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Tuesday, October 2, 2012

Rising Smartphone Bills Cut Into Family Budgets

As more Americans opt for smartphones, telecom companies like Verizon and AT&T are getting a huge boost from the data plans they’re selling. Telecoms have seen revenue for data plans increase by $38 billion over four years.

And that’s translating into dramatically higher cell phone bills. Last year, some families with four smartphones spent more than $4,000 to stay connected.

That figure has been rising for the past four years.

But as families increase the amount of money they spend on cell phone service, they’re cutting back in other areas, like eating out, clothes and entertainment.

And economic experts say that shift in spending is hurting the bottom line of restaurants, clothing stores and the film industry.

Guest:

  • Anton Troianovsky, telecom reporter for the Wall Street Journal

Please follow our community rules when engaging in comment discussion on this site.
  • dialyn

    Sorry, but if people are sacrificing to pay for SmartPhones and then complaining that they don’t have enough money, they have lost my sympathy.  I don’t have a SmartPhone, and, from the sounds of it, it is an expense I couldn’t afford anyway.  It’s not really a necessity…it is a just a big “want” installed by this idiot need to keep up with someone else who doesn’t care about you anyway.  Thanks, but no thanks. There’s no one I respect that would think less of me for not being a lemming.

    • Mike M

      I have a phone that’s just a phone (well, it does text, too). I have a plan that does not include data. I pay less than $40/mo. No sympathy. Why does ANYONE NEED data? Especially  a teen or a twenty-something barrista?

  • Maggie

    We might be willing to pay but only if the service is good, right now the conflicts between different software/hardware companies (Apple, Samsung, Google, etc.) are starting to affect the consumer by limiting and dictating what they can do or not, it is starting to get out of hand and they are close to taking it to a point where cost won’t be such a deciding factor.  Nobody likes bullies!

  • MarkVII88

    I love my smart phone, but I can’t give up my land line.  I live just outside of Burlington, VT near Lake Champlain and it’s far from being a rural area.  But my cell phone signal is so spotty, even 10 minutes outside the city, that I sometimes get better reception in my garage than in my living room.  If I had to rely on my smart phone in an emergency, I could very well be out of luck.

  • MadameX

    Definitely getting rid of the iphone.  The mandatory 2-year contract was onerous, but I thought I’d give it a try to ahve internet access.  Unfortunately, this also increased my cellphone compoent  charge 3x since I could not get a pay-as-you -go plan — my preference sinc eI do not use s cellpohone much.

    I’m going to get a cheap cellpohone with a low monthly charge, and then a eifi only tablet of some kind.  The latter is a much better option than the spartphone sinc eI can actually read something comfortably.

  • Caitlin Curtiss

    I am probably the only twenty-something who doesn’t carry a smartphone, or a cell phone for that matter. Though the GPS and App features are convenient, there’s just no excuse for spending upwards of a hundred dollars a month. Especially in this day-and-age, where options like Majic Jacks make telephone service cheaper than ever.

  • Mariposa Munich

    My husband and I, along with our daughter, held a family meeting before we bought our last round of smart phones. We agreed unanimously that we would rather have a more
    expensive data plan and do away with some of our eating out and a few other unecessary expenses. With our jobs, it’s invaluable for my husband and I to be able to access the web no matter where we are, and it’s easily worth the sacrifice of a sushi dinner or two every month.

  • Romain

    Phone and internet bills are  astonishly expensive in the US for a very poor service. I come from France where for €20/month (roughly $25/month) you get unlimited calls to landphones in France and 40 other countries as well as cells in France, USA and Canada. You also get unlimited texting and 3go of 3g data/month + you can hook up on thousands of hotspots and your home wifi.
    Several companies allow you to have 2 phone numbers (work and personal) on the same phone.
    You can have a cell line for your kid for 2€/month (1hour of call and 60 SMS).
    Home internet + tv + phone (domestic and abroad) is 25€/month
    I use my phone to phone or text. I keep my money to go out, see people and support local business.

  • terraton

    Why would families pay so much for smart phones?  Because they love it, because it is so convenient, and because information about the potential related health concerns is kept comfortably at bay.  Do all these people know that even their friendly smart phone company has warned them inside the instruction manual, to keep the phone no closer than 1/2 to 1 inch away from the body (and head) whenever the phone is turned on, in use or not.  It’s in there because they can’t guarantee that the radiation from the phone will meet the FCC exposure limits unless you do that.  The more sinister reason is that printing it in the manual, even in tiny font, protects their legal behinds, even if you never read it or hear about it anywhere else.

  • Humonics

    Smart phones!? 
    Yes very smart for the cell network suppliers.  Very, very smart for the manufacturers.  But smart for the consumer? I do not think
    so.  The actual technology provided and
    the promise of technology to serve our every whim is truly revolutionary. But
    revolutionary for what?  To solve what
    problem, need, or requirement?  It appears
    it is only to solve the problems found in our imagination.   This is
    especially true when we stop and recognize the cost for this revolutionary service.
     These devices only marginally allow us to
    afford to keep up with the neighbors/peers/strangers. And then, only sort
    of.  My cell phone just talks.  It cannot even take –nor send– pictures. Imagine
    that!!  My low monthly cell phone bill?
    No imagination required.  It’s a fact.    

  • Spfried

    I played the cell phone segment for my macroeconomics class at Monroe County Community College in Monroe, Michigan and they knew that you were discussing opportunity costs and elasticity.

    Steve F

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