The Future Is Prepaid: How To Save Hundreds On Your Mobile Phone Bill In 3 Easy Steps

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save money on mobile phone billCutting your mobile phone bill in half takes only three simple steps – first, find a carrier that offers discounted plans, such as an MVNO. Second, get an unlocked phone. Third, and optionally, you can optimize the phone’s functionality to cost less. Some start-up costs apply, but the overall savings will greatly outweigh the expenses.

To illustrate the simplicity of switching to an Mobile Virtual Network Operator (MVNO), this article documents my experiences buying an unlocked phone, migrating to a cheaper plan and then optimizing my phone for inexpensive operation. While your savings with this technique might vary, the average user can cut their bill in half.

Three requirements:

  • First, you must not be under contract with a mobile phone carrier.
  • Second, you must either have an unlocked phone or purchase an unlocked phone.
  • Third, you must live within an area covered by your selected MVNO.

save money on mobile phone bill

Step 1: Choose An MVNO

An MVNO simply rents broadcast spectrum from one of the four major carriers. Because of technological differences between networks, AT&T and T-Mobile phones use the internationally popular GSM technology. Consequently, their phones are inter-operable, so AT&T phones work on T-Mobile and vice-versa. Also, changing the SIM card will change carriers.

Conversely, if your phone originates with Verizon, it will only work with networks that lease space from Verizon. Similarly, if your phone hails from Sprint, it will only work with an MVNO that leases space from Sprint. While both these networks use the same cellular technology, CDMA, their phones do not always function on each other’s networks, although exceptions exist.

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MVNOs offer three kinds of plans:

  • Pay-Go, where customers pay for every minute of talk, each text and megabit of data consumed.
  • Unlimited plans charge monthly fees permit unlimited use of talk and text, but then reduce the speed of data transfer after the customer reaches a cap. Most plans permit 2-3 GB of data before throttling data.
  • Limited plans provide limited minutes, text and data for a set monthly price.

I will only cover four MVNOs, for brevity:

  • PagePlus, which is a Verizon-CDMA operator, allows all Verizon and Alltel postpaid phones onto their network. Unfortunately, they ban certain models of phone, such as the iPhone. Although reported that PagePlus does not block iPhone activations. If call quality ranks among your most important requirements, PagePlus offers the best per-dollar deal for Verizon-CDMA phones. Some Sprint phones will work on with PagePlus, but I would caution against even trying without strong assurances from a PagePlus rep.
  • Straight Talk currently offers the best unlimited plan for GSM phones – they charge $45 a month for unlimited talk, text and data. However, they cap their data at 2 GB, at which point you get throttled. Fortunately, their throttle speeds seem to restrict the least of all MVNOs.
  • Ting, a Sprint-CDMA MVNO, offers customizable plans, best suited for moderate users. They recently offered prospective customers on big networks an incentive to break their contracts. Ting will compensate you for your Early Termination Fees (ETF), with airtime up to $350 in value.
  • Ptel (PlatinumTel) for GSM offers both a competitive unlimited plan and the best Pay-Go rate among all major MVNOs. Personally, I prefer Ptel’s simple Pay-Go plans and straightforward billing.

As mentioned previously, MVNOs fall into three categories:

  • Global System for Mobile Communications, or GSM;
  • Verizon-CDMA;
  • Sprint-CDMA. It’s important to note that GSM phones come equipped with a SIM card. CDMA phones do not have SIMs and can only operate on the network that it has been programmed to operate on. So a Verizon-CDMA phone will only work on a Verizon MVNO, such as PagePlus.

save money on wireless bill

SIM cards: GSM technology, which powers phones from T-Mobile and AT&T, also dominates the global market. The carrier-issued SIM, on an unlocked phone, can swap for a SIM from another network. For example, if you own a phone from AT&T and want to switch to T-Mobile, simply replace your AT&T SIM with one from T-Mo. Of course, you must first purchase the SIM from the carrier you want to switch to, first.

It’s also important to note that different sizes of SIM cards exist: nano-SIM (4FF), micro-SIM (3FF) and the regular sized mini-SIM (2FF). Despite their differing form factors, all SIMs can interchange for one another using adapters or by cutting away excess plastic. Christian elaborates on the conversion process here.

Example: my MVNO only offers mini-SIM cards and my Nexus 4 only accepts a micro-SIM. This necessitated my cutting away the excess plastic using a cut-away template and some sandpaper for the SIM’s rough edges. After chopping it down to size, the modified card fit perfectly. However, using a SIM card cutter offers an easier solution. Converting back, while somewhat unreliable, only requires a converter.

save money on wireless bill

Step 2: Choose The Right Phone For Your Service Plan

Reusing your old phone will save the most amount of money. After your contract expires, call your carrier and request that they unlock your phone for use on another network. While the law regarding cell phone unlocking did change, and not in our favor, the major service providers should still provide unlock codes for their out-of-contract customers.

Speaking of unlocking, the single best unlocked phone, for the money, is the LG Nexus 4. At the $299 (8 GB) and $349 (16 GB) price-points, no phone offers similar value. However, Google only offers the GSM version. Therefore, if you are dead-set on migrating to a Sprint-CDMA or Verizon-CDMA MVNO, you may want to consider buying an unlocked phone directly from the MVNO or perhaps trying Ebay or Craigslist. Remember to only buy an “unlocked” phone.

Example: I purchased a Nexus 4, and then modified the Ptel mini-SIM to fit into a micro-SIM slot. After some sanding, and bandaging of my bloody fingers, it finally fit.

save money on wireless bill

After recovering consciousness, I activated my airtime card over the Internet, which required an active signal. I had to run outside in order to receive the activation confirmation because my phone doesn’t receive a reception inside my apartment. This issue appears more frequently with GSM phones.

With Pay-Go, you must purchase the airtime in separate chunks. Some plans refer to this as a “Top-up” card. These “cards” contain credits or dollar amounts and generally the greater amounts of airtime purchased, the greater your benefit.

Example: For Ptel Pay-Go, I purchased $100 of airtime. Unlike with their $5 a month plans, this airtime never expires. If you elect to purchase in smaller amounts, the minutes purchased expire after a year. Also, all Pay-Go accounts require that you continually feed money or your service will expire.

wireless phone bill

Step 3: Optimize Your Phone For Pay-Go Or Limited Plans

If you select the Pay-Go option, where you pay for each SMS, megabit and call, you should consider optimizing your phone’s data consumption. The single best method requires turning off your data connection and using WiFi as much as possible.

Another method for reducing phone costs would be to setup a VOIP app and install Google Voice.

VOIP + Google Voice: A VOIP app will allow you to use a WiFi connection as a phone, bypassing the costs imposed by MVNOs on voice communication. On the other hand, Google Voice allows you to receive text and voice messages either through a 3G/4G connection or though WiFi. Here’s a great guide on how to optimize your phone for Google Voice.

Data management: To easily switch off your phone’s data, you can either use a widget or pull-down menu. Alternatively, you can shut it off manually:

  • For Android, go to settings and then choose “Wireless & networks”.
  • Next, choose “Mobile Networks“.
  • Finally, uncheck “Mobile Data”.

save money on mobile phone bill

iOS also permits shutting your data connection off. For the iPhone, this method offers the best solution.

After turning off data services, you will enable data when required, rather than leaving it on all the time. If you fail to do so, and have a Pay-Go or limited data plan, you will pay substantially when apps transfer data in the background.


In a previous article I explained that MVNOs can save all cell users huge amounts of money. This article sharpens that point by explaining, step-by-step, how to save hundreds. It’s essentially two or three steps: First, get a prepaid SIM. Second, get an unlocked phone. Third, and optionally, streamline the phone so it offloads SMS and voice services over WiFi.

Aside from having to custom cut my own SIM card, my experience was quick and issue-free. My current bill runs about $6.25 a month.

Image Credits: Cell Phone via; Cell Tower via; Silhouette via

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34 Comments - Write a Comment


Alex Downs

I was wondering what was the best option, also least expensive, for an unlocked phone with a Micro HDMI port? Should be pretty obvious why I’m asking lol.

Kannon Yamada

Hey Alex – I assume you are asking what the best option for an MVNO is, and which plan is the best. It depends on your usage and your phone technology. If your phone is GSM, and you have heavy usage, I suggest Straight Talk’s unlimited plan for $45 a month. If you are a light user with GSM, I suggest PlatinumTel’s PayGo plan. However, analyses vary and prices change.

If you are asking about which phone is the best bang for the buck, that’s easy: any GSM Nexus series phone, like the N4, N1, Gnex or Nexus S. Pros: Nexuses will work on either the T-Mo or AT&T network, or any MVNO that rents space from either company. Also, getting started with a GSM phone simply means getting a SIM card.

In my opinion, you get the best bang for your buck by upgrading to an older phone. The Nexus One, unlocked, can be found for like $50 at the right place. And it has an amazing dev community.

If you have a CDMA phone, either Verizon or PagePlus, you are kinda limited. I personally think Ting is the best for Sprint-CDMA and PagePlus the best for Verizon-CDMA.

Alex Downs

No, I was just simply wondering what was the best unlocked phone/ cheapest with a Micro HDMI. Thank you for all the informative information though.I have a good idea of a plan I’d go with already.Does the old Nexus One have a Micro HDMI? Also I was referring to your previous article about making your next PC your smartphone.

Kannon Yamada

I think the oldest Nexus One had USB-host hacked onto it. But it seems you would need to install a custom ROM to get that working. I didn’t have a chance to completely read the information on the subject, unfortunately.



T-Mobile’s $30 plan is also a top contender for GSM-based prepaid. $30 a month gives you unlimited data and texting, with 100 minutes. It’s not an MVNO, but it’s certainly a good deal. I’m stuck on contract with Verizon until September, but I’ll probably switch to this, so long as it’s still around.

100 minutes isn’t unlimited (clearly), but if you use GVoice or use texting/email more often, it’s not that big of a deal.

Kannon Yamada

The T-Mo prepaid plans are probably the newest players on the prepaid market. And their prices are indeed quite good. Thank you for mentioning it.

The Virgin Mobile plan, though, I believe has both a larger cap, faster speeds 300 minutes of talk and is only $5 more. Unfortunately, it’s not BYOD (bring your own device) and it’s CDMA.

I think on the lower end of the spectrum, that T-Mo plan might actually be the best at that price point.


Kieran Colfer

Another way to save money on a pre-pay plan with any carrier is that most of them (at least over here), do something like a “pay $30 for the month and get free calls, texts and internet”, with the idea that people will keep topping up every month to get the “free” stuff and forget to actually use the credit they’re building up. What I do is:
1) top up by the $30 and get free everything for the month
2) when the free stuff runs out, don’t top up and use the $30 I put in last month
3) when I’m running out of credit, top up again.
So, generally I get 2 months worth of calls/txts/data for $30.



For people in the UK:
The best MVNO that I have found is Ovivo. They offer you 100 minutes, 100 texts and 400MB of data every months for FREE – no need to top-up at all.
If you exceed their free limit, you get very cheap texts and calls anyway (4p per text)!

The only catch is that you can only get their SIMs with a £15 initial top-up.


Charles Rachor

What about the possibility of switching a Verizon LTE phone to a GSM network? Not necessarily even a prepaid plan/network, but just in general.



Aren’t these MVNO’s generally limited to 3g data speeds? Not a huge deal, but not having LTE is a compromise compared to paying the big bucks for a contracted phone.

Also, in regards to the Ptel paygo, if my math is correct, 1gb of data at $0.10 MB is $100. So the author must use very little mobile data..

Kannon Yamada

That’s a great question. Some of the MVNOs are limited to 3G data speeds, but that’s because they’re on a network that hasn’t yet rolled out 3G. Is that only T-Mobile nowadays?

In a few other instances on the smaller MVNOs, they don’t permit data roaming. So the coverage for data is generally poorer than on other networks. Ptel I don’t think permits data roaming.

But for most MVNOs, they are contractually guaranteed the same coverage/service as their backbone provider. I believe Virgin Mobile and Ting have actually addressed this concern on their respective websites.

Mike you are quite correct that I use very little data. If I ever anticipated ever having to use a heavier amount of data, I could simply change over to an unlimited plan for a month. As it stands now, I just use a lot of offline apps and load up over WiFi.



Bookmarking this to read later. I am always interested in saving money! I am just hoping with my lack of ability to comprehend much of what I read I can figure it out. If not I will make someone explain it all to me…lol. I am more of a hands on type person. I can watch you build and do one of my own, but reading how to do it is harder for me.


Frances Kohl

It seems I read that unlocking phones is no longer permitted. Is this so?

Mike F

As the author says, you can still have the phone unlocked after your 2 year contract period is up. The only change/clarification that recent law made is that you cannot have your phone unlocked while under contract.

You can also buy unlocked phones. They are typically more expensive up front but you almost always save money vs a subsidized phone with a 2 year contract.

Kannon Yamada

It seems like the carriers, for right now at least, are unlocking phones. However, if they decided to change their policy, there’s nothing we could do.

Mike F is right, though, the intent of the law was to prevent people from unlocking their phones while under contract.


Andrew Jordan

When I hear sanding & cutting SIM cards I shudder. From my one time read the author seems to be using the phone a lot via WiFi or indoors.How would this plan work for mainly out doors use with no WiFi . All my calling or data is done at customers or in the car?

Kannon Yamada

:-) My fingers shudder now, too.

That’s a good question – I’ve used the phone considerably outdoors, but you are indeed correct that most of the usage comes over WiFi.

I don’t suggest PayGo, or paying for individual minutes/data, for anyone who spends a lot of time on their phone. For heavy use, you’re probably better off with an unlimited plan through StraightTalk, if your phone is GSM.

If you have a Verizon-CDMA phone, or if call quality/reception is the most important, I’d go with PagePlus.

For someone who spends a lot of time in the field, where call quality is the number one most concern, PagePlus’s $50-60 range of plans are among some of the better options out there.


Keith Swartz

Buy your Phone at end of contract and go PAY-AS-YOU-GO! Cut our phone bill 3/4’s the price it was [and this with AT&T!]. Simple, works everywhere and all the time (even in rural Mississippi!]. Thanks for the article and the additional info.


SaapeXD MoHods

I use Prepaid and it looks like I dont even spend $10 per month on my mobile credits! :D Afterall I only recharge my account if I have to call someone, all other times balance is 0! hehe! :D, internet -> From Free Wifi!


Stephanie Staker

Great information here, Kannon! I will pass this on to my grandchildren who want low-cost cell phone usage. Of course, they want all the goodies (and who could blame them?) like text messaging, email, tons of apps and to have all that and pay for it, this info is invaluable for them. Mom & Dad won’t always pay for their service, right? :) Thanks for the in-depth directions too.


William McDaniel

Great info and very well said. Now, I must figure out which I want to adopt. But your article will help me a lot. Thank you for a very readable and understandable article.



“Straight Talk. However, they cap their data at 2 GB, at which point you get throttled. Fortunately, their throttle speeds seem to restrict the least of all MVNOs.”

The above statement FALSE. Straight Talk does not cap data at 2 GB.


a chris

how about Credo?

Kannon Yamada

I just took a peek at their plans – some of them look decent and they have 4G access. It’s a post-paid service, though, so you’re paying up front. It’s also Sprint-CDMA, and it doesn’t look like we’re permitted to bring our own devices onto their service.

For me personally, I stay away from any service that locks customers into using phones that only work on their network, such as Tracfone and Virgin Mobile. Sometimes the plans are great, but if you decide to upgrade your phone, you may get stuck with a very narrow selection that’s substantially overpriced.


Nancy B

Is this available in Canada?

My contract with Solo runs out in April and now Bell who owns the company is discontinuing the Solo company as it was the cheapest going….heaven forbid Bell not make more money by transferring you to their main company which would cost me another $20 a month for the small plan I have!

I’m not sure whether to try pay-as-you-go again, or just find the cheapest plan as I don’t use the cell alot and even then mainly for voice calls and a few texts. I blocked data last year after it got turned on by accident and cost me $20!

I’m not interested in the latest most gadgets phone, maybe a better camera but that’s about it.


Kannon Yamada

Canada is in the same, if not worse, situation as the United States in terms of the quality and pricing of its cellular service providers. A small number of companies dominate the airwaves. So, in theory, MVNOs should exist, since the big companies have an incentive to sell spectrum to smaller companies.

Who are the big providers over there? And what cellular technologies do they use? From what I can tell, CDMA (the proprietary cellular technology) is not a big factor in the Canadian market, meaning you can use pretty much any GSM phone on any network over there, provided it broadcasts at the appropriate frequencies.

Nancy B

Yes I went to the link you provided but as you can see Bell first had 2 subsidiary companies now seems to be buying up the smaller and local companies. Other 2 big ones are Rogers and Telus.
Bell and Rogers love adding on extra charges one called a system access fee for $6.95 a month, and charge $2 for 911 service when it will even work on an old phone on no contract or pay per use!
I purposely went to Solo as it didn’t charge for those 2 things or any other made up charges.
So over the next 2 months I have to check out all the companies and plans and your link you provided, and try not to get scammed again.

Kannon Yamada

$9 Canadian dollars extra a month is pretty outrageous. Over the course of a year, that adds up.

According to the link below, they’re saying that the best prepaid carrier is Koodo prepaid. It’s $15 a month for unlimited text and voice. The data prepaid add-on package is a one-time fee of $30-35 for 1GB of data (which you said you didn’t need).

By US standards, this is a very good plan.

For camera phones, by the way (I forgot to answer your original question), it’s hard to say what phone is the best. TO my knowledge, they don’t put high quality cameras in anything but high-end, cutting edge phones.

The best low-cost phone would be the older iPhone 4S or 4. Relatively good camera and you can find them for $300 USD off-contract. That’s less money in Canada actually. There’s also the Samsung Galaxy SIII and the Nexus 4.

Koodo wireless is actually having some kind of special on the iPhone 4:

Nancy B

Thanks Kannon for your research in this! I’ve been looking at all kinds of plans and just confusing myself!

I know a couple of people with Koodo who are very happy with the service. And as long as they don’t charge those outrages $9 fees plus 13% taxes on that don’t forget! I will go with any company that doesn’t charge them! I will check them out!


Edward Bellair

Even the unlimited is false advertisement or word usage as it is not truly unlimited if they throttle you at a certain point.

Kannon Yamada

I totally agree. However, there are a few truly unlimited MVNOs.

I’m hesitant to recommend Solavei, which is one of them, although currently they offer a truly unlimited plan. Because of their MLM-style business model, however, I strongly doubt that they can continue much longer.

clinton hoffmann

Hello Kannon,

I am a Solavei Rep and I too had my doubts about them for a while, but– they are now over 200,000 users strong and their so-called “MLM” style model is not the the traditional method as most will assume. Anyone can sign on and never have to do anything with the opportunity side of it. I have over 500+ people in my personal network and 95% of them just use the service and I still get compensation for everyone that stays on the plan. In all reality, I have made back enough from Solavei to literally pay for my $49 cell phone bill for the next 5 years ( I can prove it too! ;)) As you know, it’s an MVNO using T-Mobile’s backbone for their network. Please reconsider by looking at: Thanks!

Kannon Yamada

Hello Clinton – at the time I wrote the article, Solavei did indeed have unlimited data access. However, as it stands, no longer. There’s a soft cap at around 4GB. These data caps appear to change on a regular basis, so I may be wrong.

But here’s my point: For $49 a month, the plan is good, but there are better T-Mobile MVNOs out there. Straight Talk for example, which supposedly went fully unlimited with data, although that may or may not last.

That leaves the MLM strategy as the only real selling point behind the service. If you can recruit just three people the plan starts to get better than Straight Talk. If recruit hundreds, it’s basically a job. That’s fantastic.

But with finite room for growth due to the limited amount of spectrum available to MVNO, the service eventually will run out of steam. MLMs are known for reaching critical mass and then exploding… or stagnating. Having analyzed Solavei’s model, I can’t see how it stands out from the other MLMs. But it’s still a good service. I just wouldn’t recommend it to folks because of their business model.

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