How Cellphone Plans Are Redefining the Meaning of 'Family'

For carriers, family plans' lower fees are offset by brand loyalty, electronic ecosystems and access to users' networks. JL


Julia Carpenter reports in the Wall Street Journal:

There are work families and friend families. Now, many people also have cellphone-plan families. Due to greatly reduced costs, family cellphone plans have become increasingly popular among nonfamily groups—networks of friends, roommates, neighbors and even colleagues are connected by these arrangements. In the U.S., 70% of postpaid cellphone plan customers are on family plans. Family plans are more cost-effective for because the plan limits the account support costs on the carrier’s end. Keeping family units on one plan is a way to boost brand loyalty. If the families aren’t related there is the bonus of accessing a user’s larger social circle.
There are work families and friend families. Now, many people also have cellphone-plan families.

Due to greatly reduced costs, family cellphone plans have become increasingly popular among nonfamily groups—networks of friends, roommates, neighbors and even colleagues are connected by these arrangements.
The Rev. Sam Sawyer first met his cellphone plan “family” in 2006, after he completed the first stage of Jesuit training. In 2007, he and a group of other Jesuits enrolled in a family cellphone plan, and Father Sawyer has run the group ever since, eventually combining plans with another group of Jesuits in 2015.

In the 10-plus years since its formation, priests and brothers have dropped off the plan or been added to it, depending on where they are sent by the order.
“We got reassigned all over the country, but we didn’t take the plan apart and rebuild it because it seemed like too much trouble at that point,” said Father Sawyer, of New York City. “So we kept the plan, and over time…other Jesuits have joined the plan who realized ‘Oh, wait, I can do this less expensively.’”
The majority of American cellphone users are on a family plan: In the U.S., approximately 70% of postpaid cellphone plan customers surveyed by Cowen are on family plans.
These arrangements remain popular in part because they make the most financial sense for the majority of Americans, said Jeff Moore, principal of Wave7 Research, a telecommunications research group.
The savings are obvious: At the nation’s major carriers, including Verizon Communications Inc., Sprint Corp. , AT&T Inc. and T-Mobile US Inc., the cost for a one-line plan with unlimited talk, text and smartphone data can range from around $60 to $95, not including taxes and fees for most.
By comparison, family plans are cheaper by around $10 a person for two people and as much as $35 cheaper per person for a family plan with four lines.
The maximum number of lines varies from carrier to carrier, with T-Mobile capping it at 12 and Verizon at 10.
People using family plans for groups outside of their nuclear family is “definitely a phenomenon,” Mr. Moore said.
Family plans are more cost-effective for many customers because, with only one account holder, the plan limits the account support costs on the carrier’s end, according to Angie Klein, vice president of marketing for Verizon. Keeping family units on one plan is also a way to boost brand loyalty, she added. Kristin Pryor, a 36-year-old sales and marketing coordinator in Philadelphia, shares a cellphone family plan with her parents, her brother, her sister-in-law and one of her parents’ former neighbors. Her parents added the neighbor after he was widowed, so that they would be able to get in touch in case of an emergency. Ms. Pryor had been on her parents’ cellphone plan since she got her first cellphone in 2001, but recently, new data fees have her contemplating other options. “I thought we had a pretty good deal, so there was no financial benefit to switching plans,” she says. “This is the first time I’ve really considered getting off of my family plan, ever.”
And if the families aren’t related? For carriers there is the bonus of accessing a user’s larger social circle.
When Kyle Jones’s parents divorced several years ago, their family plan broke up, too. His father joined a friend’s plan, and for a period, his mother went without a cellphone. Now Mr. Jones, a 24-year-old lab technician in Atlanta, said he and his siblings have all joined other family plans.
“I just graduated college, so it helps out someone like me,” he said. “It saves me so much money.”

How to Minimize Drama on a Family Cellphone Plan

• Choose one responsible person to be the plan administrator.
  One person owning the account can help centralize control of the different lines and options. This administrator can be the one to “balance the checkbook” every month or so, calculating what each person owes.
• Keep costs transparent.
  Sharing a Google spreadsheet or document with the other people on the plan can help track expenses for each line. An international call charge or data fee then won’t come as a surprise for the person paying their share.
• Stay in communication come bill time.
  Setting up a group text or email chain to coordinate bills helps everyone stay on the same schedule.
• Coordinate a payment system.
  Venmo, Apple Pay, PayPal, personal check—whatever method you’re using to pay your bill, just make sure you’re not making it more complicated for the plan administrator. Knowing where the money will come from can help the administrator stay organized and pay the bill on time.
• Always pay on time.
  This part is simple: Pay on time. Consider how much you’re saving on a family plan—if you get kicked off the plan because you won’t make the payments on time, you’re only going to have to pay more on your own individual plan.

When he first researched what it could cost to get on his own individual plan, he said he saw his monthly bill would roughly double. From then on, he decided to stay on a friend’s family plan in Ohio, even though he now lives in Georgia.
“People my age understand, because they know it’s cheaper to be on someone else’s plan all the time.”
The wider cost-saving arrangements, though, can come with surprises—and pitfalls. “Sometimes these formations can fall apart, because you have to have complete trust and consistency in payments,” said Mr. Moore of Wave7 Research.
The logistics of cost sharing is the trickiest part of being on a family plan with nonfamily members. Father Sawyer monitors costs for his group of Jesuits on a shared Google spreadsheet. He said the cost savings on his plan makes the most sense for his group, especially because in the Jesuit order, Father Sawyer and others take a vow of poverty. His cellphone family thinks of the shared cellphone family plan as an expression of that vow, he said, because they share the plan as common property.
Each person now pays around $30 a month, covering the core cost of the plan and their share of unlimited data. If someone makes an international call, Father Sawyer said, he will account for that in the spreadsheet and charge them for it accordingly.
On the whole, he said, his group has been able to handle this arrangement with a minimum of drama, beyond what he called an annoying two weeks in 2015 when he struggled to migrate the entire plan from AT&T to T-Mobile. Occasionally, he said, he does have to nudge someone: Even priests sometimes need a Venmo reminder.
“We’ve already done what we can to make this as economical as possible, by being on the family plan,” he said. “It’s bookkeeping. Sometimes it is, ‘Hey, you do actually have to send me this money.’”