My Cell Phone Usage: a detailed analysis in preparation for the iPhone

The iPhone comes out on Friday. I'm pretty excited to get one.
I'm currently using a Treo 650, and I'm pleased, but not elated, with it's performance.

Today Apple published a number of different plans for the iPhone, and I decided to do a little analysis to determine which would be the right one for me.

With the Treo, I paid a great deal of money each month for flexibility. I got the contract when I was commuting to Apple, driving about 45 miles each way. I wanted to be able to speak freely to my friends and family while driving, so I splurged on a big plan that allowed 2K minutes per month.

I no longer have such a commute, but now I use my phone both for personal and business use. I don't want a restrictive plan, but I don't want to waste money either. So I set about to evaluate my past cell phone usage to see what was the right plan. I pulled my minutes (the red line) and my text messaging (the blue line) from Sprint's website, and I've charted them here (click the chart to expand).

A few things pop off the page:

• My texting has gone way up lately. I assumed this because my b-school friends use texting a lot, but clearly this started before school did, and it's begun to level off. I guess I don't have enough time in my day to send more than 400 SMS in a month. Maybe this will change with the new phone though :-)
• My voice minutes have always varied greatly (333 minutes standard deviations on a 1279 average over 26 bills), but they have begun to taper off (the average monthly minutes is down to 1071 in the last 12 months).
• Texting and minutes are negatively correlated (-0.44). Perhaps I text more these days in place of using the phone. This has to be saving me tons of time.
• I started using Twitter in January of 2007, and my texting has spiked ever since. This is due to my little habit of posting to Twitter via SMS during downtime.

OK, so really I have three choices:

1. a 900 minute plan for $80
2. a 1350 minute plan for $100
3. or a 2000 minute plan for $120

Assuming that I don't want my lifestyle to change (i.e. I don't want to cease making cell phone calls to save $20 month), which plan makes the most sense?

I looked at the Total Cost of Ownership (the cost of the plan each month, plus whatever fees I would incur for running over my allotted minutes). [You can tell that I was starving for some kind of analysis today]

It turns out that the analysis depends on which time frame I include. If I look at my entire history with Sprint (26 months), than the penalty per minute for going over the allotment would have to be $0.07 or less to justify the 900-minute plan, and $0.22-$0.07 to justify the 1350-minute plan. If the penalty were greater than $0.22 for going over, I'd be safest with the 2000 minute plan.

This all changes if you only look at the last 12 bills. I've been talking a lot less lately, so now the penalty would have to be less than $0.11 to justify the 900-minute plan, and there's no scenario where the 2000-minute plan makes sense, because I haven't once gone over 1350 minutes in the last year.

I don't know what AT&T's penalty will be for going over, but I'll use Sprint's as a proxy. At Sprint, the penalty for going over your allotment started at $0.10, and scaled up from there depending on how egregiously you violated the contract. This makes the math a little tricky (doable, but not in the amount of time I feel like spending on it). I'll suffice it to say that the average would work out to at least an $0.11 penalty, and that the 1350 plan would be the one for me.

I read that the AT&T plans include 200 text messages per month, but that you can buy the right to more. I should probably do a similar analysis on how many SMS to buy, but I don't have the numbers to do it now.