Why Are Phone Plans So Expensive?

These days, it seems like everything is more expensive than it needs to be. The cost of your phone plan completely depends on who your provider is, and the major carriers have certainly made it expensive to have a working cell phone lately. 

How can they justify prices so steep? Is there a less expensive alternative? These are great questions; in fact, they’re some of the questions we asked ourselves when we created Red Pocket Mobile. 

Like any good question, the answer isn’t that simple. However, we can walk you through it. 

What Are the Major Carriers Using All My Money for Anyway?

In terms of business operations costs, the major carriers have quite a lot of overhead. There are three major cellular networks in America: GSMA, GSMT, or CDMA, which are run by AT&T, Verizon, and T-Mobile, respectively. These companies are responsible for the maintenance and expansion of those networks, not to mention the recent swath of 5G upgrades, and all of that network service comes with a big price tag. 

We would be remiss to omit the fact that these enormous companies have simply reported record profits in the past year alone. Verizon’s revenue from September 30, 2021, to September 30, 2022, was $135.651B, which is roughly four billion dollars more than its 2019 revenue. AT&T’s net income from September 30, 2021, to September 30, 2022, was $19.836B, a 2001.27% increase year-over-year. 

Isn’t There an Alternative to Traditional Cell Phone Plans?

Never sign a cell phone contract again. The worst performer in terms of value per dollar spent is consistently contract-based payment plans from major carriers. Conversely, no contract plans, especially monthly plans, were rated the best value. Even though prepaid plans don’t commonly entail 50+% off discounts on new devices, customers save so much after even just the first two years that it more than covers the cost of a full-price, brand-new, up-to-date device. 

You may have noticed that providers like AT&T and Verizon do indeed offer month-to-month plans, but they charge exorbitantly high rates for these as a deterrent. They don’t want customers purchasing these plans because they require an unlocked phone, and they know that with an unlocked phone there is nothing binding you to their services, so you could walk away at any time. They want their customers to commit to 2+ year-long contracts because that is what their business model is based on. 

What Are the Factors That Increase the Cost of My Phone Plan?

There are two primary factors that impact the cost of your phone plan. These two factors are the provider you choose and the amount of data you pay for. Notice that we said the amount that you pay for, not the amount that you use. If you purchase a 100GB plan but only use 50GB, you’re still paying full price for that 100GB plan. That’s why it’s so incredibly important to look at your data use over time before selecting a plan. 

We’ve already talked a lot about how choosing the right provider will drive down the cost of your plan. Alternative carriers, like Red Pocket, don’t have the same overhead costs as the major carriers, which helps us keep our prices lower for our customers. Major carriers are responsible for building, expanding, and maintaining the cellular networks that all providers use, and those funds need to come from somewhere.

Branding also plays a huge role here. Think of the major carriers like the designer sweater of mobile phone service. Alternative carriers are like the store brand sweater. Save the logo, the sweaters look the exact same because they are; they were likely even made in the same factory. They’ll both keep you warm, and you won’t be able to tell the difference while you’re wearing them. Alternative carriers use the same network equipment to get you the same service. All that really changes is the brand name (and the price, of course).

Another thing that might be driving up the cost of your plan with your current provider is an unnecessary and excessive feature bundle you didn’t ask for. Many providers are offering streaming packages with their services, but with a cheaper plan, you could purchase the Hulu subscription and then still have funds left over.

What Are Some Ways I Can Reduce the Cost of My Plan? 

Remember, data usage is one of the primary factors in driving up your bill. You can cut down on data usage by spending more time connected to wifi. If you can reduce the amount of time you spend using cellular data in favor of more time spent on wifi, you can reduce your data needs and therefore reduce the amount you need to spend on data. As a bonus, it’s also safer for your data to connect to the internet using wifi at your home or at work.

Be prepared for time away from wifi by downloading your music and shows to your device while you’re still on your wifi. When you do need to use data away from wifi, always stream your videos in standard definition instead of high definition. Don’t forget to close out of your internet-enabled apps when you’re not using them so they’re not using data in the background. 

Beyond reducing the amount of data you use, you need to shop for a new plan from a new company. If you’re ready to make the switch to a modern phone company, we’re ready to help you. 

Where Can I Get a Less Expensive Phone Plan?

More expensive certainly does not mean better quality. Check out affordable annual and monthly cell phone plans at Red Pocket.

At Red Pocket, you can get an annual prepaid phone plan for as low as $15 per month for 3GB. That adds up to just $180 per year. Our annual plans come in many different sizes to suit every need and budget. Need the maximum data? Get 100GB a month for just $37/month for a full year. 

We also offer extremely affordable monthly plans. Check out our Unlimited Everything plans. Right now, from November 10th, 2022 to November 28th, 2022, take advantage of our Black Friday deals and get any of our four plans for an introductory rate of just $10! This offer is good for new customers only. You can get up to 100GB of data per month through our monthly plans, on top of unlimited talk and text. 

You can save even more by using a family plan. You can get Unlimited Everything, including international call and text, plus 10GB high-speed data for just $20 per month per line for each line after the first. Our family plans can be built around your needs.’

All Red Pocket plans are compatible with the three major US networks: GSMA, GSMT, and CDMA, which are owned and operated by AT&T, T-Mobile, and Verizon. No matter which plans you choose, you’ll be able to stay on or join the network that provides the best coverage in your area. In most parts of the US, that’s GSMA, or AT&T’s network. 

5G Networks

As these networks expand to include more 5G coverage, our plans expand so that you can stay connected to the fastest speeds available through 5G. As long as you have a 5 G-enabled device, you’ll be able to utilize this new iteration of cellular technology as soon as it’s available in your area whenever you’d like. 

If you have questions about what 5G is and how it’s different from 4G LTE, you’re not alone. For the time being, while 5G is still in its up-and-coming stage, you can confidently switch off 5G when you don’t need a speed boost, as it’s been known to quickly drain a phone’s battery. But no worries; when 5G is ready for everyone to jump on board, doing so will be as easy as flipping a switch. 

Phone Plans Don’t Need To Be So Expensive

Just because we begrudgingly expect our phone bills to be high, it doesn’t mean that’s the way it has to be. It’s nearly impossible to engage with today’s world without a cell phone and internet access, so having a phone plan is not exactly optional anymore. You’re used to having a fast internet connection everywhere you go thanks to nationwide cellular networks. 

It’s good to expect the constant connection that modern technology allows, but we could really do without the expectation that you have to pay an arm and a leg for it. Let Red Pocket defy your expectations with our affordable rates for the same coverage you’ve come to rely on. 


Verizon Revenue 2010-2022 | VZ | MacroTrends

AT&T Net Income 2010-2022 | T | MacroTrends

Cell Phone Plans: 2-Year Contract vs. Payment Plan vs. Pay As You Go | Time

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