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The Bottom Line

Your cell phone isn't just for talking anymore. If you utilize data services, be sure to search for bundled or flat rate pricing to avoid any billing surprises or data overages.

What is a data service on a cell phone?

A data service is the amount of mobile data that you are allotted on your mobile carrier's network. Data can be used for mobile apps, multimedia messaging, streaming services, and more. Your overall data consumption (and how much you need for your cellular plan) depends on your usage habits.

The price-per-minute to make wireless calls has fallen rapidly over the past several years, putting downward pressure on wireless bills. That's good for consumers, but bad for wireless carriers and their investors, who look at “average revenue per subscriber” as an important measure of how well the company is doing.

To reverse this trend, carriers are counting heavily on data services to generate additional revenue. These include things like messaging, music, information, e-mail, and ringtones. Unlike voice services, which have become fairly easy to compare, each carrier is packaging these newer services in different ways, at different prices, with different brand names. Further complicating things is the fact that not all phones have the same data capabilities, and that many of these services (e.g., games or ringtones) can often be purchased from a third party, and billed through your carrier. It can be quite confusing, and likely will continue to be for the foreseeable future.

In the next few paragraphs, we discuss the most important data categories. Review the optional features on the rate plan you are considering, as this will tell you what combinations are relevant for the carrier and the phone.