In a 'catch-22' familiar to many Americans, new national consumer research finds that most US consumers on wireless contract plans are not only paying more per month than they anticipated -- but they are also under-using their actual allotment of minutes.
A Spring 2004 study by NOP World of 1,000 US wireless customers found that the average consumer leaves 50% of their monthly anytime minutes unused. This averages to 375 wasted minutes per month in the "anytime" category -- typically the most valuable category of minutes in any wireless contract plan, and the most expensive for consumers to stock up on. The study also found that while 41% of participants used fewer than 200 anytime minutes a month, only 6% of wireless consumers actually purchased a plan consistent with that usage (one with 200 or less anytime minutes available).
Despite this widespread 'super-sizing' on minutes ultimately left unused, the average US wireless consumer is also paying 34% more than they anticipated for their monthly plan due to taxes, regulatory fees and charges for roaming and overages. Those on family plans pay 38% more per month than anticipated.
"On average, a postpaid contract plan translates into a $2,000 investment, constituting a major purchase for consumers with little understanding of their actual needs," said Adam Guy, a wireless analyst at Compete, Inc. "The looming threat of 'overage charges' drives consumers to over-buy buckets of minutes. Pay as you go plans offer consumers a low risk way to align their wireless costs with actual usage."
In fact, when the cost of lost anytime minutes is factored-in with anytime minutes actually used, the per-minute fee for the typical contract wireless plan rises to 21-cents.
Sponsored by Virgin Mobile USA, the study was designed to evaluate how consumers actually use their wireless phones -- versus how the industry prices its contract plans. The study was also designed to better understand whether offerings like "free" minutes actually provide value to the typical wireless user.
The study conducted by NOP World in April 2004 included phone interviews with 1,000 current US wireless users. In addition, NOP analyzed the actual wireless bills of over 200 study participants. The study focused on three groups of wireless customers: teens (14-18); young adults (19-34); and parents of teens who already have wireless phones.