Millions of people switch cell phone carriers every year, but what are their reasons for switching? With so many people opting for new carriers, I'm sure we've all began to wonder if we're missing some sort of memo; I know I've been wondering.
With so many people opting for new carriers, I'm sure we've all began to wonder if we're missing some sort of memo; I know I've been wondering.
As a result, I'm determined to find an answer to the mysterious questions: why are so many people opting to switch cell phone carriers and, well, should I switch too?
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I am also determined to clear up customer's confusion involving the cell phone industry that has emerged from the creation of new unlimited cell phone plans, ever-changing policies, and misleading advertisements.
In this article, I will identify why so many people are switching carriers and discuss what it is that makes the cell phone industry so stinking confusing. I will also do my best to make it less confusing. Read on if you're interested.
In This Guide
Why Are People Switching Carriers?
Each month around 2% percent U.S. cell phone users switch carriers. Over half of these people switch to get a cheaper plan. Below, I will go through their possible reasons for switching and try to clear up some confusion.
Cost is a huge reason for people switching to other cell phone providers. AT&T and Verizon are the two most expensive wireless companies out there, for sure. In the past couple of years, over half of consumers that switched from AT&T or Verizon cited the high costs as their reason for switching, according to the Huffington Post.
It's true, Verizon and AT&T have higher costs in exchange for a slightly larger coverage area compared to Sprint and T-Mobile. They are typically about $10-15 more expensive.
If you're worried about cost, you can check out our cell phone savings calculator. It will tell you exactly how much money you could be saving with a different mobile phone plan.
Poor Customer Service or Negative Experience
Although you may assume customer service is a big reason for people switching, it's not. According to a report from Consumer Intelligence Research Partners, "Customers do not change carriers because of customer service." As a result, it seems wireless carriers don't pay much attention to fine-tuning their customer service.
Though many customers don't claim to switch because of bad customer service, maybe if customer service were a little better, people wouldn't feel so inclined to leave their carriers.
Almost 40 percent of Sprint and T-Mobile customers who have switched say they did so because of poor network quality, according to the Huffington Post. Sprint and T-Mobile have a reputation for less reliable wireless service at a lower price while Verizon Wireless and AT&T are known for reliable service at higher costs. If your motive is to switch to a service that is reliable at all times, you should make sure you know the facts before you switch.
Although you may have heard T-Mobile and Sprint have less reliability than Verizon Wireless and AT&T, things change every day.
In a recent report from Open Access, for example, T-Mobile passed AT&T in LTE availability. The report says, "T-Mobile's LTE speeds were available 83 percent of the time compared to AT&T's 80 percent of the time." That puts T-Mobile in the LTE lead behind Verizon.
When it comes to call and text coverage, the big four aren't as different as you may think. Verizon has 97.7 percent reliability, AT&T has 96.44 percent, T-Mobile has 95.4 percent, and Sprint comes in last at 93.42 percent, according to RootMetrics, Open Signal, and the FCC. Keep in mind that these numbers are national and coverage does vary depending on where you live. All in all, if you're planning to leave a company because you think another will be more reliable, they probably won't be all that much more reliable anyway.
Some companies offer perks and benefits to coax you to switch to their service, but it might take longer than expected to get what you're promised. You may also have to jump through some hoops to make sure you get the deal you were offered to switch.
One couple had so much trouble getting the $650 per line promotion they were promised before switching to AT&T that they had to call nearly 25 times to get it resolved, according to ABC News 11. AT&T said they hadn't abided by the terms and conditions. Here are AT&T's terms and conditions.
As you can see, wireless companies do their best to make the terms and conditions small so you don't pay much attention to them. This way, you might not be able to advantage of their promotions if you weren't even aware they were made available.
As another example, Sprint is currently offering $650 per line to new customers toward early termination fees and installment balances when they switch. In order to be eligible, however, you must follow the detailed instructions on their site. First, you must port and activate your cell phone number with a Sprint Lease or 24-month installment.
Then, you'll need to trade in the phone tied to your previous carrier and complete a registration form for each device you're switching over within 60 days. Once you've done that, you have to follow more directions to register and upload your bill. Don't forget to read the terms and conditions, too, because there are exclusions.
Here are Sprint's terms and conditions so you can see for yourself.
Connect with Friends & Family
Another reason people switch is to get on a family plan with friends or family members who are on a different network. Some people may be looking to switch to a joint, no-contract plan with no possibility of early termination fees while others may be looking for an affordable, shared family plan with data allotments their current carrier doesn't provide.
There's nothing to clear up here. If you want to connect with friends and family by switching over your cell phone number, that's your prerogative. Just make sure to check out the pros and cons of each carrier and plan before you make any big decisions.
What's All of the Confusion About?
Are you just super confused by the entire wireless industry? It's ok, really.
The wireless industry is confusing on every level. We've gone from worrying about being charged for every megabyte and minute we use to worrying about two-year contracts and overage charges. The latest fad is unlimited plans, which make it seem like we're missing out on something if we don't switch to unlimited everything, fast.
If you aren't sure what's going on, here goes my attempt to make you a lot less confused.
Billing Issues & Price Hikes
Billing issues and price hikes might sound like a good reason to switch cell phone providers. If your bill is constantly more than you expect it to be, you probably don't have a great feeling about your provider. After all, who wouldn't be angry about unexpected and unexplained price hikes on their bill each month?
Unfortunately, price hikes happen all too often in wireless contracts. It's just the way of the industry.
For example, AT&T has recently raised prices for those in grandfathered unlimited plans for the second time in the past couple of years, according to The Verge. T-Mobile and Verizon have also increased prices in the past couple of years, according to the Motley Fool. Even Sprint has recently gotten rid of its promotion to cut your bill in half when you switch to their wireless service.
If you're planning to switch because of rate hikes, just know that you might experience them everywhere you go. In my opinion, you should pay more attention to whether or not your wireless company communicates the price hike to you ahead of time instead of blindsiding you. If they communicate well and provide reliable service, they sound like a keeper to me.
An alternative is to consider a prepaid cell phone plan. You can check out our guide for a more detailed explanation, but I'll offer a quick summary here. In short, prepaid phone plans give consumers greater control over how much they pay and how much data they use.
You might not have access to the same perks as a postpaid plan, and you might find yourself locked out of service if you run out of data, but you'll save more money in the long run.
Fine Print/Terms & Conditions
Fine print, terms and conditions can slip right by you if you're not paying enough attention. Many wireless customers are confused by their plan and by promotional buyouts because they listen to what they hear on commercials and in the media. Sadly, the fine print always tells a different story, and you'll probably have to search for it yourself.
Related Guide: Are No Contract Plans Actually Better Than 2 Year Contract Plans?
For example, you will have to trade in your phone to get a promotional buyout from one of the big four wireless companies. You may also have to commit to a certain plan and send in your bill if you want a buyout.
Wireless companies also tend to hide information about charges in their terms and conditions. Here's an example from Verizon's website.
I have experienced the confusion that occurs while trying to comprehend exactly what your terms and conditions mean in relation to your plan, and it's not fun.
Instead of playing the guessing games, call your provider directly if you're not sure. Always write down what they tell you and ask for their name. This way, you have proof if someone else tries to tell you something different.
Confusion Regarding SIM Cards
Although many new iPhones and such have both CDMA and GSM capability, older phones and other brands do not. If your phone only works with either CDMA or GSM, you may be wondering what that means. You can check out our guide to understand the difference between CDMA and GSM.
Mainly, GSM phones have better international roaming capabilities than CDMA. GSM phones also usually operate using removable a sim card, unlike CDMA phones. This makes it easy to pull out the sim card and put in another phone for a bring your own phone plan or when you go traveling.
Hidden Taxes & Fees
Hidden taxes and fees are a cause for great anger and confusion from wireless customers. It is like pulling teeth, after all. Why don't the companies just tell us what the final price will be?! Sadly, nearly all wireless sites advertise prices without taxes and fees included.
Sadly, nearly all wireless sites advertise prices without taxes and fees included. It's an easy way to confuse customers by making them think they'll be paying less for their service. T-Mobile, and several MVNOs, actually advertise their plans with taxes and fees included. So while their plans might seem more expensive than others at first glance, keep in mind that you can expect to see a higher price on your bill with a different carrier.
You should also note, however, that state taxes will likely never be calculated into the price of the plan and phone until you're at the final buying point. Because state taxes vary, the final price will be different for most people.
If you want to make sure you don't get hit with surprising taxes and fees, read the fine print and make sure you understand it. If you want to know how much your bill will be after taxes and fees before you buy, contact customer service and have them figure it out for you. Otherwise, you could be in for an unpleasant surprise. We break down nearly every hidden fee, cost, and tax you can expect to pay on our cell phone plan comparison tool.
Lack of Communication Between Customer & Customer Service
Customer service reps aren't usually very inclined to give you the best deals available. Unfortunately, they'd rather you pay more money than work to get you the best price on a plan. This can be confusing for customers, especially when we just want to know the best option.
If you're annoyed by a lack of communication between you and your wireless provider, there may be a solution besides switching. Although, if it's really bad, I don't blame you for switching right away.
First, call your provider and tell them about your frustration. Tell them you're planning on switching for a lack of communication and see what they say. Sometimes, wireless companies will offer pretty incentives to keep customers around, especially in the age of such intense competition among the top providers.
New Phones & Plans are Always Coming Out
With so many new phones and plans coming out each year, I'm sure you can agree it's hard to keep up. Should you get an iPhone or a Samsung Galaxy? Do you want a contract plan or a no-contract plan? Which plans and phones are the cheapest and most reliable? Do you really need unlimited data?
Just when you think you've got the most quality, affordable phone with the best deal available to you, another plan or promotion comes on TV discussing why they are better than the last. It can be incredibly frustrating.
Related Guide: Why is Buying a Cell Phone so Confusing?
Many MVNOs Only Own a Portion of a Carrier's Network
An MVNO is a mobile virtual network operator. MVNOs are wireless cell phone companies that lease network space from the big four wireless companies and sell it to their customers for a discounted price. Simply put, an MVNO doesn't exclusively own the data and minutes it sells.
This may be confusing, seeing as some MVNOs are also owned by one of the big four wireless companies. However, just because an MVNO is owned by a certain wireless company doesn't mean you will always get the same reliable coverage. Straight Talk and Republic Wireless are both examples of MVNOs.
Straight Talk and Republic Wireless both lease their network space from Sprint. They then sell Sprint service to consumers for a discounted price. MVNO customers may experience more problems with latency than Sprint customer, especially during hours of network congestion. This is because they only own a portion of space on Sprint's network, not the whole thing.
Service is Never as Good as Promised
If you're feeling like service is never as good as it's promised to be, you're right. With so much fierce competition among wireless networks, every company has to make its features, promotions, and benefits seem better than the rest. As a result, they hype themselves up to be a lot better than they actually are. I can use customer service, reliability, and low prices all as examples.
Many companies boast amazing customer service when they actually don't invest in bettering their customer service at all. Many companies boast great reliability when their services can barely connect a call in semi-rural areas.
Additionally, many companies boast low prices when in actuality their taxes and fees make them just as expensive as the rest. So how do you ever determine if you're being told the truth or being sold a lie when it comes to your cell phone carrier? Well, that's what we're here for.
Clearing Up the Confusion
Here at MoneySavingPro, we believe informed consumers make better decisions while they're shopping for new products and services. We especially strive to make sure consumers are as knowledgeable as possible before making important buying decisions like switching carriers or opting for a cheaper plan.
To help you better understand exactly what you are paying for and what service you will be receiving in return, we have published numerous guides and tools covering dozens of topics related to cell phones. For example, you can use our cell phone savings calculator to find out exactly how much you can save by switching to another provider.
Then, you can use our cell phone plan comparison tool to see precisely how much you will pay each month on a new cell phone plan. You should also check out our guide on how to avoid early termination fees when you switch carriers.
Make Your Move
The bottom line is, new phones and plans are confusing. Some of us (like me) think it would be nice if new phones and plans were only allowed to come out every couple of years. It would at least give us a little bit of time to adjust to our current state of confusion within our latest wireless plan and phone system. Sadly, that will probably never happen.
Luckily, we've created MoneySavingPro to keep you up to date on new phones, plans, and cell phone secrets your wireless carrier probably won't fill you in on.
Don't worry; we've got your back.
Are you thinking about switching carriers for any of the reasons discussed above? If you feel informed enough about your decision, I recommend making the move as soon as possible; right now, today!