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Understanding Cellular Data Plans

Selecting cellular data plans can be an overwhelming adventure. There are just so many options out there and cellular companies frequently change their offerings.

Plans come with a lot of fine print, and in particular, the carriers don't necessarily design and market their plans to those seeking a home internet replacement.

This guide is written to help you understand the different types of plans available and navigating shopping the myriad of options out there - so that you can make the right choices for your needs.

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Who To Buy Your Plan From

The first confusing point about cellular data plans is all of the available choices. However, it's important to remember there are currently only four major nationwide carriers in the U.S.: Verizon, AT&T, T-Mobile, and Sprint. And Sprint has been merged with T-Mobile, so Sprint's presence and plan availability is on the decline as the carriers combine their networks.

Any plan you purchase in the US that claims nationwide access will be on one of these four carriers. And there are some regional carriers out there as well who only serve a smaller geographic area. 

Each of these major carriers has both postpaid and prepaid direct plan offerings, their own prepaid brands, and official and unofficial resellers. They also tend to have consumer plans meant for individuals & families, and business plans meant for small to large businesses. 

The carriers tend to give their own postpaid plans the premium access to their networks, with priority decreasing from there. This prioritization can impact things like the speeds you'll receive, roaming partnerships (thus coverage), features and latency.

To put it simply, when all other factors are equal, carrier direct postpaid plans will have the best performance.

Carrier Direct Postpaid Plans

These are the plans you obtain either directly in the carrier's retail stores, through authorized resellers or via carrier's websites - and likely the first ones you'll encounter as you start shopping.

Postpaid means that you pay for your service at the end of your billing month, and the carriers tend to give higher priority and better customer service to these plans.

Because you are paying for service after it's delivered, the carrier will want you to establish an account with them based on your credit record. If you can't pass their credit check, you may be required to put up a deposit.

The credit check requirement also means that if you don't have a U.S. billing address then you probably can't acquire these plans, which means they are probably not an option for most foreign visitors.

Postpaid plans are traditionally associated with contracts, although many options exist to avoid contracts if you're willing to purchase your cellular devices outright or on your own instead of subsidizing or financing them through the carrier.

In general, postpaid plans are going to have the latest and most popular features - like better customer support, mobile hotspot, higher definition video and other perks. They're also most likely to include domestic and international roaming agreements and will have the fastest speeds on the network. Also important to note is that postpaid plans are usually grandfathered when they are retired.

Of course, these perks come with a price. Postpaid carrier direct plans also tend to be the most expensive plans.

Postpaid carrier direct plans are usually the first preference for those who depend on mobile internet - but they also usually come with lower data bandwith caps, particularly for hotspot and tethered data.

Carrier Direct Prepaid

All of the carriers also offer direct prepaid or pay-as-you-go plans that allow customers to only pay for service when they need it, rather than making long-term commitments. This makes setting up service easy without any contracts, going through credit checks, or giving up your personal information.

Although, these days, most carriers add incentives for automatic monthly payments by setting up an account with them - making the plans less 'pay-as-you-go' and less anonymous.

These plans are usually offered on the carrier's website, through corporate stores, or via authorized resellers and are branded as the carrier's prepaid service (ie. Verizon Prepaid, AT&T Prepaid, etc.).

The plans usually cost less than their postpaid equivalents, but lack some of the features or come with additional restrictions or lower priority. For example, they might be subject to de-prioritized service, more aggressive mobile hotspot caps & restrictions, lack of domestic roaming, less international support, lower resolution video streaming and more.

Prepaid Brands, MVNOs & Resellers

Moving beyond plans available directly from the carrier, there are dozens of alternative options available on the mobile market. These options tend to be month-to-month (no-contract), don't require credit checks, and may not always be officially authorized by the carriers.

Some of these options are also more easily available to non-U.S. residents who are traveling within the US.

There is a huge diversity of choices and it can quickly become overwhelming and confusing to navigate options. 

Alternative cellular plan options tend to be classified into three categories - but the lines can get quite blurred:

Carrier Subsidiaries - Prepaid Brands

Each carrier has its own independent prepaid brands that they utilize to target niche markets.

For example, AT&T owns Cricket Wireless, Verizon owns Visible, and T-Mobile owns Metro by T-Mobile. You acquire these plans at branded storefronts (i.e. you can't go to an AT&T store to get a Cricket plan).

The plans will often mimic the carrier-direct prepaid options or might offer slightly different benefits and restrictions. These plans will also tend to be slightly deprioritized over carrier direct prepaid traffic and may be missing other features.

MVNOs - Mobile Virtual Network Operators

MVNOs buy service in bulk from the major carriers and resell it under their own brands with their own terms and provide their own customer service. These "virtual" carriers usually directly negotiate and operate under authorized contracts with one or more major carriers to resell service.

The advantage of MVNO plans is there are a lot more options and you can often get better deals and higher usage caps than you can by buying directly from the carrier.

MVNOs are usually not allowed to advertise who is providing the underlying network, but if you explicitly ask or do some online digging, it isn’t hard to figure out which data network is behind any given plan (resources: MVNO’s on Wikipedia & BestMVNO).

Some MVNOs use color codes to signal which network the plan is on - Red for Verizon, Blue for AT&T, Pink for T-Mobile, and Yellow for Sprint.

Some examples of MVNOs include StraightTalk, Consumer Cellular, Google Fi, and FreedomPop. None of these companies are owned by the carriers themselves. They are operated completely independently.

3rd Party Resellers

These are companies that have acquired lines of service from the major carriers and are reselling services, typically as rental or leased options. Unlike MVNOs who tend to have a specific agreement with the carriers to resell services, resellers don't always have explicit arrangements. They do not repackage the plans - but resell them as is, with the carrier's terms of service intact.

These may be legit, or could be operating in grey areas. They could be reselling lines specifically against a carrier's terms of service, or going through master agents who do have legit business agreements with the carriers.

It can be hard to tell, and the reseller isn't likely to be upfront either way.

This uncertainty means there is a lot more volatility and churn in the reseller market than other markets as options come and go.

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Understanding Unlimited Data Plan Restrictions

Unlimited cellular high-speed data plans are in high demand for the mobile community who would like to affordably use hundreds of GBs of data a month.

While all of the carriers proudly advertise unlimited data plans, they have redefined the term “unlimited”  to try to find a balance between capacity and consumer desire.

These days 'unlimited' basically just means no automatic overage charges.

Unfortunately, that means "unlimited" plans come with limitations and gotchas.

The most typical restriction on unlimited plans is the practice of slowing down speeds delivered - either always, or after a specific point of usage. Sometimes, unlimited high-speed data is only provided for certain activities.

Understanding terms like throttling, network management, mobile hotspot restriction, video resolution and fair use policies is critical to understanding if a plan will work for you. 

We have an entire guide that dives into this topic:

Understanding the Limits on Unlimited Data Plans

Or watch our video:

 

Member Only Content In This Guide

Here's a sneak peak at the member exclusive topics in this guide:

Network Management Deep Dive

A more detailed look at how network management works, how carriers prioritize data, and manage their networks.

Downsides of Reseller Plans

While resellers and MVNO can net you better terms and pricing than direct with the carrier - they do come with some considerations.

Data Plan Types

This section goes over unlimited, tiered, data only and connected car plans

Plan Features

Understand the features of your plan. This section goes over hotspot versus on device data, roaming and video services.

Tips for Comparing Plans

When shopping for plans, there are multiple factors you should use to compare them - from coverage, costs and discounts.

Contract Considerations

Should you pursue a contract or avoid them?

Navigating Customer Service & Representatives

This section shares a lot of tips and tricks for reaching the right people to get the service you need.

Grandfathered & Retired Plans

What happens when a carrier discontinues a plan you love? Do you get to keep it forever?

Terms of Service Considerations

This section goes over some of the common terms of service that consumers either knowingly or ignorantly violate to use their data plan how they desire.

Assembling a GREAT Cellular Data Plan Arsenal

Assembling a great setup usually requires multiple plans, and occasionally switching things up. This section goes over how to best do this.

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Conclusion: Know the Details Before Deciding

When purchasing a new data plan, make sure you understand the differences between the different types of options in order to get one best suited to your needs. Choosing a prepaid or data reseller can be cheaper, but can also come with restrictions, such as limits of data, throttling, and mobile hotspot restrictions. Also make sure you understand how each plan defines "unlimited" as those plans often come with limitations.

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