Mobile Rate plans - Promotions

Wireless carriers regularly set aside funds to offer promotional deals to their customers. Promotions are designed to drum up new business for the carrier and are only for new customers, not existing customers. (Loyalty is rarely rewarded in the telecommunications industry.) If a new customer activates a phone with the carrier, she qualifies for the promotion. Promotions may include the following offers:

Free night and weekend calling for a year;

A free phone;

A free battery;

Free merchandise or gift certificates;

Extra airtime minutes each month.

Promotions are usually advertised on the Internet, on radio, and in newspapers, but you can normally find the latest promotions by calling customer service. If you are an existing customer, you can still request the promotion. Corporate accounts rarely qualify for consumer promotions, but the corporate account executive may be able to pull some strings because the purpose is to retain the corporate account and develop more business from it. Many account executives are skilled in securing preferential treatment for their corporate customers.

Upgrading from analog to digital
In the early days of wireless phones, everyone used analog phones. In the late 1990s, customers began migrating to digital wireless service. Around 2000, the number of digital users equaled the number of analog users, with about 45 million of each type. The two main reasons for this trend are that digital service is higher quality and is more affordable. When digital service was first made available to the public, carriers offered very attractive pricing. The carriers had invested in building their digital networks and were eager to build their customer base.

The downside of switching from analog to digital is that you must buy a new digital phone, your coverage area may be different, and you may have to get a new phone number.

For some wireless users, digital service is not the best option. Carriers offering analog service are still hungry for business and still offer competitive pricing. Of course, the rate plans vary from market to market, but especially in smaller, nonurban areas, analog service rate plans are usually the best. In these smaller markets, digital wireless service only has limited coverage, so a customer’s analog phone might be more useful.

Mobile Rate plans - Why is it so hard to change rate plans?

Why is it so hard to change rate plans?
Analysts and marketers design rate plans, which are then passed on to customer service and the billing department. By the time consumers become aware of the latest rate plans, the analysts are already drafting even newer plans. Consequently, customer service representatives often have outdated information about their own rate plans.

The primary job of a customer service representative is to keep busy talking to customers on the phone, rather than to study the employer’s latest service offering. Customers can often get rate plans on the Internet days before customer service representatives are even aware of the new plans. Sometimes, representatives offer a rate plan that they cannot implement because the plan is either too new and not yet available or too old and no longer offered.

When they try to enter the change, their computer rejects it because the plan is not available. Instead, they arbitrarily choose a different rate plan for you. Consider yourself lucky if they call you back to tell you what happened. Otherwise, you will just have to see it on your next invoice—if you examine it.

Changing the rate plan on a cell phone seems like an easy task, but many things can go wrong. Human error or computer error can ruin the change. A simple typographical error will cause the wrong rate plan to be implemented and can cost you hundreds of dollars. What is intended to save a little money each month may actually raise your cost and waste a lot of your time.

How to ensure you have the best rate plan
I have used the following steps to reduce wireless phone bills hundreds of times for businesses throughout North America.

Get your historic average. Look at your last 3 to 6 months’ phone bills and determine your average amount of usage each month. Write down the amount of home airtime, roaming, and long distance. If your bills are unavailable, your carrier can provide this information.

Learn the newest rate plans. Consult the Internet or your customer service representative to learn the new rate plans. Sometimes, your actual cell phone bill may have a notice that lists some of the new plans. You may also see them advertised in your newspaper. It is also possible to compare rate plans side-by-side on the Internet (see Figure 1).

Figure 1: Side-by-side rate plan comparison on the Internet.

Do the math. The customer service representative will recommend the rate plan that is the most cost effective for you. His computers will do the calculations automatically. Always double-check the math, however, because the representative may have done the analysis on his own. Sometimes representatives accidentally recommend the wrong plan.

Change the rate plan. Ask the representative to change your account to the new plan. Make note of the representative’s name and phone number. If the order fails to process, you are more likely to get a refund credit if you can prove that you did actually speak to a company employee. Have the representative fax or e-mail written confirmation to you that the order has been completed.

Confirm the change. After 2 to 3 days, call the carrier and ask for confirmation that your account has been changed to the new rate plan. Try to speak with a new representative who will objectively review your account. Avoid telling the company what plan should be in place; instead, have the representative first tell you what rate plan is in place. This is the most effective way to confirm the change.

Mobile Rate plans - Individual rate plans

Individual rate plans make up about 75% of all wireless telephone rate plans. These plans are tiered according to the number of airtime minutes included in the plan. Carriers normally require a term agreement with these rate plans, but during the term, they allow the user to upgrade or downgrade their plan to the next higher or lower plan.

Downgrading Rate Plans
For example, a traveling businesswoman chose a high-level rate plan and signed a 12-month term agreement with PCS PrimeCo. After 5 months, she decided to drop down to the next lower-level plan because she was not using all of the free airtime minutes. The carrier agreed to downgrade the calling plan, but required a new 12-month term agreement to start immediately. An additional 12 months were not added to her original 12-month term. Her total time commitment ended up being 17 months, not 24 months. Table 1 shows the impact of downgrading a rate plan. The calculations are based on the sample phone bill in Figure 1.

Table 1: Downgrading a Rate Plan Can Save Money

Upgrading rate plans
In the previous example, the customer chose a rate plan that was inappropriate for her call volume. She selected too large a plan and ended up wasting money. The opposite scenario is just as common. Many wireless customers select a rate plan that is too small. They use all the free airtime minutes early in the billing cycle and then rack up airtime charges for the additional minutes. Upgrading to a higher plan will inevitably cut their cost.

One of the most common scenarios I have seen deals with office workers who go out as field representatives for their company. One such office worker never used more than his allotted 150 minutes each month. But once he became a field sales manager, his usage increased to 600 minutes each month. After his first month in the field, he upgraded to a higher rate plan. Table 2 illustrates the change.

Table 2: Upgrading Wireless Rate Plans

Select a carrier that automatically changes your rate plans
The above examples represent the majority of wireless phone users who never seem to get their phones on the most cost-effective rate plans. One month their usage is up, the next month it is down. To avoid overpaying, they must vigilantly audit their bills each month. Today, some carriers automatically adjust a customer’s rate plan to the most costeffective rate plan each month. Their billing system selects the most cost-effective rate plan before printing the bill each month.

Last-minute rate-plan changes
Some carriers allow “last-minute” rate-plan changes. Here’s an example of how this works.

A small construction company has 10 mobile phones. The billing cycle ends on the 20th of each month. The office manager calls the carrier on the 18th or 19th and finds out how many minutes of airtime each phone had used. If a particular phone has used too much or too little airtime, she has the carrier change the rate plan. When the bill cuts the next day, the 20th, the new rate plan is in force, even though the calls were already made. This is possible because the billing system and the system that tracks airtime are independent of each other.

The prorated wireless telephone bill
When a rate plan is changed in the middle of the bill cycle, the next phone bill is a confusing mess. The bill reflects two minibilling cycles that are each half a month long. The first half of the bill shows a refund of unused access. The second part of the bill shows charges for half a month’s access, and then another full month’s access at the new rate.

Some carriers still do manual data entry, and they may neglect to give you the refund for the partial month. After a brief explanation, you should be able to negotiate this credit.