Your Cell Phone Plan Probably Costs You $3 Per Minute

Cell customers only use 33 percent of available minutes, study finds

By Scott Gordon
|  Tuesday, Mar 10, 2009  |  Updated 7:29 AM PDT
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Your Cell Phone Plan Probably Costs You $3 Per Minute

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A new study shows the average cell phone customer pays $3.02 per minute.

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Your Cell Phone Plan Probably Costs You $3 Per Minute

Cell phone customers use only 33 percent of their monthly minutes, a study finds.
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Cell phone customers use only 33 percent of their monthly minutes and pay an average of $3 per minute, according to a study by a consumer advocacy group.

"In many ways, it blew me away; surprising, very surprising," said Michael Shames, director of Utility Consumers' Action Network in San Diego.

The study examined the bills of more than 700 cell phone customers in San Diego, but Shames said the results would be true nationwide.

The study found the average customer made 193 minutes of calls per month.

Researchers used a simple formula. They divided the total bills by the number of minutes used.

Only 25 percent of customers pay under 10 cents per minute, Shames said. Some 41 percent pay more than 50 cents per minute, and 11 percent pay more than $10 per minute.

The average is $3.02, according to the study.

Shames faults the way cell phone companies encourage customers to buy more minutes than they need to avoid paying higher charges per minute for overages.

"The way the plans are designed, it’s almost as if you’re gambling in Las Vegas," Shames said. "You know the odds are against you, and the house always wins."

Cell phones companies didn't dispute the study’s conclusions, but responded that they encourage customers to change plans to one that best suits their cell phone usage.

Shames said many customers would benefit from a pre-paid cell phone plan that charges only for the minutes used.

"The pre-paid plans are a lot more attractive," he said.

The consumer group suggested cell phone companies be required to reveal on bills the actual cost per minute so customers are better informed.

"They’re basing their business model on customers' not using services for which they’ve paid," Shames said. "You make money when your customer is ignorant."

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