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Disconnecting the Landline or the Cell Phone?

Filed in Cutting Expenses , Personal Finance 2 comments

Being somewhat of an anti-gadget type of person, I decided to check out the new Blackberry Bold earlier this morning against my better judgment.  No doubt, it’s an impressive piece of hardware, but I was quickly taken aback at the prices wireless telecom companies are charging these days.

The unlimited talk and text plan from Alltel (the only service that works well in my area) would cost me approximately $90 per month.

Come again?  That’s $1080 per year!

Realizing that $1080 is roughly equivalent to my first home’s mortgage payment, I quickly put dismissed this spur of the moment purchase.

Granted, I could have chosen a less expensive package but as a former Blackberry user, once you begin sending text messages and/or business related emails you will quickly find that this becomes a way of life.  Hence, the Blackberry’s infamous nickname – The Crackberry!

Moments later I began thinking the economics for the 85% of American’s who have at least one wireless device.

My communication costs

  • Vonage landline:  $25/month
  • Internet access (DSL):  $30/month

A total of $55/month is really about as cheap as I can go without being called a caveman, but I’ve purposely designed it to be this way.  I’m cheap, frugal, or whatever else you want to call me.  I know it, everyone else knows me personally knows it, and I’m content to be this way.  I just don’t care, and as NCN found out in a recent post, there are apparently a few others like us.

On the flip side, I have a friend that is probably the most pro-gadget guy in the world, chooses to keep an upgraded landline, a high speed internet connection, and the aforementioned Alltel plan.

The Gadget Lover’s communication costs

  • Vonage landline with fax:  $35/month
  • High speed cable based internet access:  $50/month
  • Wireless telecom (i.e. a Blackberry):  $90/month

To some, I’m sure that a total of $175/month is just a drop in the bucket and to others it’s overkill.  From my experience dealing with people like my gadget loving friend, they feel if their budget can maintain these luxuries, then it’s a justifiable expense as long as they want to have them.  As for me, I tend to practice a more frugal lifestyle.

I’m not suggesting that either of the examples is the correct way of doing things, but it does make me wonder why people tend to spend money on objects they don’t use that often or buy just to say they own that particular object.

However, I must say the $120/month difference between our preferences is significant.

The best solution?

Instead of eliminating your cell phone, a growing trend among Americans is ditching the landline entirely.  AT&T has seen accelerated subscriber loss in it’s landline business to the tune of 7-8% per year since 2006.

In an economy coping with stagflation, one could easily justify trimming back on less needed expenses.  Landlines obviously fit into the less needed category and if subscribers who prefer cell phones are forced to make a choice between their landline or wireless based telecom systems – you do the math.

Questions / Comments / Suggestions ?

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Posted by CJ   @   11 September 2008 2 comments
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2 Comments

Comments
Sep 12, 2008
9:50 am
#1 hank :

I’m a big fan of ditching the landline completely – I haven’t owned one in the last 5 years, and don’t plan on owning one in the future. It offsets the cost of the higher price for the wireless and the new T-Mobile@Home bit seems to be working pretty good for me, saving wireless minutes as well…

Sep 12, 2008
11:53 am
#2 Matt :

I’ve been looking into the home based wireless plans as well. The only reason I really haven’t converted is that I love my old Vonage line that I use for teleconferencing. I spend hours on that thing for business calls without worrying about long distance charges.

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