New Wal-Mart Cell Phone Deals Offer Value To Some

Wal-Mart will soon compete with the major cellphone networks by selling its own calling plan. The world's largest retailer will offer exceptionally low rates on voice calls and texts, though its data charges may be too expensive for many users.

The chain will be acting as a virtual operator, meaning it licenses bandwidth from a mobile network (T-Mobile in this case), and resells it to customers. Its plan, dubbed "Family Mobile", costs $45 a month for one line and $25 a month for each additional line, with unlimited US calls and texts.

That's substantially lower than what major networks currently offer for similar deals. In fact, it's $15 lower than T-Mobile's own unlimited use deal. Given that it's paying a license fee to T-Mobile, it's easy to see that Wal-Mart will be running at a very low profit margin. The plan appears to be to make the money through volume of sales.

No Credit Checks Required

Although the new Walmart plans are postpaid (meaning customers get a monthly bill), there are no minimum terms or cancellation fees, so customers can cut the service at any time. This means there's no need for credit checks, which should be attractive to both shoppers on lower budgets and to impulse buyers.

Wal-Mart Cell Phone Plan Caveats

There are some catches to the Wal-Mart cell phone plan, however.

The service is only available with specific handsets sold by Walmart and, while customers can cancel at any time, the phones cannot officially be transferred to other networks, including T-Mobile itself. It's possible that unofficial modifications may allow this.

The handset costs range from $35 to $249 and are generally cheaper than buying through other retailers without a service contract. (Source: google.com)

Pricey Data Plans Could Hurt Enthusiasm

It's the data costs that may be off-putting to some users, however. Both data use and international calls are charged from a separate allowance that is paid in advance. The data allowances start at $40 for one gigabyte, compared with $30 for unlimited use with T-Mobile. (Source: arstechnica.com)

The big advantage with the Wal-Mart deal is that the data allowance lasts until it has been used up entirely, rather than expiring at the end of the month. It can also be shared across multiple handsets on the same account.

Considering only one of the handsets on offer at launch is a true "smartphone," this limit may not be much of a problem to some users: for a family that runs two or more phones with occasional Internet browsing, the $40 fee is reasonable value. For anyone needing more data access, the package won't be adequate, which may limit plans to add more smartphones to the Wal-Mart service.