A study conducted by billmonitor found that an overwhelming number of customers in the UK spend more for their cell phone contracts than necessary. This report was created by analyzing 28,417 cell phone bills and 8,530,118 contracts last month in the UK.
Billmonitor believes 76% of UK mobile phone customers in the UK are on the wrong contract. As a result, they spend an extra £194.71 ($317) every year. Most of the extra payments result from customers overestimating how many minutes they are going to use every month.
The reality is that customers really don’t know how many minutes they will spend talking on their phones every month. For example, one may find themselves tied to a contract that allows 1,000 anytime minutes. At the end of the month, they may have only used 500 of those minutes. Instead of saving money by choosing a plan with fewer minutes, they tend to overcompensate in order to avoid overage fees.
Of the 76% of people on the wrong contract, 29% fall victim to overage charges. This means they used more minutes, texts or data than what their contract allowed. The study says that 133MB of data is consumed by the average customer every month. This is why unlimited plans are so popular even though we most likely don’t need it to begin with.
This study was based in the UK, but the similar story could be told for the United States. It also brings up the question of whether we should only pay for the data we consume as opposed to a fixed amount every month.