Is it time to go prepaid on your cellphone?
A few weeks ago, Verizon introduced its "share everything" plans, which marked Big Red's turn away from charging you obscene amounts of money for voice minutes you didn't need, to charging you obscene amounts of money for the data that you do.
Now AT&T has come out with its version of a "share everything" plan, and it's nearly identical. On the surface, these plans sound great -- you get unlimited voice minutes, unlimited text messages and then you simply choose how much data you want to share between up to 10 devices. So for 1 GB of data a month, Verizon would charge you a flat $50. The problem comes from the fee it charges you for each device. Want a smartphone? That'll be $40 a month ($45 on AT&T). "Basic" phones are $30, Wi-Fi hotspots are $20 and Tablets are $10.
So to do the math: If you just want a single iPhone with only 1 GB of data allowed (and $15 overage charge should you go over that limit), you're looking at $90 a month -- before you even get to all those wonderful taxes and mysterious fees.
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More than $100 a month for my cellphone?
And what if your significant other wants his or her own iPhone? That'll be another $40.
Give me a break.
These plans really only make sense for people who spend hours and hours using their phones as, well, phones. But as you can see, both Verizon and AT&T can tell which way the wind is blowing -- the future is data, and you're going to have to pay.
It should be noted that current customers are not required to switch to a "share everything" plan, but it's only a matter of time before you are if you ever want to upgrade your phone.
So what's a smartphone user to do? Continue to line the pockets of Verizon, a company that just reported a second quarter operating income of $5.7 billion dollars? Or you can use the tech that's out there to pay less money and get more service. I'll go with the latter -- which brings us to prepaid phones.
They've been with us for a long time, but the knock on them was always that you couldn't get the latest and greatest phones to use with their cheaper plans. Thankfully, that's no longer the case -- Boost Mobile offers the brand new HTC EVO Design 4G for $299. It's not quite on par with the Galaxy S III, but it's a very solid Android phone. For only $55 a month, you get unlimited voice, text and data ("unlimited" data means up to 2.5 GB and then you get throttled down for the remainder of the billing cycle). They'll sweeten the pot further by taking $5 off your monthly bill for every six months you pay on time, down to as low as $40. Just a little bit better than $90 for half the data -- especially with no contract, eh?
But what if you do want the latest and greatest, without the contract and the huge monthly bill? Prepaid is still the way to go, if you can swallow the upfront cost. Virgin Mobile offers the iPhone 4S for the heart-attack-inducing, nonsubsided price of $649. However, if you can swing that, then you can pay as low as $35 a month for unlimited (2.5 GB) data, unlimited text and 300 voice minutes. Tough to put out so much money for the phone, but keep in mind the total cost -- you're still going to pay $199 for it on Verizon, have a $90 a month bill for less data and a two-year contract. So do the math -- for that $450 more up front you're going to pay $840 for two years of service on Virgin Mobile (with no contract), but you'll pay $2,160 over that same period on Verizon. Is paying $450 now worth saving $1,320 over two years?
The bottom line is this: If you want a smartphone, check into prepaid alternatives. You might be pleasantly surprised.