Amid Smartphone Boom, New CUB/Validas Analysis Reveals Illinois Cellphone Customers Overpay By $1.4 Billion A Year On Data

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Jun 18, 2013, 11:30 ET

CHICAGO, June 18, 2013 /PRNewswire-USNewswire/ -- As smartphone ownership rockets to all-time highs, Illinois cellphone users pay a steep price for surfing the Web, wasting $1.4 billion a year on the wrong data plans, according to an analysis released Tuesday by the Citizens Utility Board (CUB) and wireless industry research firm Validas.

The analysis, which measured the difference between the amount of data paid for and the amount actually used, means Illinois users overpay by an average of about $194 a year on their smartphones and about $30 a year on traditional wireless phones.

CUB Executive Director David Kolata alerted consumers to CUBCellphoneSaver.com, a resource designed to help cut wireless costs. It features Validas' free online tool, Save Love Give, which has shown AT&T, Sprint and Verizon customers how to save an average of $300 a year by finding better plans with their current carrier.

Kolata said the data overpayments are connected to a chronic lack of customer education on choosing the right plan, and a cellphone industry that favors data plans with hefty flat monthly fees over a pay-for-what-you use pricing structure.

Most of the waste uncovered in the analysis is due to "oversubscription"—consumers who are on plans that give them more data than they will ever use, CUB and Validas found. Only a fraction is due to consumers who incur "overage" penalties because they use more data than their plans allow.

"This report exposes a major problem emerging in the wireless industry as smartphone ownership explodes," Kolata said. "For the most part, the U.S. cellphone market is in 'super size' mode, with many consumers chained to plans that give them more data than they need. The result is megabytes are taking a bigger and bigger bite out of our budgets."

Earlier this month, the Pew Research Center reported that for the first time ever more than half, 56 percent, of American adults own smartphones.

Based on aggregate data from actual cellphone bills analyzed by SaveLoveGive.com, Validas estimated that Illinois consumers using 13 million mobile phone lines overpay by $1.4 billion a year. Using 2012 Census population estimates, CUB quantified the problem for some major Illinois cities:

Chicago: $295.2 million per year

Rockford: $16.4 million per year

Peoria: $12.6 million per year

Springfield: $11.1 million per year

Champaign: $9 million per year

Decatur: $8.2 million per year

Kolata suggested these tips to cut data costs:

Downsize to a lower plan: AT&T, Sprint and Verizon customers can visit CUBCellphoneSaver.com, which features Validas' new online service, Save Love Give. The free service gives a customized analysis of your cellphone usage and recommends the best possible plan for you within your carrier.

Use Wi-Fi. Set your smartphone to use Wi-Fi whenever it's available. This cuts down on your data usage and could allow you to downsize to a cheaper plan.

Turn off apps. Beware of data-devouring apps or features, which may continue to run in the background long after you need them. (For example, Facebook uses a phone's GPS to track location.) Make sure they're turned off when you're not using them.

Check with your carrier. It never hurts to ask your carrier if it offers special discounts connected to your workplace. Such deals can cut bills by up to 25 percent.

Consider prepaid. More and more consumers are switching to prepaid plans, compared with more traditional contract plans. Such offers used to be reserved for people with basic cellphone needs, but prepaid plans have gotten more sophisticated, including diverse data offerings.

Don't forget other ways to save. The CUB and Validas analysis does NOT cover other notorious overcharges: bloated calling plans, expensive extras, and fraudulent "cramming" fees. Read your bill and see if there are ways to cut it further.

CUB is Illinois' leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure consumer refunds. For more information, call 1-800-669-5556, or visit CUB's award-winning website, www.CitizensUtilityBoard.org.

Validas® is at the forefront of fighting for mobile consumers, cutting their costs by an average of 20 to 40 percent. Founded by wireless industry experts, the Houston-based mobile intelligence firm estimates that "wireless waste"—the money unnecessarily spent on mobile—costs the nation's consumers $52.8 billion a year. The firm's free app, VERA, has been released on savelovegive.com to protect consumers against wireless waste by finding ways to lower their costs—and then allows users to repurpose their saved dollars towards philanthropic causes. For more information, visit www.validas.com.

SOURCE Citizens Utility Board