$47 a Month? Why You’re Probably Paying Double the ‘Average’ Cell Phone Bill

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A new report from the CTIA Wireless Association has it that the average monthly cell phone is $47.16. So how does it feel to be well above average?

Hearing that $47 is the average cell phone bill may seem puzzling to iPhone owners paying double that (if they’re lucky) each and every month. The figure also may be confusing in light of factoids that have emerged in recent times such as:

• In one survey, 46% of Americans with mobile phones said their monthly bill was $100 or more, and 13% said their monthly bill topped $200 per month.

• The average individual’s cell phone bill was $71 per month last year, a 31% increase since 2009, according to J.D. Power & Associates.

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• The Associated Press estimated that the average smartphone bill for an AT&T customer declined recently, from $88 to $80 monthly.

• Nearly half of American adults own smartphones, including 66% of young consumers (ages 18 to 29) and 78% of people living in $75K+ income households, per Pew Research surveys.

• According to Labor Department data cited by The Wall Street Journal, the average household’s annual phone bill came to $1,226 in 2011 (or just over $100 per month), up from $1,110 in 2007.

So how does the wireless association come up with a monthly average of $47 and change? All of the studies above indicate that the typical cell phone user is paying well above that each month.

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Consumer reporter Bob Sullivan got an explanation from the CTIA:

Vice President of Research Bob Roche said it represents “average revenue per unit,” which is quite different than an average monthly bill. For example, a family with four phones who pays a $200 bill would be paying $50 per unit.

The numbers don’t factor in the cost of handsets. What the numbers also don’t reveal is something that many cell-phone owners know all too well: Verizon and AT&T, the two biggest providers, aren’t getting less out of customers each month. Sullivan did a yeoman’s job of shopping around for a reasonable plan from either provider that comes anywhere near $47 per month, and came up with few options. More typically, a phone from either carrier will run at least $70 monthly.

The decline in the across-the-board average price per unit, then, seems to be the result of consumers turning to options other than the typical providers and the typical plans. While plans with monthly contracts, subsidized handsets, and penalties for early termination have been the standard for quite some time, cheaper prepaid plans are growing in popularity. Sales of prepaid smartphones have risen 91%, in fact.

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Also, consumers have shown a willingness to work with smaller—and let’s face it, second-rate—providers if it means a smaller monthly bill. Cricket Wireless, Sprint, and Virgin Mobile offer wireless plans starting at $25, $30, and $35 per month, respectively, and sometimes data usage and unlimited talk and text is included with these rates. Tracfone and other providers offer pay-as-you go services that can wind up costing even less.

So, yes, it is possible to pay $47 or below monthly for cell phone usage. It’s just fairly likely that doing so would require you to switch phones, and switch providers too.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

3 comments
coolbilllee
coolbilllee

Author forgot that the $47 doesn't include data.

tedkolb
tedkolb like.author.displayName 1 Like

Purchased 4 iPhone 4S's on Sept 15 (yes, day after I was unimpressed with iPhone 5) due to an in store promotion when porting my numbers.  Cost:  $200 ($50 each)

Unlimited family data & messaging plan + 1,500 shared minutes:  149.99 for first 2 iPhones then 29.99 each additional iPhone = $210 month

10% monthly bill discount due to Credit Union affiliation.

Final monthly bill for 4 iPhones with unlimited data & messaging as well as plenty of minutes to share...$188.97 + taxes

Thank you SPRINT and goodbye Verizon!

Winter1120
Winter1120

How did you possibly get a deal that great?! Please give me tips!!!! :)