December 2004
Thinking About Giving
A Cell Phone for Christmas?

   I was interested but not surprised by a recent national news story about cell phones. According to a recent survey by TNS Telecoms, 78 percent of wireless minutes are not used each month. This is roughly 1,400 unused minutes per average household. Yes, some of these minutes are part of the “free nights and weekends” and may not represent as much financial loss to the consumer as it would seem, but 78 percent is still an incredibly high figure.

   This brought to mind a concern I hear frequently from consumers: Their cell phone plan is costing them much more than they had bargained for.

   Most consumers buy cell phone service based on the monthly price. However, there are other important considerations as well. Below are 16 questions you should ask before you sign a cell phone contract.

1) When are the night, weekend, peak, off-peak, and “anytime” minutes?
2) Exactly where is “home,” “region,” and “nation”?
3) Does nationwide mean the carrier’s national network only?
4) Who pays for incoming calls?
5) What is the price per minute if you exceed the plan’s limits?
6) How much are roaming charges?
7) Is long distance included?
8) What happens to unused minutes?
9) Can you share minutes with family members?
10) What happens to fractions of minutes?
11) Can I use my phone with another carrier?
12) What exactly are “additional charges”?
13) What are the charges to start and end service, including early contract-termination fees?
14) Does this phone work in analog mode?
15) What are the estimated taxes, fees, and surcharges?
16) Is there a “test drive” period? If so, for how long?
Be careful when purchasing your cell phone plan from a kiosk at the mall. The kiosk owner may tack on additional early contract-cancellation charges that may total as much as $600.

   If you want broader coverage in rural areas, you may want an analog-capable cell phone that allows you to switch to analog service when digital service is not available. However, remember that analog service is older technology, may provide poor sound quality, use up your phone battery, and run up hefty roaming charges.

   If you are still unsure about a cell phone plan, you may want to start with a prepaid cell phone just to determine your calling patterns. Prepaid service can offer voice mail, special ring tones, and other enhancements offered with more traditional cell phone service. Pre-paid minutes are more expensive—usually between 15¢ and 50¢ per minute. You will also have to buy the phone, although you c an expect some special deals being offered by providers. Make sure you know when the minutes expire—typically 30, 60, or 90 days depending on the face value of the card you buy. You can find these phones for sale at many major retailers.

   Incredibly, although in the U.S. there are an estimated 167 million subscribers to wireless cell phones, this industry is essentially unregulated by government. In Wisconsin, the Bureau of Consumer Protection takes complaints on cell phone service. Bureau Director Jim Rabbitt recently told me that his department has received about 80 written cell phone complaints since it began specially recording such complaints in February. Many complaints allege the cell phone service was not what was promised or that the consumer was incorrectly charged for roaming. Jim expects complaint numbers to grow steadily. I will cover these complaints more in future columns.

Please have a happy and safe holiday season!