Accordong to the latest RootMetrics report on the U.S. wireless industry, AT&T has nearly caught up with Verizon as the top carrier.
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Of course, both Sprint and T-Mobile have taken issue with that report, with T-Mobile CEO John Legere strongly questioning its methodology. With those objections noted, AT&T and Verizon are the top two carriers in the United States by number of subscribers, and the report does rank them first and second.
"In short, even though Verizon led the way in terms of award total at the national level, AT&T wasn't far behind in a majority of categories," wrote the RootMetrics team. "Indeed, AT&T has consistently remained a strong number two performer behind Verizon in a majority of categories in our United States testing for five consecutive test periods."
These results, along with a somewhat outdated, but widely accepted view of AT&T and Verizon as the top two carriers, lead a significant fraction of U.S. consumers to pick their carriers by weighing just those two companies against each other. That's not fair to Sprint or T-Mobile, which are both generally cheaper than the big two, and which have greatly improved the quality of their networks, but it is how many people think.
So, with the large caveat that most people should consider all four major carriers when they search for a wireless provider, here's a look at how AT&T and Verizon stack up against each other.
AT&T and Verizon had the most first-place finishes on the RootMetrics report, which T-Mobile is very critical of because the methodology left out its most-current technology. Source: RootMetrics.
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AT&T vs. Verizon: Devices
Since all four major carriers have gotten rid of two-year contracts, you would think that purchasing a device would be simple. It is -- if you're willing to pay full retail price for your phone up front. In that case, while there might be sales or special offers, generally both AT&T and Verizon charge the same prices for popular devices -- the manufacturer's suggested retail price.
On popular handsets like the iPhone 6s, Verizon offers a 24-month financing plan where consumers with good credit pay $27.08 a month for 24 months at 0% interest. That comes to a total of $649.92, a $0.07 saving over the buy-it-now price of $649.99.
AT&T offers the same price for an iPhone 6s to consumers buying up front, but then has a whole array of choices based on the payment plan the customer picks. Factors that affect the price include the length of the payment terms as well as whether the customer makes a down payment. The plans include:
- AT&T Next 24: Despite the name this plan has customers paying $21.67 for 30 months, resulting in them paying $650.01, a $0.02 premium. In addition anyone on this plan pays a $15 activation fee.
- AT&T Next 18: The naming convention continues to be odd as this program costs $27.09 for 24 months, a $650.16 total, plus, of course, a $15 activation fee.
- AT&T Next 12: A 20-month plan, this one charges $32.50 a month totaling $650 plus the $15 activation fee.
- AT&T Next with Down payment: Customers pay $195 upfront and then $16.25 for 28 months, a $650 total, plus the $15 activation fee.
The catch with the AT&T Next plans is that they allowcustomers to turn in their devices for a newer model after the number of months in each plan's name. That's not as good a perk as it sounds because in the case of Next 24, the user will have paid off $520.08 of the $649.99 device by the time it's eligible for an upgrade. Trade it in and that equity is lost. In most cases, simply paying the device off and selling it would be a better deal.
Verizon wins when it comes to device pricing simply because its offer is not confusing nor an attempt to pull one over on consumers. The AT&T deals are designed to benefit the company -- not its customers -- and the activation fees just add insult to injury.
AT&T vs. Verizon plan prices
When phones were subsidized, plan pricing was different if you bought your phone up front. That is no longer the case, as AT&T and Verizon both charge the same price whether you buy or finance your phone. Both also offer a number of add-ons and extras, with the most common being insurance, but since prices are nearly identical (about $7 for basic protection and $11 for more comprehensive coverage), that won't be factored in.
Verizon offers unlimited text and calling on all its plans, which all charge a $20 line-access fee. After that, customers pick a monthly data plan, 1GB for $30, 3GB for $45, 6GB for $60, 12GB of data for $80 (with a 2GB bonus thrown in), or 18GB for $100 (which also comes with an extra 2GB). As you can see data gets cheaper as you buy more of it.
AT&T also has a number of plans, and a device-access charge which varies depending upon how much data you buy. Fortunately, the company shows the total price, so the breakdown between what is an access fee and what is a data charge is not really relevant. The plans are: 300 MB for $45, 2GB for $55, 5GB for $75, 15GB for $115, 20GB for $155, 25GB for $190, 30 GB for $240, 40GB for $315, and 50 GB for $390.
That's a confusing array of numbers, but let's boil it down to a few likely consumer choices:
Verizon's 1GB plan costs a total of $50 or 3GB for $65, while AT&T offers 300MB for $45 or 2GB for $55. That makes AT&T the best choice for low-data users, not because it has the cheapest plan -- 300MB would be a mistake for nearly anyone -- but because its 2GB deal is only $5 more than Verizon's 1GB plan and it's $10 cheaper thanVerizon's 3GB offering.
On the bigger data plans, Verizon offers 14GB (12 plus 2 bonus) for $100 while AT&T's closest comparable is 15GB for $115. At that level, Verizon wins.
At the top of the Verizon scale 20GB for $120 also bests AT&T's $155 for 20GB offer.
The bottom line
By offering choices which in most cases are not directly comparable, AT&T and Verizon have made picking between them fairly challenging. Still, Verizon offers a very straightforward device purchase plan while AT&T's financing choices are borderline sleazy attempts to mislead consumers.
In most cases, Verizon offers a better deal, aside from the low-data user situations listed above. In all cases, it's hard to see how either of these companies represents a better choice than going with lower-cost plans from Sprint and T-Mobile, which in some cases for Sprint and all cases for T-Mobile do not ding thecustomer with overage charges should they exceed their allotted data total.
The article AT&T vs. Verizon: Which Offers Consumers a Better Wireless Deal? originally appeared on Fool.com.
Daniel Kline has no position in any stocks mentioned. He is a T-Mobile customer who looks forward to the inevitable articles on lost productivity due to March Madness. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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