Most cell-phone users opt for service plans with contracts. In Consumer Reports' annual cell-phone service survey, more than 90 percent of respondents were serviced under contract from their cell-phone provider.
The survey also found that despite serving only 26 states, U.S. Cellular was the contract carrier that most were satisfied with, standing out for its value, voice service and customer service. Verizon Wireless, which held that position for most years since 2003, and Sprint were the highest-scoring nationally available carriers for contract service and the best choices for most people. Sprint scored better in some aspects of customer service, which was a remarkable turnaround from past years when that was a weak point for the company.
AT&T was the only carrier with scores that dropped significantly in the satisfaction survey -- and is now positioned in last place overall and in almost all of the 23 markets rated in the report.
CR's other findings include:
*No-Contract Options Multiply. Survey respondents with no cell-phone contracts made far fewer calls than those with them and rarely used data. Among no-contract service providers, Consumer Cellular scored highest for satisfaction, followed by TracFone. AT&T GoPhone was the worst provider in this category.
*No-contract service is generally most suitable for light use, but options are expanding beyond basics. There are now more conventional phones that provide data service without a contract. And carriers that specialize in no-contract service, including Virgin Mobile and Boost Mobile, are offering more smart phones.
*Faster 4G Networks Expand. So-called fourth generation networks are expanding, promising data speeds that are up to 10 times faster than 3G networks. Sprint is the leader, with its 4G network available in about 60 cities throughout the U.S. Verizon said it planned to roll out its 4G network in 38 markets by late 2010 and to a total of 100 million people by the end of 2011. But 4G isn't necessarily as fast as sometimes claimed, and the speed advantage it does have will be more apparent to those who surf the Web a lot or who use such data-heavy functions as video chat.
One in five survey respondents reported receiving an unexpectedly high bill in previous years, often for exceeding the plan's voice, text or data limits, an experience called "bill shock." Half of them were hit for $50 and one in five for more than $100. CR suggests the following tactics to cut cell-phone costs and avoiding "bill shock:"
*Monitor use and act as needed. Check your use midway through the billing cycle via device settings or online. Pageonce.com sells smart-phone apps that monitor usage and send users texts or e-mail warnings about overages.
*Don't overbuy minutes. Review the voice minutes you have used and not used in the past six months and consider switching to a plan with fewer billable daytime/anytime minutes, provided it offers the same free talk-time benefits.
*Avoid termination fees. Sixteen percent of respondents with a contract wanted to switch carriers but didn't want to get hit with early termination fees that can run as high as $350 per phone early in the contract term. Penalties gradually decline as consumers get further into the contract period. Consider transferring the contract to someone else for a $20 to $25 fee through Celltradeusa.com or Cellswapper.com. To avoid being stuck with a disappointing carrier, test the phone and service during the 15- to 30-day trial period, when consumers who quit a new contract can port their number to another carrier without penalty.
*Consider a family plan. CR recommends that consumers who need more than one line consider a family plan that provides savings through shared minutes and add-a-line prices that tend to be lower than fees for separate lines.
By the editors of Consumer Reports at www.consumerreports.org.