Cellphone Economics Revisited: Two Years In

I have now saved myself a full cellphone contract. Two years ago, I devised a plan to save myself a ton of money by overhauling my cellphone service plan. Last year, I reflected on how much I had accomplished and discussed some potential tweaks to my system. To recap, two years ago, I was paying $576 per year for a no-frills, mediocre phone plan with no included text messages. Last year at this time, I had reduced that amount to less than $190. This year, I have continued to cut my usage, and I am happy to announce that I only paid about $130 for my cell service. This includes 1000 prepaid T-Mobile minutes (purchased last April for $100+tax) and $26.55 for a 1-year Skype subscription. Over the last two years, I have saved $832 compared to keeping my traditional cellphone plan. I’d just like to take an opportunity to pat myself on the back. It wasn’t always easy, and I did occasionally use Sadie’s phone on the weekends, but otherwise this plan was a fantastic idea. A lot has changed over the past year and more change is coming in the future, so all of this could potentially affect what will happen to my plan in the upcoming year.

I’ll be the first to admit that as I looked back through my records I was surprised to find that I had not bought any minutes for my prepaid T-Mobile plan since last April. I just ran low enough at the end of March 2011 to finally buy some more. As I mentioned above, a few things have changed for me this year. First, Sadie and I got an apartment together in Chicago. I no longer make hour-long nightly phone calls to her. Although I previously used Skype to make these calls, there were always occasions where we would have longer conversations on the phone when using a computer wasn’t practical, such as while I was driving.


CC-BY-SA by echiner

A few things changed technologically as well. Not only is it now possible to use Google Voice with a free VOIP client, but Google has integrated free voice VOIP calls into GMail and the Google Voice Web app. Since I commented last year on the quality of Skype calls, I’ll comment on Google Voice VOIP calls today. They are not as clean as Skype, but they are improving. The call quality sometimes degrades, randomly cuts out, or even drops. This is especially true if I’m doing anything else using the network, including browsing the web while talking on the phone. I rarely experienced these problems with Skype VOIP calls. Overall, the call quality seems to have improved over the past few months, but it is still much more temperamental than with Skype calls. However, what it loses in quality, it makes up for in convenience. I almost always have a GMail tab open, which means that incoming calls now ring my computer and outgoing calls are just a click away. Plus, Google Contacts makes it easy to store and dial multiple numbers for all of my email contacts. This makes the Google Voice interface quite a bit more usable than Skype’s client. Google Voice also offers free text messaging, and messages are delivered to your GMail account just like a traditional email. Since my Skype subscription is lapsing in a few weeks, I find myself asking, “should I renew my Skype subscription or just stick with Google Voice?” I am leaning towards sticking with Google Voice because I can get incoming VOIP calls through GMail, Google Contacts’ phone number organization, and it’s free. Over the past 6 months I can probably count on my fingers how many calls I’ve made using Skype, so it seems silly to continue paying for it. On the other hand, it’s quite inexpensive, and it’s a good backup to have if my Google Voice call quality is poor.


I will also be starting my residency training at the Medical College of Wisconsin in Milwaukee in a few weeks. Sadie and I will be moving in June. This throws a number of new variables into my (currently very efficient and cheap) plan. I don’t think my current minute usage will change much. I make calls to my family and Sadie using a mixture of Google Voice when it’s convenient and my cell when it’s not. I am unsure how much residency will eat into my minutes though. While I’m at the hospital for longer hours without frequent access to GMail for checking text messages or listening to voice mails, this will undoubtedly result in more calls on my cell and thus more minutes used. That’s not a bad thing; it’s just a fact.

There’s another interesting twist in all of this. According to our Program Director, anesthesiology residents at MCW get a free iPod Touch. The department started posting podcasts through iTunes U to facilitate quick reviews of common anesthesia topics between surgical cases, and the iPod Touch is their nice gift to allow everyone to access the podcasts. No one mentioned if we will be receiving these this summer or if we will have to wait to get them until next summer when we start our official anesthesiology training. Since the new iPod Touch can be paired with a Bluetooth headset and its Google Voice and Skype apps work over WiFi, this could work as a convenient make-shift phone at the hospital and at home.


CC-BY-ND by samantha celera

And then there’s the elephant in the room. Starting in July, I’m no longer going to be a poor medical student. Technically, I’ll be a poor Resident Physician, but at least I’ll have this thing called income. I keep wondering whether it’s time I break down and get an Android smartphone. (At the time of writing, it would most likely be a Nexus S.) Part of me says I should, but I still have some reservations. My biggest concerns are monthly price and value. Currently, I’m spending about $10 per month on cellphone service. Can I really increase that 7-fold? More importantly, will I derive enough value from a smart phone to justify the increased expense? At this point, it’s not really about the money. It’s about feeling that I’m not getting ripped off by my wireless provider. I’m not going to use many minutes, and I’m not going to use much web data since I’ll almost always have Wifi around. Ever since T-Mobile dropped their Even More Plus plan, I feel like wireless companies no longer care about what their customers want. I want to buy an unlocked, full-price phone and get a cheaper monthly bill with no contract. I want plans that have less than than 450 minutes and are priced accordingly. I really want a data-only plan with the option of adding on talk time. Instead, wireless providers are generally trying to keep you locked into an over-priced smartphone contract with a required, bundled data plan (usually $25-30/month). This results in people paying for a lot of stuff that they don’t use.

Then, I see people like Dave Pell and David Siegel who point out that too much Internet connectivity can disconnect you from real life. I have enough trouble with controlling my Internet time on a laptop, so what’s going to happen when my Internet is with me 24/7? So here I sit with my old cellphone. I’ve had my Sony Ericsson W810i for 4.5 years. The battery still lasts 4 days on a charge. After paying my dues to Cingular and AT&T for 2 years, my subsidized phone is unlocked and transferable to any GSM carrier by switching out a $5 SIM card. I can place calls, text, listen to music, and connect to my laptop via Bluetooth.

I guess I have some decisions to make. After reading I Will Teach You To Be Rich, I’ve been doing a lot of thinking about conscious spending. In the book and on his website, the author discourages people from passing judgement on others for their spending habits. When budgeting, after “paying yourself” by contributing to savings, he encourages consciously spending money on things that you value and mercilessly cutting spending on things you don’t. The goal is attainable because it doesn’t require people to consistently tell themselves “no” and it encourages them to understand what makes them happy and to do it as much as their budget allows. Now, I just have to decide whether a smart phone brings enough value for me to consciously spend my soon-to-be, hard-earned money on it.

6 thoughts on “Cellphone Economics Revisited: Two Years In

  1. You missed out on getting grandfathered in on Virgin Mobile’s $25/month, unlimited data, unlimited text, 300 minute plan, but that same package is now still only $35. Pair that with the GrooVe IP Android app (a Google Voice client), and you’ve got free VoIP calling on your unlimited data phone and no contract. Virgin’s even got some decent Android phones now, like the Optimus V and the Triumph.

  2. Pingback: Gmail’de Sesli Arama Özelliği Başladı | Hakkı Konu Blog

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