Smartphone service for $30 a month? Yes, please

By JR Raphael (@jr_raphael)

I've been spending a lot of time researching prepaid smartphones lately, and I've gotta say: There's a whole world of possibilities out there most of us have never considered.

Smartphone Money

For a long time, the prepaid phone market was a place for folks to find low-cost feature phones with contract-free plans. And that segment of the market still exists. But alongside it now lives a huge range of other options -- options for people who are interested in using smartphones but not interested in those big-carrier plan prices. I don't know about you, but I'd say that sums up the majority of people I talk to.

Now, I know what you're probably thinking: "But what about the devices?" That was my first thought, too. And it's true: The bulk of the phones you'll find on U.S. prepaid carriers aren't hot, top-of-the-line devices like the HTC One X or Droid Razr Maxx. But don't let that cloud your perception of the possibilities.

You see, there are essentially two sides to the prepaid smartphone market. First and most visible is the side that lets you buy a phone off-contract and use it with reasonably priced service. If you don't have to have the latest and greatest in mobile technology, this might be a good path for you; while you won't find a top-tier phone in the prepaid device selection, you will find some pretty decent midrange choices.

The other side, though, is even more interesting. It's the side that lets you bring in your own device and use it at prepaid plan prices. Prices like 30 bucks a month -- a flat rate with no sneaky fees or unexpected overages.

That's what John Bowdre did. Bowdre's an IT manager and avid Android fan I know from Google+. He told me how he's using a Galaxy Nexus on T-Mobile's network, paying just $30 a month for service -- and quite frankly, I was a bit miffed I hadn't thought of (and done) that myself.

Bowdre bought his Galaxy Nexus unlocked and unsubsidized from for about $560 (you can find the phone for anywhere from $450 to $600 nowadays, depending on what deals are around when you look). Doing his homework, he knew that T-Mobile lets customers use any compatible device with its Monthly 4G prepaid service -- something other prepaid carriers don't allow. So Bowdre took his new Nexus, signed up for service with T-Mobile, and got himself up and running in no time.

For $30 a month, he's now getting 100 minutes, unlimited texting, and 5GB of 4G (HSPA+) data. The closest equivalent on Verizon -- 450 minutes a month, 5GB of 4G data, and unlimited texting -- would cost nearly four times that amount. Even factoring in the unsubsidized cost of the phone, Bowdre's saving nearly $1700 over two years' time. Not too shabby.

Now, this kind of setup won't work for everyone. Most notably, you're more limited on minutes, both because of the smaller monthly pool and because of the lack of free nights, weekends, and mobile-to-mobile calling provided with prepaid plans. If you can swing it, though, man -- that's an awful lot of savings.

Bowdre, by the way, deals with the lower monthly minute limit by using a VoIP app to make calls from work and home; he also keeps an extra prepaid balance on his account so he can use additional cell minutes if he needs 'em. T-Mobile charges 10 cents a minute if you want to go over your monthly prepaid-plan allotment, so you're basically looking at an extra 10 bucks for every extra hundred minutes you use -- all paid in advance, of course.

Like I said: It's a world of untapped possibilities. And learning about it certainly got me thinking.

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So is prepaid the answer for you? There's plenty to consider -- both good and bad -- before making the decision. But at the very least, it's well worth investigating.

And hey, good news: I've done the legwork for you. For the full skinny on prepaid smartphones (including more about John Bowdre's bright idea), check out my in-depth report:

Cut the contract: How prepaid smartphones can save you money

JR Raphael writes about smartphones and other tasty technology. You can find him on Google+, Twitter, or Facebook.

Article copyright 2012 JR Raphael. All rights reserved.

Copyright © 2012 IDG Communications, Inc.

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