Wireless telephone service expenses include monthly recurring charges and the initial start-up costs. Start-up costs may include the cost of a new phone, the first month’s access, and a one-time enrollment fee. Access is charged one month in advance, so this is always paid at the time of activation. Enrollment fees are designed to cover the carrier’s initial administrative expenses. But in today’s competitive marketplace, customers should insist that carriers waive this expense.
In the best-case scenario, the customer gets a free phone, pays no enrollment fee, and only pays for the first month’s access. Prepaid cellular, on the other hand, normally has a high initial cost and the user must purchase a phone. Prepaid cellular does not include a monthly bill, however.
Free wireless phones
Carriers will normally give the phone for free if the user signs a term agreement. New customers should always ask the carrier for a free phone. The carrier will require at least a 12-month term agreement, which is negligible because most people will use the phone for at least 12 months. This is a win-win situation because the user gets a free phone, and the carrier can count on 12 months of revenue from the customer.
Besides term agreements, new users can cut their start-up costs by purchasing a phone apart from their carrier. Phones can be purchased over the Internet or at electronics shops, and, in many cases, a second-hand phone may be sufficient. In a corporate setting, employees regularly relocate or resign but company-owned cell phones are rarely recycled. A company can save $250 by recycling a phone instead of purchasing a new one for each new employee. Prior to purchasing the phone, be sure your carrier will program your phone and allow it to be used on its network.
Monthly billing for wireless telephone service
The typical cellular phone bill contains three charges:
Access: A monthly recurring fee the user pays to use, or “access,” the carrier’s wireless network. Access is charged one month in advance.
Airtime: Charges for the calls made over the past month. Airtime is billed after the calls are made.
Taxes and Fees: Fees charged in advance for extra features, such as caller ID and voice mail.
A user who receives the bill on May 1 might be billed $35 for access in the month of May and $50 airtime for calls made in April. To use the carrier’s network, you must pay for access in advance. Once you have made the calls, you are billed for the usage.
When users cancel wireless service, they are issued a small refund. Since they have paid for future access, but will not use it, the carrier refunds the money.
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