WIRELESS WATCH
What’s the Deal with Refurbished Phones? - Wireless carriers are often quick to offer a “free” wireless handset with new service activation or a two-year contract renewal. They reason that by locking consumers into a two-year contract, they can recoup the cost of the phone. Savvy consumers might want to look into signing up for a shorter-term plan and paying up front for a refurbished handset. Refurbished handsets are generally phones that have been returned to the carrier due to defects or thanks to recycling programs. Carriers generally clean out the handset’s memory of any data (phone numbers, contacts, etc.), test it, repair any damage, and resell the phone at a discount as part of an entry-level kit or in secondary markets or use it for warranty exchanges. The major national carriers do not usually offer refurbished handsets for sale on their websites. However, if you ask a customer service agent either on the phone or in a retail store about purchasing a refurbished phone, they can usually direct you to those models. There are several issues to keep in mind before purchasing a refurbished handset, however. First, pay close attention to the return policy of the phone. While carriers make their best effort to repair any defects, refurbished phone are not new phones and usually do not carry the same warranty. Generally, if something goes wrong with the phone, it will happen within the first few weeks of use. Make sure that your carrier will honor a return at least two weeks after purchase of the phone. Second, while refurbished phones are often a good deal, don’t count on them lasting as long as a new phone. Third, don’t expect to get the latest and greatest in features and styling with a refurbished phone. Generally, refurbished handsets tend to be at least a year old when they are sold. Finally, your choices of phone model will likely be limited by whatever refurbished handsets the carrier has available at that time, so don’t expect to have access to every handset that the carrier currently sells. That said, if you are looking for a less expensive, basic phone to be used mostly for making calls and the occasional text message, taking the time to ask your carrier about a refurbished phone may save you some money.
Hybrid Prepaid Plans Offer Consumers Another Way to Control Wireless Spending - Wireless phone consumers are often been faced with a difficult choice between postpaid and prepaid wireless plans. With traditional postpaid plans, users sign up for a one or two-year contract and get a free or heavily discounted handset along with a bucket of minutes every month. The problem lies in the fact that many users end up paying for minutes they don’t use. Also, their monthly bills usually include an additional 10-20% on top of their monthly service fees in discretionary fees, taxes, and surcharges. Prepaid plans offer many advantages over postpaid plans, but also have many disadvantages. With prepaid plans, there is no contract to sign, no credit check, and users pay only for the minutes they use. On the downside, however, the average prepaid minute costs around 25¢. This is significantly more expensive than a minute of usage on most postpaid plans. Also, the handsets themselves cost anywhere from $35-$190 depending on carrier and model. Finally, refilling the minutes on a prepaid phone usually requires replacement minutes to be purchased at a store, online, or on the phone. This can be inconvenient for many users. To chase after users who want to freedom of a prepaid phone without all the hassles, Verizon Wireless and Cingular have recently begun offering so-called “hybrid” prepaid plans. Verizon’s INpulse plan charges users 99¢ per day for service. As with Verizon’s postpaid plans, in-network and nighttime calls are not charged for airtime and domestic long distance is included. Peak time (6:00am-8:59pm) out-of-network calls are charged 10¢ per minute. Additional minutes must also be purchased on a regular basis -- anywhere from every 30 to 120 days, depending on number of minutes bought. For more information on Verizon’s INpulse service, click here. Verizon is not alone in offering hybrid prepaid plans. In May, Cingular relaunched its GoPhone prepaid service with two plan types. The first, GoPhone’s 10¢ per minute Pay as You Go plan, resembles Verizon’s INpulse plan but only charges a $1.00 per day fee on days that the service is used. Also, while in-network calls are not charged airtime, night and weekend calls are charged the same 10¢ per minute rate as all other out-of-network calls. The second GoPhone option is GoPhone Pick Your Plan, which allows users to choose from a range of prepaid plans costing $39.99 to $69.99 per month depending on how large a bucket of minutes is chosen. The plan fee is deducted from a checking account or credit card on a scheduled date. Additionally, unused minutes are rolled over to the next month when the monthly service fee is paid. For more information on Cingular’s GoPhone options, visit www.cingular.com. For consumers, the biggest advantages of these hybrid plans is that the minutes are generally cheaper than with pure prepaid plans and there are no long term contracts to sign. The biggest disadvantages to these plans are the high up-front costs of the handsets themselves and the fact that minutes on these plans are still more expensive than on postpaid plans. However, for budget-minded consumers hybrid plans are an intriguing new option in the seemingly never-ending battle to keep wireless phone bills in check.
TRAC AND YOU
Tell Us Your VoIP Stories - The era of the “old-fashioned” phone that plugs into a wall jack and runs over copper wires is rapidly coming to an end thanks to the explosion in the use of wireless phones and, to a lesser but growing extent, the proliferation of high-quality residential Voice-Over-Internet-Protocol (VoIP) calling technologies. In industry jargon, the copper network is known by the acronym “POTS” which stands for “Plain Old Telephone Service.” This should give consumers an idea of how telephone companies view their century-old copper line-based telephone network. As users migrate to new calling technologies, especially VoIP, we here at TRAC have become interested in just how “great” this new technology actually is for consumers. If you have switched your home telephone service to VoIP, we’d like to hear your story. How is the call quality? Are you saving money with VoIP versus your old local and long distance plans? Have you had to dial 911 from your VoIP phone? If you ported your telephone number to your new VoIP service, what was your porting experience like? E-mail your stories to trac@trac.org. We’ll choose the best ones and publish them in a future edition of TRACNotes.
INTERESTING LINKS
FCC Main Page: http://www.fcc.gov
FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm
List of State Regulatory Commissions: http://www.naruc.org/displaycommon.cfm?an=15
What do you think? Got a tip you want to share? Nominate your "Scam of the Week" and your "Tip of the Week" - If we select your submission, we'll give you a one-year free membership in TRAC and acknowledge your contribution by name in TRACNotes. Send an e-mail to trac@trac.org to submit your ideas!
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©2005 Telecommunications Research and Action Center. TRAC grants unlimited rights to reproduce TRACNotes or any information contained in it provided attribution is given as follows: "Source: Telecommunications Research and Action Center. http://www.trac.org"
