When I last signed up for a new cell phone service, I opted for the “family plan” that provided two lines with a shared pool of up to 400 minutes per month.   At $600/year, this was cheaper than having two separate plans with the theoretical estimated use of the second line.  While reviewing my cell phone bill, I realized it’s been over four and a half years since I tried to calculate the optimal cell phone plan for my usage. It’s time to do that again.

I enjoy the convenience of a cell phone, but I’m not obsessed with to the point that I’m seduced with each siren chirp (or flashing pretty lights) when there’s a message waiting like, say, all the Crackberry owners at my office who furtively email during meetings.  Work had given me a Blackberry for a year, but they didn’t include a voice phone service with it.  While it was fine for business travel – especially that trip to LA when I’d forgotten my laptop charger – at all other times it was Yet Another Device I had to carry around in my man purse.

As for other phone services:

• Web browsing – one of my first phones had this and it sucked.  Transfer speed was on a geologic timescale: unusable.
• Ringtones – I just want my phone to brrrrrring — like a phone should.  It seems kind of dumb that people would spend money on customized jingles with a quality rivaling 1993 MIDI technology, but it’s their money.  The only problem I have is when a coworker’s phone announces their significant other is calling by playing — and this is a hypothetical example (ahem) — M.C. Hammer Sir Mix-a-Lot’s (Edit: Thanks, Ben!) “I Like Big Butts.“  TMI!  TMI!  TMI!
• Text messaging – I don’t use this very often because the user interface is not good for conveying sarcastic nuance, complete sentences or, as I am wont to do, parenthetical asides.  (Like the time …)
• Camera – I have/used to have a camera phone.  Transferring pictures was a fourteen click operation per picture that might have been tolerable if the pictures didn’t completely suck.
• GPS – after the camera experience, I hadn’t considered this a viable option.  The iPhone is an intriguing option, but the estimated two year cost approaches $2,000 for the basic plan.
• TV/TiVo/DVD remote control – (My Clie had one!)  I’d like to have this option of avoiding sensory overload when entering Costco or having a power lunch at a sports bar.

The cost of my current plan, 400 “anytime” minutes, is $49.99/month, which is about $600/year.   (For simplicity, I have not included the $11-12/month for tax, title, rust undercoating and 9/11 surcharge.) In looking at my 2008 phone usage, I realized it’s difficult — and I’m too lazy to try — to divvy  up my monthly usage data into separate “anytime,” night and “T-mobile to T-mobile” buckets.   For simplicity, let’s assume I make all my calls during the daytime.  Let’s also assume I don’t choose my friends and relatives based on their having a like cell phone provider.

My monthly usage can be approximated by the formula:

90 minutes + 10 minutes per day of traveling

3 text messages per month

On average, this amounts to 120 minutes per month with a peak of 300 (e.g., October).  The second line sees only 16 minutes a month.

Annual usage: Phone 1 = 1500 minutes, Phone 2: 200 minutes.

As far as I can determine,  there aren’t any family plans for less than $50/month. Breaking the two phones into separate allotted plans would cost $10/month more.  So I started looking into pre-paid plans.

If I put the second line on a prepaid plan, I could get away with dropping my plan down to the $29.99 for   The second line would use $10/month worth of minutes (or $120/year).  We could also buy a bloc of 1000 minutes for $100, which would satisfy that phone usage for a year (and then some).   Under that option, the annual cost is $480, or $120 cheaper than my current plan.  It’s clearly an improvement.

As a mental exercise, I calculated the cost of putting both lines on a pay-as-you-go plan.  If I purchase 1000 minutes for $100, they’re good for an entire year.  Based on my usage, two cards would easily last a year.  That puts my annual cost at $300: $200 for my phone plus $100 for the second phone.  It’s a 50% savings.

For completeness, I also calculated the annual cost (to me) if I used their weird “Pay by the day” plan.  This scheme charges $1.00 per day for each day calls are made plus a ~$0.10/minute fee for calls made from 7am – 7pm or to non-T-mobile customers.  (Those calls are “free.”)  I couldn’t come up with useful data to support this case — both from lacking data and not wanting to spend the time to dredge it up — but on raw days of usage, it’s only slightly better than what I have now.

Conclusion: pre-paid seems to be the cheapest solution for my need.  After I worked all this out in a pretty spreadsheet, the December 2008 issue of Consumer Reports recommends the same thing.