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Is it Time to Ditch Your Cell Phone Provider? Comments

  • By Jordan Shapiro
  • March 13, 2013

woman on bench with phone

You’ve probably seen commercials or driven by billboards for smartphone companies that promise “unlimited text, talk, and data” for considerably less than you’re paying with the big phone companies.

Are these deals for real? And even if they are, would it be worth switching phones?

It could be. These companies can offer full service plans at a much lower cost because they require you to buy a phone upfront, at full price. But you’ll pay less—often a lot less—each month for service.

By contrast, the big mobile service providers like AT&T, Verizon, and Sprint sell you the phone at a loss, and then make it up over the course of your contract with hefty monthly fees.

Even with the full price of the phone factored in, you’re likely to come out way ahead over the long run if you pay upfront. In fact, using one of these prepaid companies could save you as much as $500 to $1,000 a year—without sacrificing features of coverage.

Here’s the skinny on four popular providers. Be sure to check the coverage in your area before you jump in.

  • Republic Wireless is a hybrid service that combines wifi calling with Sprint’s network.

    Cost: $19 per month, for unlimited talk, text, data.

    The downside: Their service is only compatible with one phone, the Motorola Defy XT. The good news is that this $249 phone is super durable: dust-proof, water resistant, and with a scratch-resistant display. Unfortunately, the phone runs an Android operating system that’s somewhat outdated.

    The upside: Most users report that service is good, with occasional problems when the phone switches from wifi to the traditional mobile network. If you can deal with not having the newest, flashiest smartphone, the price can’t be beat.

  • Straightalk uses either T-Mobile’s or AT&T’s networks. You can use almost any phone that’s compatible with either carrier. You order a sim card ($14.99), slip it into your phone and you’re good to go.

    Cost: For $45 per month, you get unlimited text, talk, and data. It can be even cheaper if you buy it in advance: one year is $455 (the equivalent of getting almost two months free).

    The downside: You have to bring your own phone, and “unlocked” top-tier phones are expensive. But the iPhone is available and so are many of the top Android phones.

    The upside: Your overall costs still will be cheaper than a regular contract mobile phone plan.

  • T-Mobile is the best-known name in the pre-paid phone business. But you pay more for the comfort that comes with signing on with a big brand.

    Cost: T-Mobile costs $30 to $70 per month depending on how much talk or data you need.

    The upside: You can go with the least expensive plan—I’ve seen a lot of folks praising the $30 unlimited data and text plan on forums— but it’s an odd set-up, and it only includes 100 minutes of talk.

    Advocates of this plan use a VOIP (Voice Over IP) calling service like Skype to make voice calls, and they rely on text and IM for most of their communication. If you’re not intimidated by the setup, there’s some real savings in this $30 option.

    The downside: If you go with a more standard operating plan for voice/text/data, you pay $59.99, and you’re limited to 2GB of data.

  • Solavei uses the T-Mobile network, so you need an unlocked phone and a SIM card. Solavei has partnered with GSM Nation to offer several phones that are pre-loaded and optimized with a Solavei SIM card and settings, starting at $125.

    Cost: You pay $49 per month for unlimited talk/data/text. But you can offset the cost with their referral system. For every “trio” of customers that you refer, you get $20 per month off your bill. So in theory, you could get paid to use your smartphone.

    The downside: As this CNET reviewer points out, you only get 4GB of data on the 4G network, and once you’re over that cap, you’re “throttled down” to the slower 2G network.

    The upside: Solavei’s unlimited plan is priced comparably to their competitors’ prepaid plans. So if you think you’ll be able to convince enough friends to sign up, the referral model could be an interesting bonus.

Not sure which of these plans is right for you? The great thing about no-contract is that you can switch whenever you want.

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