TCP case study 4: Ruth chooses a mobile plan
Ruth wants a new smartphone and intends to spend around $30 a month. She mainly texts her friends but her family expects her to call. She will use the phone for the internet but only occasionally. Ruth’s first instinct is that she should go for the cheapest plan.
Comparing the costs
Telecommunications providers (telcos) must provide standard charges in print ads for any mobile phone plans where a price is quoted. This will enable Ruth to calculate the best deal.
Plan A—Telco A offers a phone she likes for $29 a month, which includes $180 worth of value. The ad states that:
the unit price for a two-minute call is $2.36
the unit price for a text is 30 cents
the unit price for a MB of data is free for the first 200 MB then 25 cents per MB.
Plan B—The same phone is available for $35 a month from telco B and includes $200 worth of value. This ad states that:
the unit price for a two-minute call is $2.15
the unit price for a text is 25 cents
the unit price for a MB of data is free for the first 200 MB then 50 cents per MB.
The summaries of the plans listed above will tell Ruth that she can make 76 standard calls on plan A if she sends no texts. This compares to 93 standard calls on plan B if she sends no texts.
More information, better choices
Telcos must also provide standard charges and other important information in a Critical Information Summary for each of their plans. Customers like Ruth can pick up a copy in the telco’s shop or download from its website and use it to compare plans.
Last updated: 18 December 2015