What’s The Catch?: Do You Want Free Data?

Just got this text from my wireless carrier:

We appreciate your loyalty.  You are currently on the $50/2GB plan.  You can now get an extra 2GB of data per month for the same price you pay now.  There’s no change to your voice plan or contract extension.  Would you like to move to this new plan.  If so, reply YES.

What would you do?

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Some potential answers from students might include:

  • Call the carrier to understand what you are agreeing to.
  • Be wary since this may lead to higher costs once your contact expires.  It may be free now but if you don’t change it back to 2GB later, they will charge you for it.  Why you should check your bill every month.
  • Check your contract end period and be sure to switch back to 2GB a month before your contract expires if you have maintained usage below 2GB every month.  This usage information is available on their website.

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Ask students why a company might offer you free data usage.

Potential answers:

  • Will encourage you to use more data and once your contract is up, you will stay at the higher data usage level and have to pay for it.
  • Encourage brand loyalty.  Wireless business is very profitable.  Once you have built out your network, each customer you add has low marginal cost.  They want to maintain high customer retention levels.
  • Maybe they cut the prices on their plans and don’t want me to negotiate a lower rate and so are offering me more to keep me at higher price point (hat tip to Andrew Furth for this one!)