New Devices, Pricing Models Add Confusion and Complexity to Market

My nearly 11 year old daughter wants a phone. Beyond the question of whether or not that makes good parenting sense, it has opened a doorway into the new complexity of the mobile market in the US. My anecdotal case is a window into the broader challenges and potential confusion consumers face around devices, carriers and pricing. (Less of this exists in Europe because of unlocked phones, though pricing is always an issue for consumers.)

My wife and I have two unlimited "Everything" plans from Sprint. I also have an EVO that requires a mandatory $10 supplemental payment for the 4G network, which doesn't even exist in my area. And I was also paying $30 per month for the mobile hotspot option, which I mostly use in hotels. My bill last month was $272. It's just too much -- especially in the larger context of all the access charges we pay and the fact that we're now going to get my daughter a phone.

The problem is you can't "add a line" with Sprint Everything plans. That started me looking around again at competitive plans and pricing.

Boost Mobile offers the cheapest "all-in" plan in the US market at $50. The problem is you don't get a good handset selection. VirginMobile has a $60 all-in unlimited plan; same issue there. Yet both of those are at least $40 cheaper per month than my plan -- and both run on the same Sprint network.

Sprint won't let me take my EVO to either of these value carriers however; if it did the down-market exodus would begin. 

I ruled out AT&T -- if I was going to do it I would have already for the iPhone -- and Verizon because of tiered pricing. T-Mobile has a better handset selection (than Boost, Virgin) and better pricing than Sprint but its network is GSM and not CDMA. That means new phones for everyone. 

I'm thinking about putting all of us on a T-Mobile unlimited Talk & Text plan for $110 per month. That would be a savings of about $160 per month (including my daughter) over what we pay today for just myself and my wife (there's no mobile Web however). Then I thought: I could get mobile Internet with the VirginMobile $40 MiFi unlimited plan (on the Sprint network) and just carry that device with me and my iPad or iPod Touch or use it for WiFi access on whatever phone I wind up getting. 

If I didn't care about getting value for my money I wouldn't have entered this hall of mirrors. But since I do I'm trying to figure out which combination of plans and devices will provide the services I need at the lowest cost. 

With the arrival of tablets and personal hotspots you'll see more consumers engaged in this kind of crazy making exercise. Tiered pricing also makes this more complicated for everyone, as people try and guess what their costs will be. 

My suspicion is that you'll see consumers increasingly doing a version of this dance: trying to mix services and devices to circumvent carrier pricing and restrictions. Some may give up landlines to offset increased mobile costs. I'm thinking about doing that at home and just using Google Voice as our "landline" and "spam-catcher." (In the US just over 40% of households either have no landline or use their mobile phones as their primary lines.)

What a mess; I wish we consumers could simply get the phones we wanted and then shop carriers (who would be forced to compete on price more directly). But that's very unlikely to happen in the US market at any time in the foreseeable future.