Get Your Prepaid Mobile Phone Plan As Cheap As Possible: Four Tips To Save Hundreds!

2013 03 28 23.22.25   Get Your Prepaid Mobile Phone Plan As Cheap As Possible: Four Tips To Save Hundreds!In the United States, T-Mobile made history by becoming the first cellular carrier to not force customers into buying multi-year contracts. After the policy shift, T-Mo users can purchase subsidized prepaid mobile phones independent of a monthly fee. The other three major carriers, however, have not yet followed T-Mobile’s lead.

As written in the past, Mobile Virtual Network Operators can save all cellular users money. However, hundreds of MVNO plans exist—how do you know what plan best suits your needs? To find out, take four steps: First, find out what network fits your needs. Second, collect information on how you use the phone’s data, voice and text features. Third, analyze the various plans offered by MVNOs and T-Mobile for one that fits your usage patterns. Fourth, and optionally, determine whether or not you should buy a new phone or keep your old model. Our smartphone review and buying guide may be able to help with that.

2013 03 28 23.18.23   Get Your Prepaid Mobile Phone Plan As Cheap As Possible: Four Tips To Save Hundreds!

Step 1: What Network Do You Prefer?

There exist three basic kinds of cellular networks in the United States: GSM, CDMA-Sprint, and CDMA-Verizon. Your phone is compatible with only one of these and, with few exceptions, may not jump across networks of differing technologies. For example, if your phone originated with Sprint, it remains locked into the Sprint network, or an MVNO renting spectrum from Sprint. On the other hand, if your phone uses GSM, simply changing the SIM card allows you to swap networks.

In most countries, if you want to change carriers, you simply change the SIM card—unless the phone uses CDMA technology. The popularity of GSM technology around the world permits interoperability. While CDMA exists internationally, such implementations typically hover near the bottom of popularity. In India and United Kingdom, for example, CDMA carriers operate near the base of the scrap heap.

In the United States, here’s a list of all the major MVNOs. And for those looking to explore T-Mo’s newest lineup of pre-paid plans, you can find them here. A note of caution: Consider avoiding any post-paid plans. For MVNOs elsewhere: Canada, India and the United Kingdom.

A note on India: Because of the existing state of infrastructure, Indian MVNOs may not offer substantially better rates than major carriers.

Step 2: What Do You Use Your Phone For?

Cellular companies bill customers loosely in four categories—data consumption, talk time, SMS and MMS. For consumers using major carriers, limited plans come associated with heavy overage charges.  On the other hand, MVNOs simply cut service off until the customer adds additional funds, making them perfect for children and teenagers. While some customers would prefer the overage charges, most would like to add more money and change to a cheaper plan.

Consequently, it pays to know exactly the kind of mobile activity you use most, which can make a plan from an MVNO extremely cost effective. For example, the average consumer uses hardly any data at all, falling far below whatever their quota (or data cap) permits. However, they often at times pay for unlimited data plans, which come with a very large price premium. Some studies show that the average consumer uses roughly less than a gigabyte of data, while their plans permit unlimited use. Clearly, a better tailored plan could save money—over the course of a year, such savings could climb into the hundreds.

Cell companies also associate certain fees with many forms of limited plans. For example, some plans offered by Virgin Mobile charge a one-day access fee for using any feature of the phone. Personally, I prefer not using some of the more complex and difficult to follow billing schemes. A straightforward plan makes it easier to plan around and reduce costs.

A variety of methods exist for tracking your usage statistics: Logging into your cellular provider’s online account will display exactly how your phone has been used. Simply search for keywords such as “account activity” and note the kind and amount of mobile items consumed.

Another method is to use an app. Android supports a substantial number of apps which can monitor your usage statistics.

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Step 3: What Kind of Plans Are Right For You?

Keep in mind that cell companies use different names for each service that they offer for branding purposes. Beneath the surface, however, cellular service providers offer three basic kinds of plans:

  • Limited: These plans permit users to consume a limited number of voice minutes, data or texts. Some versions of these plans fall somewhere between an unlimited plan and a limited, where some kinds of activity are limited whereas others are unlimited. T-Mobile’s newest lineup of plans offers an excellent example—100 minutes of talk time and unlimited text and data.
  • Unlimited: Unlimited plans charge a monthly fee and provide unlimited data, voice and text usage. However, a recent innovation by cellular providers capped the total amount of data that can be used. Most carriers reduce the speed of your connection to 2G speeds once a certain data threshold passes. The standard cap for MVNOs hovers around 2 gigabytes, however, some MVNOs such as Solavei offer truly unlimited data plans.
  • Pay-Go: These sorts of plans charge based purely on usage; for every minute of talk, byte of data or minute consumed, there’s an associated fee. Two kind of pay-go plans exist. When purchasing minutes, make sure you know that some minutes expire after a certain amount of time elapses. Some plans converting your money into points—a tactic intended to confuse consumers. All pay-go plans require a constant influx of fresh money to keep the service active—this sounds expensive, but for low usage patterns, pay-go offers the lowest total rate. Pay close attention to service expiration and total balances. Balances represent the amount of usage whereas service expiration refers to how long you have until new money must be added to the account.

Personally speaking, as someone who uses his phone very little, pay-go plans provide the cheapest option for those who rarely use their phones. For higher usage patterns, limited plans start becoming financially feasible. Finally, at the highest end of the consumption pyramid, unlimited plans start making sense.

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Step 4 (optional): What Kind of Phone Do You Have?

The kind of phone you own might influence which prepaid, MVNO carrier you migrate to. For example, those who don’t use smartphones shouldn’t migrate to an MVNO plan that includes unlimited data.

Keeping an old phone comes with some disadvantages, as well. It will limit the number of carriers that you can move to, because of technological barriers. As mentioned previously, if the phone hailed from Sprint or Verizon, it will work only on that network.

Also, keep in mind that not all MVNOs allow you to bring your own device.

Smartphones have some advantages that dumb phones do not have. For example, it’s possible to use VOIP apps to use a WiFi or data connection as a means of free communication. Justin Pot, in fact, wrote an excellent article on this subject. If Skype isn’t your thing, Chris Hoffman covered a different app for the same purpose: Talkatone.

A very common method of saving money is to combine T-Mobile’s $30-a-month plan, which comes with limited minutes, with a VOIP app. This effectively gives the user an unlimited plan at a fraction of the price.

Conclusion

Several of my friends commented on my last article, mentioning that they were unaware that so many kind of MVNOs and plans exist that it’s impossible to figure out which plan is right for them. Hopefully, this article helped to explain how to determine which plan will work for you.

Image Credits: Person Using Cell via MorgueFile.com; Kid with Spyglass via MorgueFile.com; Cell Tower via MorgueFile.com; Cell Phones via MorgueFile.com

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One Comment -

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CTownBOS

THanks!! Awesome article