The Psychology of Your Average Mobile Contract

Ever see anyone mention their mobile contract without rolling their eyes? Those charts they have for their plans with every combination of airtime, data downloads and message counts, often make you feel like you're stuck in a funny mirror house with perpetual reflecting surfaces all around you. Perhaps you always thought that all this was your fault - you'd have to be a rocket scientist or a Nobel prize-winning economist to be able to figure this out. Actually, those people can't really make heads or tails of it either. I mean, economists have always hinged their theories on demand and supply. If you have a good customer who comes back a lot, you give him a discount. But the phone companies actually make you pay more once you cross 1000 minutes. Not even Harvard economist professors are able to figure that one out.

Sure, you can say that the cell phone companies are all some kind of cartel and are all here to bill us out of house and home. While that may be true to some extent, they seem to be using deep psychology to gauge how far they can push you, more deeply than economists ever went with their Maslow pyramids of satisfaction and theire diminishing returns theories. Next to what the cell phone evil geniuses do to draw up their mobile contract policies, economists seem positively old-fashioned.

Basically, when the carrier offers you a bucket of airtime minutes, they give you almost enough, but not quite. You figure that they're not enough airtime minutes you're getting, and if you go over that, you will need to pay really high overage charges for extra minutes. So you think you are going to do the smart thing and go and buy the mobile contract that offers you a quantum jump in minutes on the cheaper one. With the higher plan you get too many minutes that you will never use. And that is where the companies make their profit. They know that you're good to pay them a big price on your mobile contract every month, that you're not going to use as much, and this gives them predictable revenue, that looks good on their balance sheet.

The cell phone companies know that their customers are not going to be standing over their mobile contract printouts and figuring out exactly what gives them the best deal. Customers have a couple of basic rules is all. They don't want to pay overage charges, and they don't want any nasty surprises. This is the psychology of the mobile contract. Within these broad lines, they can really play us like a piano. Consider how everyone falls for this kind of trick. The original iPhone sold for $400, and $20 a month for Internet access. Everyone thought this was too expensive. But then Apple dropped a couple hundred dollars off the initial price, but jacked up the Internet access price by $10 a month. This actually cost people more over the course of the two-year contract you are required to sign. But no one noticed.

The talk time you get on your mobile contract has actually grown cheaper by a third in the last six years. They needed to make up for the shortfall somewhere, and that's why they charge you for your text messages. First they say that each message costs 20 cents; and then, they tell you that you could get unlimited messaging ability if you pay them $20 a month. You figure that you're actually saving money on this. But who sends 1000 or more messages a month? You would get carpal tunnel syndrome.

Sprint has a $50 a month flat rate prepaid system with no mobile contract. You can use the Internet, or call anyone or text toyour heart's content. This is psychology again. People get so fed up with all the intricacies of the other plans, that they will pay more to Sprint. They just got more than 2 million new sign-ups. Maybe this works.