A smartphone's price is a double-edged sword. Not only are you paying for the device, but you are going to lock yourself into a contract with a mobile carrier for at least a year, probably two. Here's what you need to know about carriers before buying a smartphone. (Part 3 of a 6-part series.)
Devices & Coverage
Picking a carrier is about knowing what devices are available on its network and how good its data connectivity is in your area. You may have seen commercials for the HTC One X and think that is the smartphone you want. Yet, the One X is only available on AT&T. HTC makes a comparable product for Sprint called the EVO 4G LTE but you will not find anything from HTC’s “One” series on Verizon. On the other hand, Samsung will roll out a derivation of almost all its top-end smartphones to all four major U.S. carriers, with slight differences in each.
The best smartphones go to Verizon and AT&T first, since they have the biggest consumer bases of the four major U.S. carriers. Sprint and T-Mobile usually offer deals on lower-end smartphones from manufacturers that do not place smartphones with AT&T and Verizon (for instance, Kyrocera and Sprint).
See also: How Much Should You Pay? and The Myth Of The Perfect Device
Of course, the best device in the world will not function without a network. If you like a particular carrier's phones and plans but that carrier has terrible service in your area, you will be frustrated in the long run. So it pays to research the quality of each carrier’s network in your area. This can be as simple as talking to friends that have a phone on that network, and talking to representatives at the carrier's local retail stores about plans to build the network in your area.
Total Cost Of Ownership
The cost of the device is just part of the smartphone buyer’s equation. The other is what is known in the industry as TCO: Total Cost of Ownership. One way or another, you are going to pay for a mobile plan from one the carriers.
Picking a carrier is as important as picking a smartphone because the decision will affect how much money you spend for months and years to come. For example, a new smartphone on AT&T on a two-year contract with 3GB of data and 450 voice minutes costs $69.99 a month. That amounts to $1,679.76 over 24 months, before taxes and fees. Plans from Sprint, Verizon and T-Mobile are in that range as well.
The goal is to match a device that has the features you want with the type of service you need so as to achieve the most efficient TCO. Some people find that their best avenue is to go with the biggest carriers. Others find value at the lower end of the market.
The Carriers Compared
Each of the four big U.S. carriers has unique ways to pull new customers into the fold. For instance, AT&T and Verizon boast the largest and most reliable U.S. networks and a growing base of state-of-the-art LTE connectivity. (On the other hand, Ma Bell and Big Red will squeeze consumers that use a lot of data by throttling, or decreasing the speed of their data connection, after 3GB a month or by charging expensive overages.) Meanwhile, Sprint and T-Mobile try to lure consumers with attractive data plans - free unlimited data, no throttling - and cheap or free devices.
Here are some baseline features that each carrier offers to entice new customers and keep existing ones.
- Claim: The nation’s largest 4G LTE network.
- Reality: Verizon does have the most widespread LTE network in the U.S.
- Harsh Reality: Verizon’s smartphones tend to cost more than other carriers'. Its network is also split between CDMA and LTE standards and will not allow for simultaneous voice and data on most smartphones, including the iPhone 5.
- Baseline Smartphone Plan: The “Share Everything” plan is standard. If you are looking for one smartphone without sharing data between devices or family members, it will cost $100 per month for unlimited voice and text with 2GB of data. Upgrade to 4GB of data for $110 per month. If you want to share data with a tablet, it will cost an additional $10, $40 for an extra smartphone line.
- Claim: The nation’s fastest 4G network.
- Reality: In many areas, AT&T’s LTE is indeed faster than Verizon’s. Its fallback network, based on HSPA+, is also faster than Verizon’s fallback CDMA network.
- Harsh Reality: AT&T does not have the widespread LTE coverage that Verizon has. AT&T also calls its HSPA+ network “4G” when it is technically advanced 3G. The carrier also has trouble in many areas switching between its LTE and 3G networks (a concept known as displacement). Verizon does this much better.
- Baseline Smartphone Plan: 450 minutes of voice ($39.99 per month), 3GB tiered data ($30 per month).
- Claim: The nation’s best unlimited smartphone plan.
- Reality: Indeed, Sprint’s smartphone plan is as unlimited as it gets among the major U.S. carriers, as it does not throttle data speeds after a certain amount of usage.
- Harsh Reality: Sprint’s data network is in flux as it transitions from its old WiMax standard to the industry norm, LTE. Its LTE network is fairly small in comparison with those of AT&T and Verizon.
- Baseline Smartphone Plan: Sprint is the odd network that still bases its plans on voice minutes. Its baseline plan is 450 minutes for $79.99 per month with unlimited messaging and data. Be careful, though: Sprint has the biggest overage charges of any U.S. carrier.
- Claim: Nationwide unlimited 4G smartphone plans.
- Reality: T-Mobile’s network does not have true 4G nor does it have the capability to meaningfully add 4G in the future. Its “4G” network is actually HSPA+, like AT&T’s but without AT&T's LTE extension.
- Harsh Reality: T-Mobile’s plans are neither the cheapest, fastest or all that unlimited. T-Mobile’s current policy is to throttle users after 5 GB of data per month, though just about everything else is unlimited, including voice and text. The average smartphone user will not get anywhere near 5GB of data use a month with its $89.99/month plan (2 GB with its $79.99/month plan), but T-Mobie has said that its “unlimited” plan will only throttle the top 1% of users on a case-by-case basis. T-Mobile is also falling behind on network infrastructure without a tangible plan for LTE. T-Mobile also does not carry the iPhone.
- Baseline Smartphone Plan: Unlimited voice and text with 2GB data per month before throttling ($79.99).
Part 1: The Myth Of The Perfect Device
Part 2: How Much Should You Pay?
Part 3: Which Carrier Should You Choose?
Part 4: What Do Hardware Specs Mean?
Part 6: What Apps Do You Need?