Why your cell phone bill is going up

Demand for wireless data services is soaring, forcing carriers to invest massively to keep up.

They have two main options: Upgrade their network technology or acquire more wireless spectrum to give them more bandwidth. Both approaches cost billions. AT&T led its rivals by spending $95 billion over the past five years upgrading its network. Verizon just agreed to pay $3.6 billion for a small but tactically significant bundle of spectrum from a group of cable companies. Those expenses are getting transferred to you, the consumer.

"The insatiable thirst for mobile broadband is going to force all of us to pay more," says Dan Hays, a partner at PricewaterhouseCoopers' consultancy. "Phone bills are going up." The price creep is already happening. AT&T instituted a $5 across-the-board price hike in January for new contracts, and Sprint raised its monthly smartphone rates by $10 a year ago.