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Is 'unlimited' cell phone plan right for you?

March 18, 2010 12:00:00 AM PDT
The recent ads for unlimited cell phone calling plans sound very enticing especially now that most carriers have dropped the cost. But as research shows, unlimited is not for everyone. The ads are everywhere these days pushing unlimited cell phone plans at a new, reduced rate. Recently both Verizon and AT&T cut their unlimited plans for individuals from $100 a month to just under $70 and T-Mobile is down below $60 a month.

For Tamir Elghanayan, who runs a small Internet business in Westwood, the drop was right on the money. He was originally paying $180 a month and now he pays $90 a month, cutting his cost in half.

"It was $180 without the data so it was more than half if you look at it that way," said Tamir.

Tamir uses his phone mostly for incoming and outgoing business calls. But Ken Montenegro, an I.T. specialist in downtown Los Angeles, uses his phone mostly for e-mails and text messages. So he figures that switching to the unlimited calling plan would be more expense than savings.

"For some people, an unlimited plan is probably ideal if their utilization is going to be very predictable," said Ken.

Peter Pham is the CEO of BillShrink.com, a Web site designed to help consumers figure out which cell phone plan is best for them.

"Eighty percent of people who come to BillShrink save money, which means 80 percent of people are overpaying their cell phone bill," said Peter.

But in a recent survey conducted by BillShrink they found that only 12 percent of mobile subscribers would actually benefit from an unlimited calling plan. So when does it make sense?

"Unlimited is for those who just really talk a lot, a lot of texting, a lot of data, and probably not consistently with the same person," said Peter.

For example, most carriers charge $69.99 a month for their unlimited calling plan while their individual plan with a 900-minute limit is $59.99 a month, a savings of $10 a month. But if you go over those minutes by another 100 minutes, it could really cost you. At 40 cents each additional minute you would pay a whopping $40 extra a month.

And Peter says even though families may talk a lot it almost never makes sense to go to the unlimited plan.

"Sixty-five percent of an indivdual's call are typically to the same five people." Said Peter.

And if they're with the same carrier those calls are usually free. By going to BillShrink, Ken found that he could save nearly $1,900 over the next two years on his cell phone bill without an unlimited plan. Tamir, on the other hand, likes the unlimited.

"Yes, I'm happy," said Tamir.

There are several sources you might use to figure out which calling plan is best for you: LetsTalk.com, LowerMyBills.com and BillSrink.com. BillShrink does not charge for its service.