No Longer Tied to a Cellular Contract? 10 Reasons You Should Switch To An MVNO

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A00 cellphone 300   No Longer Tied to a Cellular Contract? 10 Reasons You Should Switch To An MVNOAre you out of contract with your cellular provider? Rather than upgrading your phone, and signing a new contract, consider switching to a mobile virtual network operator, or MVNO. You can save hundreds, even thousands, each year in cellular costs, without signing a contract.

MVNOs offer cheaper rates to consumers by renting spectrum from one of the four major carriers. They function as wholesalers, who purchase bandwidth in chunks from the big carrier networks, and sell at a discount to consumers. Their plans are always prepaid and without obligation, giving consumers freedoms they never knew existed under the big four carriers.

Excuses to dump possessive big brand carriers and their outrageous contracts abound, but here are the leading 10 reasons for switching over:

1. Inexpensive Monthly Plans

The greatest advantage MVNOs offer is in its pricing. While the four major carriers in the US charge approximately $100 a month for a smartphone plan, MVNOs offer the exact same deal for $40 a month.

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2. No Contracts

One of the most unethical behaviors that the big four carriers engage in is offering subsidized phones with inflated monthly fees attached to a two-year contract. These contracts are legally binding, meaning if you violate the terms of the contract, you might be held liable.

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3. More Flexible

Prepaid plans allow for two basic kinds of plans: pay-as-you-go (pay-go) or “unlimited”, which typically throttle data speeds after about 2-3GB of use. Some carriers, such as Ting, offer flexible plans, whereas most don’t have any differentiation between plans other than the pay-go and unlimited.

The key points to keep in mind – first, look at the minimum payment required to keep the account active. Second, look at the rates for each category of service, such as price per text and price per megabyte of data. Third, make sure your plan doesn’t come with an expiration date for minutes, otherwise you won’t get rollover after a certain period of time. All three of these points should meet your current needs.

4. Minutes Roll Over

In a contract plan, consumers get caps on minutes and texts. Any activity over the cap and an outrageous overage rates gets applied.

Perversely, any unused minutes, data and SMS at the end of the month disappear. In comparison, prepaid carriers that provide the pay-go option allow their customers’ minutes to accumulate, if unused. These minutes roll over to the next month Because of rollover, prepaid phones are commonly used as emergency lines or as burners.

5. No Invasive Credit Or Social Security Number Snooping

Unlike the major carriers who force customers to sign binding contracts, prepaid carriers collect hardly any customer information at all. So, instead of forking over your social security number, date of birth, address and more, you only provide cash and your name.

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In the event of a security breach of their systems, your personal information is protected. Additionally, the payment process for prepaid phones is extraordinarily simple and flexible. Customers aren’t even required to keep a credit card on file! These features make prepaid phones useful for staying off the grid, as well.

6. You Can Port Your Old Number Over

Thanks to the FCC, US law requires that cell phone operators allow for “local number portability”. As long as a customer remains in one locality, he can switch cellular carriers and maintain his phone number.

7. Same Plans, Cheaper Prices

A common misconception that consumers have about prepaid carriers is that they offer poorer quality service than large companies. This assumption is patently false. MVNOs operate on whichever large network leases them spectrum. Ptel, for example, rents bandwidth from T-Mobile. However, T-Mobile cheapest individual plan, with data, costs nearly $90 per month. Ptel’s nearly identical plan costs $40 per month, off-contract.

8. Bring Your Own Device

Some MVNOs allow customers to port over their own unlocked device, rather than forcing them to buy locked down phones. However, GSM phones cannot work on a CDMA network and vice-versa. Also Sprint-CDMA and Verizon-CDMA phones aren’t inter-operable. A good rule of thumb is to check with your prospective network before buying a SIM card or consider an unlocked phone.

9. OS Agnostic

Prepaid carriers for the most part don’t differentiate between the iPhone and Android handsets. Meaning, you can get the iPhone 5, unlocked, from the Apple store for $700.

After calculating the price of an unlimited plan with a two-year contract, you actually save almost $1,000 by going with an unlocked iPhone 5 and an unlimited prepaid plan.

10. Ethical

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Reusing older phones prevents mercury and other toxic chemicals from leaking into landfills. Aside from saving money, it’s also environmentally friendly.

Recommendation

  • For GSM, I suggest either Straight Talk or Ptel. As mentioned previously, Ptel’s rates can’t be beat, although Straight Talk’s plan does compete.
  • For the Sprint-CDMA network, you can’t go wrong with Ting. Flexible plans, reasonable rates and BYOD make Ting a solid choice for Sprint-CDMA.
  • For the Verizon-CDMA network, it seems that PagePlus offers the best deal. Because PagePlus rents space from Verizon, it also has the same quality.

Conclusion

Considering the huge advantages that MVNO networks have over the big four networks, there’s very little reason not to switch over. The extraordinary savings alone, which can reach thousands of dollars, justify a switch.

Anyone out of contract, or purchasing a cell, should consider an MVNO.  Let us know in the comments if you’ve done so, and whether or not you’re happy with it.

Image Credits: Cellphone via MorgueFile.com, Money via MorgueFile.com, Chains via MorgueFile.com, Evil Grin via MorgueFile.com, Dumpster via MorgueFile.com

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37 Comments - Write a Comment

Reply

Richard Borkovec

I went from Verizon to Straight Talk (bought a TMobile Samsung Galaxy Exhibit, unlocked it), and couldn’t be happier. I get AT&T’s coverage, and unlimited everything for $45.

Reply

yitzyy

You skipped Virgin & Boost, which seem to be cheaper than Ting. Is there any specific reason?

Kannon Yamada

Thank you for mentioning Virgin! I was fortunate enough to pick up two of their $25 per month unlimited plans two years ago. The price has since gone up to $35 for the same service but their service remains one of the best on the market in terms of customer service and pricing. Although Ting is actually a more flexible and cheaper service, it’s a comparable service.

What put Ting over the top for me, though, was that they allowed customers to bring their own Sprint phone and refund unused minutes. Most other prepaid, MVNOs do not have the same policies.

Boost charges around $50-60 for what Ptel and StraightTalk charge $40-45. The differences are in the data caps. Ptel has a 250mb soft cap and StraightTalk has about 2GB before getting capped. I think Boost had something in the 2-3 GB range. It’s CDMA-Sprint, and they’re also BYOD (Sprint phones only).

One of Ptel’s best features is that they don’t ROUND UP for minutes. So if you talk for 5 seconds, they only charge you for five seconds, not a full minute. They also had the lowest Pay-Go and “Unlimited” plans, although that 250mb cap isn’t for hardcore data users, obviously.

h

Because, virgin, also sister to boost, is the most horrible, god forsaken excuse for a company there ever existed. Period. Speaking with MUCH experience.

yitzyy

Thank you :) That is exactly what I was getting at…
What is so horrible, service/reception or something else?

Kannon Yamada

Virgin and Boost are both on the Sprint network, so it’s the same call quality. Sprint I think is a second tier network and their connection quality varies heavily by region.

Virgin won the J.D. Powers customer service award for wireless carriers. Boost came in second. But in all honesty, they have slipped in customer service quality since selling out to Sprint.

H

Everything!!! Literally everything. Reception, quality, 2nd class devices, and the best part???
You’ll be working off the ‘leftover’ bandwidth/signal from sprints towers that their contract customers receive first.
Yes, you’re literally a second class customer to them.
This comes straight out of the mouths of sprints executive office.
And, good luck ever reaching a rep that can understand you.

Elena Sicconi

that’s great to know, I was about to switch to them!

Reply

Alex Downs

You sir are a saint, I’ve been spending the better part of month trying to think of what would be the best plan when my contract expires.

Kannon Yamada

Hey Alex, thanks for the feedback!

Shockingly, there’s a huge number of MVNO operators in the US.

Fortunately, Prepaidwirelessnews.com does a regular analysis column on which plan is the best. They basically break plans down into “talk minutes and text”, unlimited and pay-go. Check for the recommended links for their picks. Unfortunately, they don’t look at people who want to bring their own device. But that’s understandable.

Reply

Andy Rhine

Any of them allow me to tether?

I am stuck with CDMA only where I live. No GSM within an hours drive.

Kannon Y

That’s a good question. To my knowledge, no MVNO encourages tethering, although some don’t go out of their way to block tethering apps. It’s actually ‘illegal’ for them to charge you for tethering.

By the way, the Nexus series of cell phones supposedly allow tethering by default, although I can only confirm that it works on the Galaxy Nexus. One of its killer features is it masks your identity, preventing networks from blocking you.

Basically, you go to settings -> wireless & network settings -> Tethering & portable hotspot. It’s super easy to configure.

Unfortunately, Google stopped supporting CDMA networks, although there are still unlocked Gnexus out there for the Sprint network.

enoss

We (Ting) allow tethering for free. It is just data usage on your plan. Since we happily show you how to do it, I guess you could say we encourage it.

Reply

R Michael Lacy

Great information. We only use our phones for a few minutes every month. Have been using Boost pay-as-you go, but this might be a good alternative.

Reply

Bruce Casner

I did my research and decided on Consumer Cellular for my GSM phones. They have prices similar to what you mention, and their per minute charges are not bad if you go over. Plus, you can bring your own device (my son just did). And you can adjust your plan as many times during each month as you need to. I set a reminder at the end of the month and adjust my plan to what the usage for that month has been, minimizing my cost each month.

Reply

Jan Corlew

I’ve only ever had the basic flip phone and never a data plan so not really familiar with all of this. It’s great to know these plans are out there, as my cost through Verizon for basic service seems to climb. I’ll be looking to learn more about programs like this to more effectively conserve funds. Thank you so much for the article!
Jan C

Kannon Y

Hey Jan, Prepaidwirelessnews.com classifies your needs as “talk and text” or “voice and text”.

They wrote an article about it here.

But basically, depending on your needs, your monthlies can be as low as $5 a month for a pay-go or as high as $30 or 40 (or more) for an unlimited plan that doesn’t use data.

Reply

Art

Due to the somewhat lacking GSM coverage near my home, I am still stuck using CDMA technology and of the Verizon/Sprint duo, Verizon has always provided me with better coverage. Therefore I have been a very happy PagePlusCellular customer for well over a year now. I have managed to help many people see the savings with prepaid and especially with this particular MVNO in the same time. I look forward to the day they begin offering 4G coverage as well.

Reply

Gaeyle Gerrie-Boss

Wish I had read this before upgrading my old phone to an Iphone5. Is it possible to have an Iphone unlocked post buying?

Kannon Yamada

I’m sorry about that. I should have written this article when the iPhone 5 released.

To answer your question, the carriers require that you fulfill the terms of the agreement first, before they unlock it.

In fact, your phone is locked in such a way that prevent you from changing networks. Some of these locks can be hacked, but it may be illegal to do so, since it violates the terms of your agreement with the carrier.

So, yes, but it’s in violation of the law.

Reply

Tony

Thanks for the informative article Kannon!

I’ll be signing-up with an MVNO once I’m “unshackled” from my current contract in June. I wouldn’t have considered this option without someone like you looking-out for us consumers.

Reply

Moni

Hello and thank you so much for your article. My husband and I have iPhones.
Is it possible to do this now, after the new “it is illegal to unlock phones bill”?
We have the iPhone 4. Our carrier is AT&T.

Kannon Yamada

That’s a really good question.

The “bill” (it was a ruling by the uhh head librarian at the Library of Congress) targets companies that specialize in unlocking subsidized phones, still under contract, but it has the side effect of allowing carriers to refuse to give you an unlock code even if you have fulfilled the contract. You can still request that they unlock your phone, but now that they can legally refuse you, I don’t see why they wouldn’t.

If you have fulfilled the terms of your contract, you can still request a carrier unlock code from your cell company. Just tell them you are traveling overseas and would like to temporarily change providers. They logically have no reason to not give you the unlock code.

Reply

Aaron W

I switched to a T-Mobile pre-paid plan that is $30/month with 100 talk minutes and unlimited data and text. I already have everyone call my Google number, so since I’m usually at my PC all day, I can just answer it on the PC within Google. I have yet to get anywhere close to breaking the 100 minutes a month. I try to make all my outgoing calls from Google Voice also so the actual talk minutes I need is greatly reduced.

Reply

PalTech66

Don’t know why you’d recommend Ting on the Sprint-CDMA network when Virgin Mobile (VM) is a LOT cheaper!!

I just switched from Sprint to VM and for $45/mo (no surcharges) I get 1200 anytime minutes, unlimited text and ‘unlimited’ data which is actually capped at 2.5GB when using 4G (unlimited on 3G).

At Ting you’d pay $74/mo. for less: 1000 min. / 2000 text msgs, / 2GB data, PLUS unspecified ‘surcharges’!

You should do more research before making recommendations!!!

Anonymous

Glad you asked. Ting is BYOSD – bring your own sprint device and its lower end plans are cheaper than Virgin’s. It’s a mid-range service, suitable for a wide variety of customers.

I don’t think anything beats Virgin’s 300 minutes unlimited data plan for $35 or $45 a month, combined with their customer service and lavish replacement plan. However, you can’t unlock the vast majority of VM phones, so any phone you buy from them stays with them. If you usage pattern ever changes, you may be stuck inside a contract that costs a lot more than you consume.

I was a longtime VM customer – from 2006 until last month. I had the $25 a month unlimited plan (3G only). However I only used about one or two minutes of voice a month and maybe 20 megabytes of data. After doing the math, a PayGo seemed the best deal.

Reply

Elena Sicconi

What timing! I have been looking to switch from my (liked but) expensive sprint plan because I love the unlimited data but not the bill, and this helped a TON! That, and in the comments found that my initial plan to go to Virgin should be reconsidered..

Kannon Yamada

Elena, I just read the comment up top about MVNOs not offering as good a service as the major carriers – that’s mostly a rumor to my knowledge. Some MVNOs don’t offer data roaming or other services, meaning your data connection won’t be as good if you go traveling.

Here’s the thing: the spectrum-sharing agreement between many major MVNOs and major carriers guarantees equal service. That means data, voice and SMS delivery are identical to that of the major carriers.

There are some exceptions – I believe Ptel doesn’t allow data roaming. There’s a few others in the same boat as Ptel. But otherwise their service on the whole equals that of the major carriers they’re based on.

Ting and Virgin Mobile, I’m pretty sure, have 100% access to the same call quality as on the Sprint network. However, if you plan on using their ETF airtime rebate program, be sure to speak to a rep first, before signing up. It can be very tricky switching over due to some of the various conflicts going on within our legal system.

Elena Sicconi

Ah, I see. I mostly am just frustrated that I pay so much for what essentially is only a data plan… I seldom use voice minutes and texting I can do through Google Voice. If only my iPad was more convenient as a phone….

Reply

Alastair Crombie

Is this relevant to the United Kingdom or just the USA?

Kannon Yamada

Hello Alastair, the article still applies to UK MVNOs – although the UK has cheaper rates overall than in the US. The UK also has different MVNOs.

‘http://www.prepaidmvno.com/mvno-companies/eu-mvno-companies/uk-mvno-companies/

Reply

Ron Harper

I switched my son from the Verizon family plan to “Straight talk” and has been using it for the past 3 months. A couple reasons he has it is, like everyone else was to save money, and also for web access. When looking at Verizon data plans as well as the other major carriers it only seemed to make sense to switch him to that. I don’t understand the reasoning behind the “data” plan cost. Could someone enlighten me on this? Why do the major contract carriers “have to” charge such astronomical prices when the other non contract plans add it at virtually no cost?

Kannon Yamada

Everyone should ask that question, Ron.

The way major carriers overcharge is through luring customers in with high-end phones that only they carry. They create the false notion in the minds of consumers that $80 a month is the right price for a smartphone contract.

But anyway, the best example of this is the iPhone. When it came out consumers had no idea how much data plans were actually worth. They also had no idea how much the iPhone cost unlocked. Because people had no accurate measures of comparison for how much to pay for data, $80 became the established market price.

Reply

Sylvia McGowan

Are there any MVNIO’s in Canada? Looking at buying an unlocked cell phone … have never had a cell phone so am very new at this. As well, what are the best cell phones? Want easy to use, touch screen … am legally blind so don’t want any little keys.

Kannon Yamada

There are! Canada has the same shady cell phone scams as we have in the US. Contracts should be illegal.

One of the better cell phones for the visually impaired is the iPhone. Fujitsu is also working on a new kind of smartphone with enlarged icons, but it’s not available in Canada or the US.

Anyway, I looked at a number of Canadian MVNOs. You have among the worst prices in the west. It’s really bad!

Anyway, I like Virgin Mobile and Koodo because of two reason – price and phone selection.

If you are entirely new to smartphones, I suggest trying out an older version of the iPhone, such as a 4 or 4S. If you don’t like it, you can always resell it. The companies I mentioned may have some kind of return period, although I do not know for certain.

You may want to look at each individual carrier for a plan that best suits you, though:

http://www.prepaidmvno.com/mvno-companies/north-american-mvno-companies/canadian-mvno-companies/

And if you have any more questions, check out my article on how to get setup with an MVNO:

http://www.makeuseof.com/tag/the-future-is-prepaid-how-to-save-hundreds-on-your-mobile-phone-bill-in-3-easy-steps/

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