Are 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.
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.
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.
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.
- 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.
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.