Lesson Two: Wireless Phone Plans © 2006 Consumer Jungle

Intro to Understanding Plans Activation Fees: a one-time fee to customers to start a Wireless phone plan. Home Calling Area: is the geographic service area provided by the carrier. Roaming: Occurs when you make and receive calls using another carrier's Wireless phone towers. Long Distance: A call made to someone outside of your home calling area. Activation Fees: a one-time fee to customers to start a Wireless phone plan. The activation fee is sometimes waved during a promotion. Home Calling Area: is the geographic service area provided by the carrier. Roaming: Occurs when you make and receive calls using another carrier's cell phone towers. Some carriers charge for roaming. Long Distance: A call made to someone outside of your home calling area. Nationwide plans have a home calling area that cover the entire U.S, and long-distance calls would only apply to international phone calls. © 2006 Consumer Jungle

Plan Pricing Carriers create plans based on combination of: Peak Minutes Off-Peak Minutes Start & stop times vary by carrier. Mobile-to-Mobile and In-Network Minutes Average person uses cell phone 2x per day Peak Time: The period of heaviest traffic on the network. Carriers’ Wireless phone plans are distinguished by how many peak minutes are included with the flat monthly rate. Peak calling time is usually defined as Monday through Friday, early morning until around 9 p.m. The actual window varies from carrier to carrier. Off-Peak Time: The period of time during which carriers offer discounted airtime charges. Most Wireless phone plans include an unlimited or generous amount of off-peak talk time. Off-Peak time is usually on the weekend and after 9 p.m. during the week. Also known as Night & Weekend minutes. Mobile-to-Mobile Minutes / In-Network Minutes: Allows customers who use the same carrier to call each other without using peak time minutes. Average person uses cell phone 2x per day In this year’s survey, 80 percent of respondents said they used their cell phones at least twice a day during the past week, up from 69 percent last year. Source: Consumer Reports, “Best Cell Service: Exclusive Survey Results,” January 2006 © 2006 Consumer Jungle

How are minutes counted? Airtime minutes include: Outgoing calls Incoming calls Carriers round minutes up. When you talk one second over , the carrier rounds up to the next minute Minutes expire Rollover Minutes Airtime: Time period in which you are sending or receiving calls, usually rounded up to the nearest minute. Your monthly Airtime minutes include “Outgoing” and “Incoming” calls. These are simply all the calls you send and receive. Some carriers offer plans where all or some of the minutes of incoming calls are free to the customer. Rollover Minutes: Minutes leftover at the end of the monthly time period that rollover to the next month's airtime allotment. *Not all carriers offer free incoming calls or rollover minutes. * Know the rules for your plan, so you are not surprised. Source: FCC © 2006 Consumer Jungle

Family Plans Shared Minutes Low monthly fee for additional lines. Unlimited calling between callers on same plan. Each family member has a unique phone number. Family Plan / Shared Minutes: When two or more individuals have shared minutes under a single phone bill. You can add a second line onto an existing plan for as little as $10 per month, a fourth of the cost of an individual plan. Depending on your family’s situation, family plans can be a good deal. Examples of plan names are: Cingular Family Plans T-Mobile Family Talk Plans Sprint PCS Fair & Flexible Family Plans Verizon Family Share Plans © 2006 Consumer Jungle

Prepaid Service Plans You purchase the phone & the minutes Best for infrequent users & emergency-only users Pros: No monthly bill Pay for a fixed amount of refillable minutes. Don’t need a credit history. Cons: Higher cost per minute Minutes expire Prepaid Service Plans: Paying for Wireless phone minutes before you use them. Avoids exceeding your monthly peak minutes and paying overage charges. No contract required. Great for those who infrequently use a Wireless phone and only want to use it during an emergency. You buy the phone and “buckets” of minutes to go along with it. The cost is less than a basic monthly service plan over an annual period. A variation of the prepaid plan is a product from Firefly Mobile ,which uses Cingular’s network. The phone doesn’t have a traditional dial pad, but instead has buttons to call preprogrammed numbers like Mom, Dad, and 911. Pros: No monthly bill Pay for a fixed amount of refillable minutes. Don’t need a credit history. Cons: Higher cost per minute Minutes expire in as few as 30 days © 2006 Consumer Jungle

Plans for Kids 1/3 of 11- to 14-year-olds have their own cell phone Phones Simple, No keypad Speed dial buttons for parents, 911 Plans Prepaid Pay-as-you-go More than one-third of 11- to 14-year-olds have their own cell phones Kids need to be mature enough to use the phone responsibly. An alternative to a traditional phone is a cell phone designed especially for younger kids. These phones lack a keypad but have speed-dial buttons for parents and 911. Parents preset who their child can call and who can call in (kids scroll through names on a screen), and they control costs through prepaid, or pay-as-you-go, plans. One option is the Firefly, which is sold at www.fireflymobile.com, Target, Wal-Mart, Limited Too, and Toys “R” Us, and through Cingular and smaller carriers. LeapFrog TicTalk is another kids’ phone available at www.leapfrog.com. It comes with five educational games, and it lets children receive and reply to text messages from their parents. Cost. The Firefly and Leapfron sell for about $100, including a travel charger. Cingular and regional carriers have various contract-billing plans, which may offer a discount on the phone cost. But we recommend that you go with a prepaid plan. They are available directly from Firefly Mobile or participating retailers. The prepaid plans come with 30 minutes of airtime. You buy additional time from Firefly Mobile or Target in blocks of 25 cents a minute, which expire after 90 days. Don’t buy more than the child is likely to use. Other options. Consider a regular cell phone with prepaid minutes and without expensive features. Source: Consumer Reports, “Straight talk on cell phones for children,” February, 2006. © 2006 Consumer Jungle

Compare Unique Features Verizon National IN Calling T-Mobile 1,000 Anytime Minutes Sprint Fair & Flexible Cingular Rollover minutes In areas where carriers are closely matched in major respects, you may want to base your choice on factors specific to the carriers. Verizon – National IN Calling allows you to phone any other Verizon Wireless customer anytime, without using up minutes from your calling plan. T-Mobile – As of August 2006, for $49.99, subscribers receive 1,000 anytime minutes. Other carriers charge more. T-Mobile consistently offers the lowest-priced minutes. Sprint – Fair & Flexible adjusts the calling plan to allow for variation in minutes used, so you can avoid big unexpected charges. They will charge you batches $5 for every batch of 100 minutes over you plan. Sprint bought Nextel in December 2004 for $35 billion, and Nextel customers have the unique “walkie talkie” “push-to-talk” feature. Cingular – Rollover minutes allow you to carry over any unused minutes to the next month. Cingular is a joint venture between two traditional phone companies—Bell South and SBC. Cingular bought AT&T Wireless in February 2004 for $41 billion. AT&T announced an agreement to buy BellSouth for $67 billion in March of 2006. AT&T currently owns 60 percent of Cingular, the No. 1 wireless carrier, while BellSouth owns the remaining 40 percent. As part of the deal, AT&T would assume full control of Cingular. Check to see if other carriers are available in your area. © 2006 Consumer Jungle

Try Before You Buy How trial periods work Lasts 14 to 30 days You sign contract Try the carrier/phone Cancel contract without paying early termination fee Lasts 14 to 30 days Check coverage Home School Work As a consumer, you must take advantage of the trial period. During the trial period, use your phone everywhere you go to see if the coverage meets your expectations and the carrier’s advertised promise. Use the Trial Period The national carriers offer trial periods of 2 weeks to 1 month. This period allows consumers to test the service and cancel their agreement without incurring an early termination fee. You will be charged for the calls that you make during the trial period, possibly an activation fee for the phone, and any damage incurred to the wireless phone. © 2006 Consumer Jungle

Avoid Wireless-Service Gotchas Sign a 1-year contract Early Termination Fee Some retailers add their own Early Termination Fee Sign a 2-year contract only if renewing & happy with the plan. Read the fine print Don’t understand? ASK. Sign a 1-year contract Consumer Reports recommends signing a one-year contract, even if it means paying more for the phone. A shorter contract will give you a faster way out if service deteriorates. Early Termination Fee: A fee charged by the carrier when a customer ends a Wireless phone service contract early. An early-termination fee will typically range from $150 to $200. Some retailers add their own Early Termination Fee If you shop in a store or at a Web site run by a company other than the carrier, be extremely cautious. Consumer Reports found two agents on the Web that have their own $350 Early Termination Fee on top of the carrier’s $200 fee. 2-year only if renewing A two-year contract makes sense when you are renewing with a carrier that provides excellent service and you plan to maintain the same usage level and locations with your phone. Read the fine print Don’t understand? ASK. Read all of the terms and conditions before you sign up. If you don’t understand something, ask; if you don’t like one of the terms and the carrier won’t budge, consider another carrier. © 2006 Consumer Jungle

Free Wireless Phones Aren’t Free Carriers and authorized agents offer free phone as an incentive. But, the cost of service over 2 years is greater than the cost of the phone. Commission & early termination fee recoup the cost of the free phone for the carrier. “Free” Wireless phones aren’t exactly free: Authorized agents of carriers receive a commission for every plan that they activate. They give away the Wireless phone because they recoup their cost when the carrier pays them a commission. The amount you pay for the plan over two years is more than the cost of the phone. For example, if you pay $40 per month for 24 months, you will spend $960. This amount is more than the $200 - $300 phone that you get for free. Most often you pay for the phone first and then redeem a rebate for the price of the phone after you start your service. Carriers and authorized agents charge an early termination fee to recover the cost of the free phone. Consider buying a phone to avoid the *The key to a successful Wireless phone purchase is to find the PLAN that fits your needs best. Do not be enticed by advertisements for “free” Wireless phones. © 2006 Consumer Jungle

Free Wireless Phone Scams Online or e-mail spam offer Don't buy unless they: Are an authorized agent for a carrier. Use a secure server to process your credit card information. Free Wireless Phone Scams are common and millions of consumers have been taken advantage of with such an offer. Use the same good judgment when buying a Wireless phone online that you would use for any other online purchase, and only purchase from an Authorized Agent. Authorized Agent: A retailer that is authorized to sell phones and plans on behalf of the carrier. © 2006 Consumer Jungle

Authorized Agents Act as an agent for individual or multiple Wireless phone carriers. Offer good comparative information for the customer. Get paid by the carrier after they sign you up for a plan. Before you sign a contract, ask how much they will be compensated for your contract. © 2006 Consumer Jungle

Selecting a Plan Find a plan that matches your use by asking yourself: When will I make the most calls? How long will I talk? Where will I call to and from? Who will call me? Do I need to make long distance calls? *Teachers are encouraged to have students answer these questions independently or in a group discussion as preparation for upcoming activities. © 2006 Consumer Jungle