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Wednesday, June 2, 2010

How Many $ for How Many MB ?

The news is full of items discussing AT&T's new data pricing for iPhones. Since mobile phone plans are among the most complex contracts that many people ever have to face, I thought it would be worth tackling this on the Excel Math blog.

What can an elementary school graduate do with his or her Excel Math education?

Help a parent understand the phone plans!

The new AT&T pricing strategy looks like this:

DataPlus = 200 MB of data per month for $15. If you go over, 200 MB costs $15 extra.
DataPro  = 2000 MB of data per month for $25. If you go over, 1 GB costs $10 extra.

Notice the cost of the data varies greatly! Using $ per 100 MB as our standard unit, we have:

DataPlus 200 at $15 = (15 ÷ 2) = $7.50 for 100 MB; extra data =  $7.50 for 100 MB
DataPro 2000 at $25 = (25 ÷ 20) = $1.25 per 100 MB; extra data = $1.00 for 100 MB

The price per 100 MB is much less under the DataPro plan, but it's not a good deal if you never use that much data. The real advantage to AT&T would be if we all signed up for the DataPlus plans, then went over just a smidge (yes, that's a real math word!) more than our limit. Then our cost would be $30 but the actual cost per 100 MB would be $15 per 100 MB or more than 10 times the DataPro price.

In order to evaluate the choices, you need to KNOW FOR YOURSELF what your data usage is. You are going to sign a binding contract that you will pay for this data!

AT&T says 65% of us should be under the limit on DataPlus, and 33% should be ok with DataPro limits. We'll see about that. Here's the data they gave me on usage - a pretty graph, but useless:

What's missing here? I looked up my data for the last 18 months and did a graph of my own showing the limit line (green) and the average (red).

On average I would be okay at the $15 per month limit. It looks like I would have gone over a couple times in the past few months, but if I'd had this choice of plans a year ago I could have saved $15 a month for 10 of the 12 months - or $150!

If you never have had an iPhone, how would you estimate your usage?  The AT&T website now has a calculator so you can give it a whirl. It looks like this. The sample page below shows how many items you can send/receive and stay under 250 MB.

(Hmmm - why is the plan limit 200 MB while the sample calculator shows 250 MB?) 

If you want to play with the calculator yourself, it's here.