Data overage charges crushing cellphone customers

Comcast delivers another bill with an expletive
Comcast delivers another bill with an expletive

American cellphone customers are paying more data overage fees than ever before.

More than a quarter of AT&T customers and 20% of Verizon customers said they paid an overage charge in the past six months -- both records, according to a survey by Cowen & Co.

The overage charges are exacerbated by tablets -- a record 24% of tablet owners with a 4G plan paid an overage charge.

The problem isn't going away: The wireless industry expects mobile data usage to double each year for the next several years.

"I simply think our usage is outstripping our plans," said Colby Synesael, analyst at Cowen & Co.

Related: The cell phone data scam

Verizon customers are responding by upping their data plans. The percentage of Verizon customers who have switched to a bigger data plans grew for the second quarter in a row.

Oddly, the percentage of AT&T (T) customers who have bumped up their plans to a bigger bucket of data has fallen for four straight quarters. Cowen & Co. believes that's a result of AT&T not offering enough data tiers: It has a 2 GB plan for $30 a month; a 5 GB plan for $50 a month; or a 15 GB plan for $100 a month -- with nothing in between.

Verizon (VZ) recently adjusted its buckets of data, offering 1 GB, 3 GB, 6 GB, 12 GB and 18 GB tiers.

Upgrading from one tier to the next costs just $15 or $20 a month extra -- not the $50 jump that AT&T charges to go from 5 GB to 15 GB.

Verizon and AT&T declined to comment for this story.

T-Mobile and Sprint customers fared much better in the survey.

T-Mobile technically does not charge overages, though the carrier slows down customers' speeds after they reach their monthly data allotment.

T-Mobile allows its 5-GB-a-month customers to upgrade to an unlimited plan for just $10 extra.

Virtually all Sprint customers are on unlimited data plans, but a small percentage are on tiered plans, and 3% of Sprint customers reported paying overages recently.

T-Mobile (TMUS) and Sprint took the survey as an endorsement of their no-overage strategies.

(T-Mobile this week planned stunts in which skywriting airplanes poked fun at Verizon and AT&T's by writing "End overages now" above the companies' headquarters.)

"We are always looking at what customers want and watching trends in data consumption closely, so stay tuned on this," said a spokesman for T-Mobile.

Sprint (S) said its customers get the best value.

"They don't worry about overages with unlimited data," said a spokeswoman for Sprint. "Plus, AT&T and Verizon don't even offer unlimited plans to new customers."

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