The 8 Most Confusing Things About Phone Plans Right Now

While more choice can yield better savings, buying a new smartphone and wireless plan has never been more confusing. Here are a few hurdles you should look out for.
Confusing Carriers

Buying a new phone used to be easy. You paid your carrier $199 for a new smartphone, agreed to a 2-year contract, and were on your merry way. Today, however, buying a new mobile device and wireless plan is a nightmare.

Carriers are moving away from the old subsidized model, in the hopes that consumers are willing to pay full price for their smartphones in exchange for slightly cheaper data plans. Moreover, some carriers now offer leasing options, and with manufacturers like Apple and Google entering the picture, consumers are faced with dozens of choices.

The good news is, if you can navigate this maze, you might actually get a plan that's cheaper in the long run than your old subsidized one. But, in many ways, it's incredibly confusing to make sense of it all. Below are a few smartphone-buying pitfalls to watch out for.

Plans Aren't Transparent

Cell phone plans were never designed to be consumer-friendly, but these days, they're less transparent than ever. From the industry's ever-changing definition of "unlimited" to the most recent installment/leasing options, if it looks too good to be true, read the fine print. Many unlimited plans involve throttling once you hit a data cap and many promotional prices are subject to change at the carrier's discretion.

There Are Too Many Leasing Options

The smartphone industry wants you to upgrade your smartphone every year, and mobile carriers are trying to ensure that this happens. From Sprint to AT&T, carriers are now encouraging their customers to "lease" their smartphones, rather than buy them. For the consumer, that means you get a new smartphone every year. For the carriers, that means you're constantly paying for a phone that will technically never be yours to keep and resell. Moreover, with so many leasing options, it's almost impossible to tell the plans apart.

Cost of Data is in Flux

There was a time when customers primarily paid for voice and text messaging. These days, carriers are practically giving that out for free. The cost of data, however, is in flux. While it's true that some carriers like Verizon have tried to make their data plans more transparent, there is still no one-size-fits-all model when it comes to data. And very few carriers let you pay just for the data that you use. Even grandfathered customers are seeing price increases on their unlimited data plans. That means chances are you'll overpay for data regardless of which plan you choose.

SEE ALSO: Maybe It's Time to Say Goodbye to Verizon's Unlimited Data Plan

Manufacturers Now Offer Their Own Purchase Plans

Choices are good for the consumer, but too many choices can complicate matters. Earlier in the year Google launched Project Fi, a mobile virtual network operator (MVNO) that uses cell phone towers from Sprint and T-Mobile in conjunction with WiFi to provide seamless tower-to-WiFi phone coverage. The plan is perhaps the most transparent mobile plan on the market, but for now it only works on select Nexus devices. Google also just announced its own warranty plan called Nexus Protect, which could make some users second-guess their current warranty plan.

Moreover, last month Apple announced it would offer an iPhone finance plan for customers who prefer to lease their iPhone direct from Apple. Although the plan includes AppleCare, it's one of the more expensive offerings on the market. Unlike the Google example, this is solely for purchasing your phone, and does not include wireless service.

You Can Still Buy Subsidized and Unsubsidized Phone Plans

Although the industry is making a transition toward unsubsidized plans, certain carriers like AT&T and Verizon will still let customers purchase 2-year subsidized phone plans. For Verizon, you'll need to be grandfathered into your subsidized plan, meaning new customers can only purchase unsubsidized phones. AT&T, however, lets both new and old customers purchase subsidized phones. The catch is you must make your purchase at a brick-and-mortar AT&T store or direct via AT&T's website. You can no longer purchase subsidized AT&T phones via third-party merchants like Best Buy or Apple.

Unlocked Smartphones Don't Always Work With Every Carrier

Although pricier than their contract-ridden alternatives, unlocked smartphones have typically been preferred by most users because the latter handhelds give you the freedom to switch carriers whenever you want.

The average consumer might not know all of the bands that their iPhone 6s supports, and wrongly think an unlocked iPhone can work on any network.

However, as PC Mag notes, owning an unlocked phone doesn't always mean you can switch to whatever carrier you desire. Unlocked phones typically work only on GSM networks (AT&T and T-Mobile). While there are some models that will work on all of our main networks, finding these specific SKUs can be tricky since they're typically only sold via the manufacturer's website. As a result, the average consumer might not know all of the bands that their latest iPhone 6s supports, and wrongly think an unlocked iPhone can work on any network.

Roaming Fees Are Still an Issue

Using your smartphone outside of the United States can create a nightmare scenario for your wallet. That's because many carriers still charge steep roaming fees for the privilege of making calls or using your data plan while abroad. Verizon, for instance, offers a dizzying amount of travel plans, and carriers like Verizon and T-Mobile even offer special plans for cruise ships where, depending on your cruise liner, data can cost upwards of $15/MB. Google's Project Fi is hoping to kill roaming once and for all, but we've still got a long way to go before we can get there.

Verizon is Already Pushing 5G

Would you pay a premium for a new 5G smartphone knowing that coverage is still low? Verizon is hoping you will. The carrier recently announced that it would start field-testing its 5G network next year, which according to Verizon is 30 to 50 times faster than its current 4G network.

However, as rival AT&T points out, the industry has yet to agree on standards for 5G networks, which makes any preliminary talk about 5G nothing but talk.

Despite the migraine-inducing confusion, today's smartphone plans do have a massive advantage over the previous years' plans, and that's diversity. Consumers now have a wide range of phones and packages to choose from, and although the package that's best for you may not always be apparent, it's better than having little-to-no options whatsoever.

Readers, do you have more confusing phone industry quirks to add to our list? Share your thoughts in the comments below!

Louis Ramirez
Contributing Writer

With over a decade of experience covering technology, Louis Ramirez has written for CNET, Laptop, Gizmodo, and various other publications. Follow him on Twitter at @louisramirez.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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Louis Ramirez (DealNews)
@jcauthorn -- It's easy to get unlimited voice/text these days because carriers have realized the majority of people are using data more so than voice minutes. (Remember back in the day when voice minutes were so hard to come by?) So they're basically giving away "unlimited voice/text" just to retain current customers and catch potential customers' attention. (Who doesn't like unlimited?)

AT&T is also trying to play nice since it's currently under the eye of the FTC and FCC for allegedly misleading consumers with promises of "unlimited" data. They recently stated they would throttle their "unlimited" customers once they hit 22GB (before the FTC/FCC lawsuits were filed -- AT&T was throttling "unlimited" customers after hitting 5GB). It'll be interesting to see how this all plays out.
FYI - good article, especially in the midst of so much change in how all this stuff is changing to a new and different model!
@louisramirez - I'd really like to hear your take on this interesting turn of events:
VZW announced an INCREASE of $20/month for their grandfathered "unlimited" data plan users (I'm not sure how they can do that - doesn't that change their contract or something? Where's the FTC?)
AT&T ~last week changed their old voice/text/data plans -- My Nation 450 (450 mins, no text or extra $$$ for each text) to an *unlimited voice and text plan - The text message announcing it and the AT&T rep confirmed it's for "Customer Appreciation". Because I'm grandfathered into the *Unlimited data I'm effectively now getting unlimited everything for the price I was paying (~$67 month after 19% corporate discount). I'm hoping AT&T doesn't try to pull of a VZW deal.
Got any insight or feedback?
My pet peeve is how good the family deals are, while those of us who only need one phone are expected to pay through the nose. As a result, I shifted to prepaid years ago.
Louis Ramirez (DealNews)
@LordEnder -- Unlocked phones have been popular within the tech community for years. They've recently gained popularity with consumers as shoppers have started realizing that they're cheaper (in the long run) than contract-ridden phones. A Gartner study is cited below. You're right in that they don't dominate the market, but more people are becoming aware of them.
I am 'very cell phone' savvy, & after lots of research, & owning a GSM phone, switched from a year on T-Mobile Simple choice Family, to a Cricket package, (AT&T) with 8MByte LTE speeds, which is fine for streaming just about anything! I went from $98 a month & 1Gbyte for each phone, to $70 a month, NO taxes, & 2.5Gbyte per phone, now! Very happy on Cricket, NO complaints. Now... I did something even better for 1 mo taking a vacation Sept 10th thru October 1, traveling 1st on a cruise ship from Boston throughout Nova Scotia, Ca, then Quebec, Montreal, and training it to Toronto, then Niagara Falls, from Florida. Researched options & T-Mobile had just come out with Mexico, US, and Canada plan, UNL Talk, Text & 3Gb Data, "BOTH WAYS" ! I went in, bought a $60 'Prepaid' SIM card, for the month of Sept, & had ALL service the whole trip, even on the ship, as we were close to Canada's Cell carriers. Wife had email, too on my phone. Switched back to Cricket SIM when we returned !

How do you define 'most users'? Any source material?

When I read this line; "Although pricier than their contract-ridden alternatives, unlocked smartphones have typically been preferred by most users because the latter handhelds give you the freedom to switch carriers whenever you want.", I cannot help but think that 'most users' (read: U.S. people) haven't the slightest clue that 'unlocked smartphones' even exist, let alone how to define what that means.

This makes me think of poorly stated polling questions that attempt to drive a certain response from those asked - do you want a stupid, crappy phone that can only work on one network or an awesome, smart phone that can be used on multiple networks? Hmm...lemmie think.

The concept of having a phone that runs on multiple networks may be 'preferable', but that doesn't mean it's been 'preferred' when people actually got their phones.

My 2 cents.
Well Said & analyzed Louis, they want to keep the consumers in the dark for their business to continue!!!
Louis Ramirez (DealNews)
@Combatmage -- Yes, hopefully that's the silver lining to it all. But so far it's been hard predicting how this will impact smartphone deals. For example, iPhone 6s deals have been very scarce so far (whereas last year iPhone 6 deals were easier to find at this time).

@justrick -- Hey! Thanks, Rick! Hope things are well in your neck of the woods!
Very well written!
Great stuff, Louis.
Great article! Hopfully all the competition will mean better deals for consumers.