It’s fun to watch the wireless carriers struggle to keep their prices sky-high while still dipping into the “low end” of the market. It’s quite a contorted two-step. It requires downgrading certain phones and services, or otherwise hampering them from working at full efficiency to make a low-value product, but also creating an arm’s length sub-brand so as to not tarnish the main brand (or offend customers who are paying double and triple the price). The sub-brands must pull quite the inside straight — they have to appeal to the poor credit and coupon-seeking crowds alike, but still somehow carry enough stigma that the high-priced customers wouldn’t want to be caught dead with one.
The cell phone brand two-step reached new heights a few weeks ago when Verizon quietly launched “Total Wireless.” The service is operated by TracFone but, critically, uses Verizon towers. You wouldn’t know Verizon is involved from looking at the Total Wireless website – Verizon’s name isn’t on the “about us” page. The coverage map, many observers have remarked, is obviously a map of Verizon’s towers, however. Total Wireless didn’t even change the color scheme.
You’d have to wonder why Verizon would be embarrassed about this new product. Well, here’s why: Individual data plans start at $35 per month for 2.5 gigs of data, when you bring your own phone. That’s about double what the parent brand plans cost ($75 for 2 gigs on the plan I spied). Even better (worse?) — overage for Total Wireless costs $10 for 1.5 more gigs, while it’s $15 for 1 gig on Verizon Wireless. It’s the same data. It just costs less for the discount brand.
Well, not exactly. While the coverage for Total Wireless is the same as Verizon Wireless, the speed is not. Total wireless phones don’t get access to Verizon’s fast 4G network. Search the firm’s website with care and you will eventually find the catch on the terms and conditions page – customers can only use the slower 3G service on Total Wireless. Note, this isn’t obvious from the Total Wireless home page, which boasts only that “Lucky for you, we are on America’s largest network.”
Now, there’s nothing wrong with segmenting the market. Want basic smartphone access? Pay about $40-50. Want super smartphone access? Pay about $100 – $125. That’s fair enough. I just wish it didn’t have to be so intentionally confusing.
Of course, Verizon didn’t invent this problem. In fact, it’s late to the game. All the big wireless carriers do it. The AT&T discount service is called Cricket Wireless, Sprint’s is Boost Mobile, and T-Mobile is GoSmartMobile. All of them let folks have smartphones at a reasonable price, and that’s great. The phones will leave behind users who want to take advantage of the latest apps, video, and of course, snazzy new iPhones and Androids, but that’s not the end of the world.
The folks at SaveOnPhone.com think phones are changing so quickly that no-contract phone are really the way to go.
“Whatever plan you choose, do not sign a contract for cell service,” says John Oldshue. “Find a good used phone or buy one, but don’t fall for the “free phone with a contract,” which all big four carriers offer. Prices are dropping so quickly, so there is no longer any reason to be locked in a contract for an extended period of time.”
That’s certainly advice many folks should take to heart, though there are still some lingering reasons to go with contract phones — mostly, to get the latest phone. But I believe leaps between phone generations are also getting smaller, which means one-year-old smartphones aren’t as stale as they would have been a few years ago. So, get to know your secret sub-brand and check out your choices. You no longer have to sacrifice service availability to get discount smartphone service.