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The average cell phone bill in 2023 was $157 a month according to JD Power. That's a staggering cost of $1,884 per year!
By comparison, the average UK phone bill is just $32 per month. This means Americans are paying $125 a month, or $1,500 a year more for the same service!
So why are cell phone bills in the US so expensive? And what can you do to cut costs and save some money?
We'll answer these questions and provide numerous strategies to cut your monthly cell phone bill by more than 50%.
Why so high?
5 reasons for high cell phone bills
- Unlimited data plans - The average cellular data usage is only 5-10GB of data per month. Do you really need unlimited data?
- New smartphone upgrades - Bundling the cost of a new $1,000 phone over 2 years, adds $40 per month to your bill. Do you really need a new phone?
- Advertised pricing typically for 4 lines - Fewer lines cost considerably more. The advertised price is rarely what you pay.
- Hidden fees and taxes - Did you know that this equates to an extra $5 per month, per line on average?
- Lack of awareness of alternative options - MVNOs are low-cost carriers that are powered by one of the big 3 networks. Are you surprised to hear that there are over 50 low-cost carriers in the US?
The Problem
The big 3 favor shareholder happiness over customer value
- Unlimited plans are not unlimited - "Unlimited data" plans are almost always capped with data and speed limits. How can each network offer 3 types of "unlimited data" plans?
- Advertised pricing typically for 4 lines - Fewer lines cost considerably more. The advertised price is rarely what you pay.
- Continuous smartphone upgrade cycle - Customers are offered early upgrades to lock them into a continuous loop that means they never actually pay off their phone.
- Massive ad-spend and store/staff costs - This expenditure is passed straight onto their customers. Did you know that only about 25% of the price you pay, is actually for the cell phone service?
- Buying in-store - Speaking to a salesperson on commission and not being able to easily compare prices with their competitors is unlikely to lead to an informed decision. Empower yourself to choose the right plan, don't be sold the wrong one!
- Website Pricing is confusing - They seem to prefer their customers to have to go into a store, rather than making it easy to buy online.
- Questionable overcharges - All four major networks have either been accused of or outright caught implementing shady practices.
Plan comparison - US vs UK
Let's take a look at the most popular plans in the US compared to those available in the UK.
It's important to remember that the average data consumption of an unlimited data plan customer is only 3-5GB per month. This means that most people are paying for data they don't need, due to minimal plan choice and a lack of awareness about how much data they actually use.
As you can see there's a massive disparity in pricing between the big 3 in these countries:
US cell phone plans
| Network | Data | Price | Annual Cost |
| Verizon | Unlimited | $75/mo | $900 |
| AT&T | Unlimited | $75/mo | $900 |
| T-Mobile | Unlimited | $75/mo | $900 |
UK cell phone plans
| Network | Data | Price | Annual Cost |
| O2 | 50GB | $15/mo | $180 |
| Vodafone | 50GB | $12.50/mo | $150 |
| Three | 60GB | $12.50/mo | $150 |
New smartphone costs
In addition to selling unlimited data plans that most people don't need, the big 3 love locking their customers into an endless smartphone upgrade cycle.
The typical cost of a new high-end smartphone is now over $1,000, and while interest-free financing is attractive, with payments split over 2 years, that's adding another $40 a month per device to your monthly phone bill.
Considering there are so few major improvements to the new phone models these days, it's important to ask yourself - do you really need a new phone?
Remember, keeping your devices after the repayments are complete, means significantly cheaper phone bills.
Unlimited data plan + new phone = bad deal
Ultimately, bundling an unlimited data plan with a new smartphone every 18 months is great for the networks but represents terrible value to the consumer.
So now we understand the reasons behind the high phone bills, is there anything that you can actually do about it?
The good news is that there is and it's easy to save lots of money, without compromising on anything.
The solution
MVNOs offer cheap customized plans with no compromises
MVNOs - or Mobile Virtual Network Operators - are the perfect solution for consumers looking for reliable, budget-friendly cell phone plans.
What are MVNOs?
MVNOs are lesser-known wireless carriers that lease extra space on the big three major networks - AT&T, T-Mobile, and Verizon- and sell service to you at a discount.
You've probably already heard of at least a few MVNOs, like Boost Mobile and Cricket Wireless but now there's a new generation of online-only MVNOs, such as Mint Mobile, US Mobile and, Tello, that will save you even more.
These MVNOs can offer cheaper plans because they don't have excessive overheads as the big guys.
Considering, that they're all powered by at least one of the big networks, means that you won't be sacrificing service quality or coverage.
MVNO benefits:
- Significantly cheaper plans - Save up to $600 per year, per line.
- Customized data plans - only pay for the data that you need.
- National network coverage - the same coverage that you're used to.
- 5G & 4G LTE data speeds - typically the same data speeds as the big 3.
- Customer service - a lot of MVNOs have higher customer ratings that the big 3.
- No commitments - No contracts, credit checks, or early termination fees.
- Bring your own phone - Keep your phone and number when you switch carriers.
- Easy sign-up online - No need to drive to a store.
While UK customers have enjoyed much lower cell phone rates for years, it's now possible for you to make the most of these benefits.
Saving examples
Huge savings available on all networks
Whichever network you prefer, you can keep your phone, number and, network coverage and save money.
Here's one saving example for each network:
Best value phone plan on T-Mobile
T-Mobile vs Tello comparison
Keep your T-Mobile phone, number & coverage: Save $600 per year
| Carrier | Network Coverage | 4G/5G Data | Price | Annual Cost |
|---|---|---|---|---|
| T-Mobile | T-Mobile 4G & 5G | Unlimited | $75/mo | $900/yr |
| Tello | T-Mobile 4G & 5G | Unlimited | $25/mo | $300/yr |
| Savings | $50/mo | $600/yr | ||
Best value phone plan on Verizon
- Verizon & T-Mobile 5G & 4G LTE networks
- Unlimited talk and text
- Unlimited data
Verizon vs US Mobile comparison
Keep your Verizon phone, number & coverage: Save $594 per year
| Carrier | Network Coverage | 4G/5G Data | Price | Annual Cost |
|---|---|---|---|---|
| Verizon | Verizon 4G & 5G | Unlimited | $75/mo | $900/yr |
| US Mobile | Verizon 4G & 5G | Unlimited | $29/mo | $306/yr |
| Savings | $46/mo | $594/yr | ||
Best value phone plan on AT&T
- AT&T & T-Mobile 5G & 4G LTE networks
- Unlimited talk and text
- Unlimited data
AT&T vs Boost Mobile comparison
Keep your AT&T phone, number & coverage: Save $612 per year
| Carrier | Network Coverage | 4G/5G Data | Price | Annual Cost |
|---|---|---|---|---|
| AT&T | AT&T 4G & 5G | Unlimited | $75/mo | $900/yr |
| Boost Mobile | AT&T 4G & 5G | Unlimited | $25/mo | $288/yr |
| Savings | $50/mo | $612/yr | ||
Saving Tips
5 Tips to Cut Your Phone Bill Today
- Switch to a low-cost carrier - Compare cheap cell phone plans from numerous low-cost carriers in one place to find the best deal.
- Choose a customized data plan - You can typically save $600 per year, per line by choosing a customized plan.
- Keep your device after you've paid it off - You can bring your own phone and number to a new carrier, rather than buy another one.
- If you do upgrade, buy refurbished - You can buy a refurbished phone and save 50% off buying it new.
- Sell old devices for cash online - You can also sell your phone for cash to put towards another one. Even better, you'll typically get significantly more money than trading it in-store.
Compare the cheapest cell phone plans
| Carrier | Network | Data | Price |
|---|---|---|---|
| Tello 2GB plan | T-Mobile 5G/4G Coverage | 2GB | $10/mo |
| Twigby 5GB plan | Verizon 5G/4G Coverage | 5GB | $10/mo |
| US Mobile 10GB plan | Verizon & T-Mobile 5G/4G Coverage | 10GB | $15/mo |
| Boost Mobile unlimited data plan | AT&T & T-Mobile 5G/4G Coverage | Unltd | $12.50/mo |
| Tello unlimited data plan | T-Mobile 5G/4G Coverage | Unltd | $25/mo |
Benefits of buying an unlocked cell phone
Buying a refurbished phone can save you hundreds of dollars. By choosing an unlocked phone, you'll be able to use it with any carrier and switch anytime, without the burden of monthly installment payments.
- Get a similar smartphone for a fraction of the price of a new one.
- Free yourself from a two-year commitment to a device payment.
- Choose the smartphone and carrier plan combination that works best for you.
Recap
There are huge wireless savings out there for you right now:
- Empower yourself with all the information before switching.
- Americans currently pay more than twice as much as UK cell phone customers.
- MVNOs now offer numerous benefits and savings for US consumers.
- You can save even more by pairing a cheap MVNO plan with a refurbished cell phone.
Use our comparison tool to quickly and easily compare cell phone plans or check out our cell phone plan savings calculator.
