By Frank Ling

Getting a cool new smartphone is great, but there are additional charges that aren’t always apparent, especially for individuals who have never owned one of these devices before--wireless carriers require a mandatory data plan with the purchase of a smartphone, and these fees can range anywhere from $30 a month or substantially more.

There are “unlimited data plans” offered but as we’ll see, many of them aren’t really unlimited at all, but have serious restrictions. We’ll try to lift the fog on these plans and see which ones are really unlimited.

What’s a data plan?
A data plan is a service you buy from the wireless carrier that enables you to connect to the Internet with your smartphone. You can surf the web, watch videos, listen to music, shop on the Internet, view content, and just about anything else you’d be able to do on an Internet connected computer – just on a smaller scale.

Data plan prices
Data plan prices vary according to the amount of bandwidth or data you want to use per month. A basic 2GB per month plan will allow you to watch 2 HD movies, 5 hours of TV shows or download 41 music albums. These plans start at around $30 per month from most carriers.

3G or 4G?
The rate you pay for a data plan also depends on what sort of network speed you choose with the wireless carrier. Think of this as a speed limit on the freeway; the higher the speed allowed, the faster you get to your destination. 4G networks are faster than 3G networks and cost more per GB than 3G speed plans.

Overage fees
With standard data plans, if you go over your limit, you’ll be charged “overage” fees. These usually amount to $10 for each additional gigabyte of bandwidth you use. Studies show that most individuals who use data plans rarely go over the 3GB limit, but for those who use a lot of data, unlimited plans may be the way to go.

They all say they are “unlimited”
When unlimited data plans first came out, it meant customers could use as much bandwidth as they wanted to for a flat rate. But with the advent of the iPhone and ever increasing demand for bandwidth from smartphone customers, true unlimited data plans are now virtually non-existent.

T-Mobile, AT&T, and Verizon all have “unlimited” data plans but with heavy restrictions. For instance, if you have a 3GB per month plan, you can use unlimited data as long as you pay for overage charges that go past your allotment. Pretty slick trick, isn’t it?

When unlimited doesn’t mean unlimited
To prevent customers from constantly going over their monthly data allotment, some wireless carriers will send warning text messages to customers who are

approaching their data limits before the month is up. Others will throttle or slow down your connection speeds to a crawl if you go over your limit.

So when you look at unlimited data plans from the majority of wireless carriers, unlimited doesn’t mean unlimited at all. What it all boils down to is this -- customers who regularly go over their limits are “encouraged” to buy into higher priced data plans that offer more bandwidth.

A true unlimited data plan
Sprint is the only major wireless carrier that offers a true unlimited data plan without any restrictions, hidden fees or penalties at the moment. There are no overage fees, throttling of bandwidth or any limitations at all. Check with Sprint to see its current rates for unlimited data.

It adds up
It doesn’t matter if you sign up for a limited or unlimited data plan, the annual costs will amount to more than $300 per year or over $600 on a two-year required contract with a wireless carrier.

Smartphones are great, but the buyer should be aware that their discounted smartphone may not be such a money saver after all the required plans are tallied up.

Frank Ling is the SF Gadgets Examiner. He is a writer, professional photographer, and video editor. One of his all-time favorite jobs was working at a large video game publisher testing games.

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