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Deciphering cell phone family plans

Line add-ons and phone requirements make it tough to get a good deal.

By Karen Datko Aug 12, 2010 10:37AM

This Deal of the Daycomes fromKelli B. Grantat partner site SmartMoney.


Cell phones have joined the ranks of back-to-school necessities, and if it seems like the family cell phone bill gets pricier each year, it's not your imagination.

Sprintrecently notified account holders on family plans that it will no longer extend employee discounts to additional phone lines or add-on services priced at less than $30. The discounts still apply to primary family plan charges, which cover the first two lines on a plan. Post continues after video.

As a result of the change, which goes into effect in late August, customers could pay as much as $24 to $648 more annually, depending on the plan, discount and number of lines. A spokeswoman says the change was done to allign the carrier's plans more closely with those of competitors AT&T and Verizon.


The elimination of the discounts marks one way carriers' family offerings have become more complex.


"These plans are very simple if you have your Ph.D.," says Carl Howe, director of Anywhere Consumer Research at the Yankee Group, a Boston-based market research firm. Feature creep on phones has pushed more consumers into plans with text and data add-ons. That's a good source of profit on the otherwise low-cost additional line plans, which can be as cheap as $5 per month, he says.


Carriers are also trying to make family plans attractive for retention purposes. "Once you're on a family plan, it's really hard to switch everyone over," Howe says. Most people on the plan will be on different contract cycles because they have been added at different times. Switching almost certainly entails an early-termination fee or three.


Family plans may be complicated to choose, but pooling minutes is an advantage that can cut hundreds of dollars from the household's annual bill. Here's what to look for:


Handset requirements. Be cautious giving in to teens' pleas for the latest handset. Many, especially smart phones, come with voice and data plan requirements, says Schwark Satyavolu, president of cell phone comparison site Depending on the carrier, those strings can effectively force consumers into a more expensive family plan.


On T-Mobile, for example, buying a smart phone requires a Family Talk + Text + Web plan, which starts at $140 per month for two lines and 750 minutes, and charges a per-phone unlimited Web fee of $10 to $30. (That's at least $40 more than the same number of minutes on a Family Talk + Text plan.)


Even if a new phone isn't on the table, review requirements on family members' current handsets to get a sense of the minimum coverage needed.


Individual vs. total usage. Carriers may offer a choice of add-ons such as text and data on a per-line basis, or as coverage for everyone on the plan. Look at recent bills to gauge the family's usage as a whole, as well as each individual's, says Allen Keiter, president of comparison site That can help you decide whether to cover one line or everyone.


Sprint tacks on a per-line fee of $5 for 300 text messages, $10 for 1,000 and $20 for unlimited on its $70, two-line family talk plans with 700 minutes. Or consumers could trade up to a $100, 1,500-minute plan with unlimited texting.


"Family" definition. For some plans, "family" includes anyone living in the same household, Howe says.


Minutes required. An unlimited plan isn't necessarily the best deal, Keiter says. "Any family plan is already going to have unlimited mobile-to-mobile in network and unlimited nights and weekends," he says. Consumers have a relatively small window to actually use plan minutes, and adding lines to an unlimited plan is significantly pricier than adding them to a limited-minute plan, he says.


On AT&T, additional lines beyond the first two in a family plan cost $10 per month on plans with up to 2,100 shared minutes and rollover. On unlimited plans, they cost $50.


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