How to save on mobile plans: Your guide to 16 no-contract carriers
Tired of dealing with AT&T, Sprint, T-Mobile and Verizon Wireless? We tell you about some good alternatives.
By Rick Broida
April 24, 2014 06:30 AM ET
Computerworld - The mobile-phone industry is in a state of flux. Where once you had little choice but to buy a subsidized phone from a major carrier and pay two years' worth of whatever monthly fees it chose to levy, now you have options aplenty.
For example, that two-year contract? Now you can bypass it and purchase an unsubsidized, unlocked phone -- including such leading-edge models as the Google Nexus 5 and Motorola Moto X.
After that, you have several choices. Three of the Big Four carriers -- AT&T, Sprint and Verizon Wireless --have started offering off-contract plans alongside their two-year contracts, while the fourth, T-Mobile, has doffed the contract system completely.
But wait -- there's more. You are no longer stuck with one of the Big Four -- you can take your current post-contract phone to another carrier offering better rates. You can also get both a new phone and a different plan from one of a growing number of smaller outfits promising to go easier on your wallet.
For this story, we look at 16 of those smaller carriers -- also known as mobile virtual network operators, or MVNOs. These services provide voice, messaging and data for your smartphone -- usually at lower monthly costs and with less hassle.
(Note that although there are perhaps a dozen more similar "Off Broadway" carriers, we chose a cross-section of both new and established companies as representative of the industry as a whole.)
Most of them do this by leasing Big Four bandwidth and tweaking the typical monthly-plan formulas. (A few, like Boost Mobile, are actually owned by a larger carrier.) Some leverage other tech, like Wi-Fi and voice-over-IP, to offer lower rates. Some do both. And most let you bring over an existing phone, great if you're looking to extend the life of handset that's already bought and paid for.
Bring your own phone -- or use theirs?
Suppose, for instance, you have an iPhone 4S that just reached the end of a two-year contract with AT&T. It's a common misconception that you need to stay with the same carrier and pay the same monthly rate -- even if you don't feel the need to upgrade to a new phone. AT&T and T-Mobile phones, both of which run on GSM networks, can be unlocked and taken to any other carrier that piggybacks on one of those same networks.
So instead of continuing to pay AT&T, say, $80 per month to use your iPhone 4S, you could take it to Giv Mobile or Straight Talk and pay a lower rate -- no contract required.
This Bring Your Own Device (BYOD) option gets a bit more complicated with CDMA phones from Sprint and Verizon. Although several MVNOs piggyback on Sprint's network, not all welcome outside phones. And the one carrier that leverages only Verizon's network -- Page Plus Cellular -- doesn't officially support phones purchased from Verizon proper.
Indeed, you'll often enjoy more and better options if you're willing to buy a new phone. Many of the no-contract carriers sell handsets directly -- and even if you pay more upfront, the lower monthly rates make the math work in your favor relative to the higher rates charged by a Big Four carrier (or the two years you'd be locked into a contract).
You get what you pay for
Sounds great, right? Here come the get-what-you-pay-for caveats: MVNOs don't always deliver the same features and coverage as their Big Four brothers, despite operating on the very same networks. Virgin Mobile, for example, lacks the roaming coverage afforded by Sprint, and Straight Talk iPhone users don't get visual voicemail.
Then there's data. All the "starting at" prices listed in the carrier descriptions that follow include at least some data in their plans. However, as is the norm these days, virtually all the carriers will cap your throughput at a certain point, giving you X-amount of 4G speed and then dropping you back to a slower rate of throughput (with some still claiming "unlimited" data). In other cases your plan may include only, say, 500MB of data, period, after which you'll pay per-megabyte overage charges.
If you're wondering how much data you really need, a 2013 Nielsen study revealed that the average U.S. smartphone user consumes 733MB per month. So even if you're slightly above average, a 1GB data plan might be more than sufficient. It might be worth monitoring your usage for a month or two to find out. (If you find you're getting close to your maximum, or that you're paying for more than you need, you can always change your plan -- and most MVNOs make that relatively simple.)
While you're reading the fine print, you'll want to see whether your plan includes things like picture messaging (MMS), visual voicemail, mobile hotspot (a rarity among MVNOs), number porting and short-code messaging. This last is used to deliver everything from Amber Alerts to boarding passes to Starbucks deals, but a few carriers (including Republic Wireless and UppWireless) don't support it. Figure out what's important to you, and what you can do without.
Interested in seeing what the little guys have to offer? What follows is a descriptive list of 16 MVNOs that may offer you a better deal.