength of the business offered them stability.
[Via Flowing Data, which has the complete chart, including termination fees]