Cell Phones: Find the Right Calling Plan and Handset

Article courtesy of ConsumerReports.org

Buying advice

Cell phones

Service providers determine the phone models that work on their networks. So when you're replacing your phone, decide whether you'll stay with your current wireless service or switch to a new one.

WHAT'S AVAILABLE

You can find cell phones in many outlets, including carrier stores, independent wireless retailers, electronics stores, and Web sites. But the cell phone is only part of what you need. You also have to sign up for service with a wireless provider and choose a calling plan.

The providers. The major national companies are Alltel, AT&T, Sprint Nextel, T-Mobile, and Verizon Wireless. There are also many local or regional providers. The leading phone manufacturers include LG Electronics, Motorola, Nokia, Samsung, and Sanyo. Prices range from free with a two-year contract (including rebates) to $200 or more for an unlocked phone without carrier commitment.

HOW TO CHOOSE

Decide how you'll use the phone. Putting aside smart phones (See our Buying advice on smart phones), choose a simple model if you need only voice and text messages, or want to limit cost and size (most models are compact and are priced from $20 to $100 or come free with a two-year contract). The keypad and overall operation is generally fairly straightforward. All allow you to store frequently used numbers and send and receive text messages, and many have basic cameras and Bluetooth support for wireless hands-free communication.

You'll probably need to spend more than $100 to access high-speed data networks (3G) and enjoy music and video-based services. Other capabilities might include a touch screen, a QWERTY keyboard, a multi-megapixel camera, an html browser, memory-card storage for music and pictures, and more options for custom ring tones, games, and other services.

Consider the carrier. Most phones work only with a specific carrier, so you might have to decide whether to stay with your current provider or select a new one when shopping for a phone. Major carriers use one of two digital networks: CDMA (Alltel, Sprint, and Verizon) or GSM (AT&T and T-Mobile). The network plays a big part in the capabilities your phone will have and, to some extent, its performance.

Most GSM phones, for example, provide more talk time on a battery charge, typically five hours or more, compared with three or four hours for a CDMA phone. Another GSM advantage: The phones have a SIM card that stores your account information and, if you choose, your phone book. When you switch to a new phone, you can simply remove the card from inside the old phone and insert it into the new one. But you can't use a T-Mobile SIM card in an AT&T phone, or vice versa. Also, GMS phones work more widely across the world than do CDMA phones.

In our tests, CDMA phones typically have modestly better voice quality than GSM models They're also more likely than GSM phones to have historically useful features, like a standard headset connector. Some CDMA carriers such as Verizon offer phones that can switch to GSM when used outside of the United States.

You'll often find phones described as quad- or tri-band, dual-band, or multinetwork. Those terms describe the ways a phone can connect to one or more wireless networks, which affects the coverage your phone provides. Here are the specifics:

Look for sensible features. Cameras and music players are fun, but other features such as programmable shortcuts, speakerphone and voice command might be more critical for easier use.

Consider shape and size. Phones that fold, slide, or swivel are typically more compact when closed. Phones shaped like candy bars can be used without first being opened. The best choice depends largely on personal preference, so visit a store and hold the phone if possible. Make sure you can comfortably use most keys with one hand. Make a test call and access menu items. We've found that flat or virtual keypads make dialing more difficult without looking. Other call clunkers include keys that are small, oddly shaped, or arranged in unusual patterns, especially if you're trying to dial a number in dim light.

Check the display. Most color screens are fine in dim and normal light, but some are harder to see in daylight or under bright light. Try the phone outside or under bright light. In our tests, phones that displayed incoming and outgoing numbers in large black type against a white background were the easiest to read under most conditions. Also make sure indicators such as battery life and signal strength are clearly visible.

Check for special prices and promotions. Rebates and special offers can be substantial, but they change frequently. To get the best deal, check the carrier's offerings online and in its retail stores, and then see what independent dealers offer at their Web sites and in their outlets. If at all possible, buy a new phone when you're switching carriers or signing a new service commitment with your existing carrier. You almost always get a better deal—either a deeply discounted price or even a free phone—when you're signing a contract.

Consider buying online. In our last cell-phone buying survey, online retailers satisfied customers more than walk-in stores did. Buyer satisfaction was higher among those who bought from service provider or independent Web sites. While they might be conveniently situated, major chains such as Best Buy and Circuit City, service-provider retail stores, and mom-and-pop wireless stores were less-satisfactory options for our respondents.

Check the return policy. Make sure that you can return the phone if you're not happy with it. Some stores attach stiff service-cancellation fees on top of what a carrier might charge.

Don't buy phone insurance. All major cell carriers offer insurance policies that cover lost, stolen, or damaged phones. Those policies typically cost about $4 to $5 a month and carry a $35 to $100 deductible. We don't think insurance is worthwhile for most consumers. The cost of the premium over a year, for example, would be $50 or $60. Tack on the deductible, and you've paid as much as you would have to buy a new phone. In addition, some insurance plans require you to fill out a police report, and damaged phones are often replaced with a refurbished phone that might not even be the same model.

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Copyright (c) 2009 Consumers Union of U.S., Inc.