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December 06, 2004
Experiments in Frugality
Posted by Dana Blankenhorn
Glenn Fleishman drew a lot of admiring attention over the weekend for his experiment in frugality, trying to see just how little he could pay for the telecom service he needs. (The picture is the thumbnail from Glenn's blog.)
Basically he moved calls to his mobile phone and DSL line, using Vonage and SkypeOut. He also spent $3/month for a Cingular service called FastForward that moves all calls to his DSL when he hits the limits on his calling plan.
Glenn figures he's saving $130/month. (Your mileage may vary.) I wish I could do as well.
The fact is, here on Winter Avenue I spend $250/month on telecom services. There's my cable package, which recently shot up to $80/month (sue me I like soccer) and can't be replaced by a dish because the neighbor likes trees (and so do I). There's my DSL package, $60/month with junk charges, that must ride on a phone line which costs $60/month thanks to junk charges. And finally, the mobile plan, another $50.
That's without long distance, just the regular stuff I need to make it through the day.
Could I save by, say, dumping the phone line and moving everything to the cable modem? Maybe, but then my life would be as dependable as Comcast, and dependent on them as well. Could I get a cheaper mobile package? Maybe, but then I'd have no back-up if I actually did make some long distance calls. Yes, I could dump the soccer, even dump the cable entirely, but that's not part of the experiment Glenn conducted.
Glenn saved money because he talks a lot. By moving from metered to unmetered (or less-metered) routes for his talking he saved a bundle. Bundling can also save a bundle. I just choose not to do it, and pay for the privilege.
Comments (1)
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Glenn Fleishman on December 6, 2004 09:24 AM writes...
I talk a lot? Yes! I do! I don't take umbrage. Actually, the problem isn't minutes used, it's opportunity costs that the operators put upon me. I had a 1250-minute cellular plan because when I would cross lower thresholds with cheaper plans, I'd find my cell bill would be $200 or $300 in a given month instead of $100. It was cheaper for me to pay $137 per month than $100 a month because of those overages.
Using a combination of VoIP services has taken some of the sting out of the overage issue, meaning that I transfer some of my monthly cost to unlimited or very cheap per-minute services and thus conserve my cellular minutes for high-priced talk. (I do talk a lot because of the interviews I have to perform for my ongoing reportage.)
Likewise, Cingular has taken some of the necessity for a higher-minute plan out of their offering by becoming huge and including unlimited mobile-to-mobile minutes in their service. They have over 45 million customers now, and I don't use minutes when talking to those customers.
This seems like it would eat into Cingular's profits, but, in fact, I believe that they make more money by convincing families to get on the same service, and they don't pay completion or other fees for intra-network calls. So an intra-network call might cost them a fraction of a cent per minute, but result in more bottom-line plans of $50 to $70 per month that are used primarily for intra-network calling. That's my theory, at least.
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