In 1984, Apple released the Macintosh, touting it as “the computer for the rest of us.” It was revolutionary in bringing ease-of-use to personal computing. At its release, the iPhone has done the same for cellular phones by adding touchscreen control, widescreen iPod functionality, and improved Internet communications in one svelte package.
The iPhone’s release not only forced other phone makers to change their ideas of how a cell phone should operate, it also highlighted the often confusing ways cellular providers charge for phone and Internet access. AT&T, the sole provider for the iPhone in the United States, assumes that if you’re paying up to $600 for a phone, you probably need a large number of included minutes – and are willing to pay a hefty monthly fee. The required 2 year service commitment starts at $59.99 per month, which includes 450 minutes of talk time and unlimited data access. That’s too expensive for some people, while others don’t need anywhere near the included 450 minutes of talk time at that price. What’s needed is a “cellular plan for the rest of us,” which would enable infrequent callers to enjoy the other great features of the iPhone.
Fortunately, such a plan exists, although not officially for the iPhone (but read on for a way to get around that limitation). Inexpensive prepaid cell plan options are available right now in the United States that work with less-capable phones.
Explaining Prepaid — With prepaid cellular, you pay for your minutes in advance instead of receiving a bill for usage after the fact each month. As you use your phone, per-minute or per-text message charges are deducted from your account. When your account is empty, or at the end of its time limit, you simply add more funds. Some prepaid cellular providers also offer monthly plans that work more like the contract plans for heavier use, but without the bill. Prepaid monthly plans can make sense for more frequent use, since they tend to be less expensive per minute than prepaid per-minute plans, but they can also be more expensive than a comparable monthly contract plan.
Prepaid cellular is ideal for those who don’t use most of the minutes on their monthly cellular contracts or for people who simply want an inexpensive cell phone in case of emergency. Most of the included phones are simple and inexpensive, and not capable of handling email, Web browsing, and other data services. There is no contract to sign with prepaid cellular, no bill to pay, and no obligation to stick with a single provider for any length of time. You can cancel or switch at will, though switching providers will require getting a new phone.
If you currently have a monthly contract plan, the easiest way to see if prepaid cellular is right for you is to check your previous bills. If most of your minutes went unused, chances are a prepaid plan would fit your lifestyle and your wallet much better. Although 10 to 25 cents per minute may sound like a lot, if you use only 100 minutes of airtime in a month on average (about 3 minutes per day), 10 cents per minute works out to $10 for that month.
[Editor’s Note: Tonya and I switched to Virgin Mobile’s prepaid plan several years ago when I realized that in all of 2005, I had used only about 450 minutes, and Tonya hadn’t come anywhere close to my level of usage. The per-minute charge on the monthly contract plan may have seemed low, but the amount we ended up paying per minute of actual usage was insanely high. Do yourself a favor and do the math. -Adam]
Comparing Prepaid Services — As with any service it’s a good idea to compare different providers, but with prepaid cellular that’s often easier said than done. To help you get started, I take a quick look at the major players and provide links to their Web sites so you can check their current pricing, which does change.
There are variables other than price you should check as well. Several prepaid cellular providers place an expiration date on minutes, which equates to highway robbery. With these providers you lose your purchased minutes if not used in a certain amount of time after purchase, usually 30 to 90 days. Other providers, more reasonably, never expire purchased minutes as long as the account remains active. A few fall in between.
Coverage can vary greatly, especially in rural areas. Many of the prepaid cellular providers piggyback on the cell networks of other major providers, so it’s absolutely worth figuring out which network each provider uses. Then check with friends and local cellular stores to figure out which networks work best in your area.
The process of adding funds to your account can vary from one provider to another, and even from one plan to another with the same provider. For a few, the only way to add funds is to purchase a prepaid card in a store, but most offer automatic credit card deduction options or the capability to add funds directly using the phone, or sometimes both. Automatic credit card deduction is undoubtedly the easiest approach to adding funds, but that may not always be appropriate if you’re working on a limited budget or funding a phone for a child.
I first researched prepaid cell phone plans back in 2002 for my father-in-law, who needed an inexpensive cell phone for his job driving cars between dealerships all over the area. Looking into the topic again five years later, it’s great to see that prepaid cellular plans have become more consumer-friendly, less expensive, loaded with more options, and with fewer hidden surprises. Prepaid cellular in the United States was pretty new in 2002, and most of what was available was just as expensive or more than the cheapest contract plans. Back then, I did a lot of research and found one provider that was different: Virgin Mobile. Nowadays, there are many more providers, but Virgin Mobile remains a top choice.
Virgin Mobile USA — Adam amusingly calls the $20 Kyocera K10 Royale he uses his “teenage girl phone” because of the way Virgin Mobile targets a young, hip audience. I too ended up using Virgin Mobile USA, a joint venture of Richard Branson’s Virgin Group and Sprint Nextel, first with a Kyocera Party Animal and now with a $50 Audiovox Snapper. The company offers a variety of mostly inexpensive phones at Target, Best Buy, and many other stores, although it’s just as easy to purchase one directly from Virgin Mobile’s Web site. They have exclusive tie-ins with MTV, VH1, and Comedy Central for content, marketing mainly to teens and twenty-somethings. Virgin Mobile was the first prepaid cellular provider to offer simple plans that did not expire, and has developed a word-of-mouth following among older folks. For a minimum of $20 every 90 days, or $15 if you register your credit card for automatic payments, you get the basic plan of 18 cents per minute and 5 cents per text message. Funds added accumulate as long as the account remains active and do not expire, and there are no multi-year commitments. Virgin Mobile offers a wide variety of plans – two per-minute plans and six monthly plans for more frequent use. Coverage is nationwide using the Sprint PCS network with no long distance or roaming charges.
Boost Mobile — Boost Mobile, owned by Sprint Nextel, is another prepaid cellular provider that markets to the same “active youth demographic” as Virgin Mobile, albeit with a more urban tone. One thing setting them apart is that many of their phones can use the Nextel walkie-talkie feature. Boost offers a variety of plans to choose from as well, with one per-minute and three monthly plans with no long distance or roaming charges. On the per-minute plan, paying at least $20 every 90 days keeps the account active with no expiration; minutes cost 20 cents for local and long distance, or 10 cents per minute on nights and weekends and mobile-to-mobile calls. Unlimited use of the walkie-talkie feature costs $1 for each day it’s used. Automatic payment via credit card can be set up for when the balance reaches $5 or less, but there isn’t an every-90-days option as there is with Virgin Mobile, which means you have to watch the renewal date. The three monthly plans cost $30 (no included minutes; 10 cents per minute), $50 (400 minutes, which works out to 12.5 cents per minute), and $70 (600 minutes, or 11.6 cents per minute). Coverage is nationwide using both the Sprint PCS and Nextel networks, and phones are available at Best Buy, Target, and other locations as well as the Boost Mobile Web site.
Two more monthly plans, Unlimited by Boost, are currently offered only in Texas and California. For $55 you receive unlimited minutes with a 15 cents per minute roaming charge and 10 cents per text message sent, and for $60 you get unlimited minutes and unlimited text messaging with 15 cents per minute roaming. Unlimited by Boost phones do not support the walkie-talkie feature.
TracFone — The first nationwide prepaid cellular provider in the United States was TracFone. TracFone uses several cellular networks, and it’s not at all obvious whose network they use in a particular area. I’m not entirely sure what their rates, plans, and payment methods are (other than the ubiquitous prepaid cards seen in most any convenience store or drugstore) because of their difficult-to-navigate Web site, but it appears that minutes cost 20 cents each when purchased in bundles of 50 ($10) or 100 ($20) minutes. There are also several plans that add minutes automatically, also at 20 cents per minute. TracFone has had some customer service issues over the years. In February 2007, a class action lawsuit settlement was approved over customers being assessed roaming charges while they were in their home area. Again it’s impossible to say for certain, but it appears TracFone no longer charges extra for roaming or long distance. Phones are available at Wal-Mart, Kmart, Target, and other stores as well as the TracFone Web site. Overall, I wouldn’t recommend TracFone.
NET10 — NET10, whose slogan is “Pay as you go made simple,” is a second brand created by TracFone. Like TracFone, NET10 uses several cellular networks. However, the NET10 Web site is easier to navigate, yielding the information that paying $30 every 60 days keeps basic service active with no expiration; minutes cost a flat 10 cents each. You can add funds only via prepaid cards, not automatic credit card deduction. There are no monthly plans. Long distance and roaming is included at no extra charge. NET10 phones are available at Wal-Mart, Target, Kmart, and other stores as well as the NET10 Web site.
AT&T — The big national cellular providers also sell prepaid options. AT&T’s GoPhone service offers four monthly Pick Your Plan plans and two per-minute Pay As You Go plans. The Pick Your Plan monthly plans are similar to, but less expensive per month and more expensive per minute than, their contract plans, starting at $29.99 for 200 minutes at 15 cents per minute and going up to $69.99 for 650 minutes at 10.8 cents per minute. The Pay As You Go per-minute plans start at $15 for 30 days; one has a $1 daily access fee when used but costs only 10 cents per minute, whereas the other costs 25 cents per minute. Both include rollover minutes that do not expire for one year from the purchase date as long as the account remains active. Monthly payments are automatically billed to your credit card, and per-minute plan funds can be added with a prepaid card or by calling customer service. There are no roaming or long distance charges. Phones are available in AT&T stores and on the AT&T Web site as well as at many other AT&T retailers.
The iPhone is not officially offered as part of GoPhone, but the service becomes available if the credit check at activation in iTunes fails. As Erica Sadun of TUAW found out, you can force a failure by entering 999-99-9999 as your social security number. The prepaid GoPhone packages available for the iPhone cost between $49.98 and $89.98, and include between 200 and 650 rollover minutes, unlimited data, and Visual Voicemail; the more expensive plans also include night and weekend minutes and mobile-to-mobile minutes. Erica also learned that it’s possible to use the SIM card (and thus the plan) from another AT&T/Cingular phone in your iPhone; it’s a major hack, but could be worth trying. Not all iPhone features, such as Visual Voicemail, may be available if you go this latter route.
Verizon Wireless — Verizon Wireless has an INpulse per-minute plan and two EasyPay monthly plans that seem comparatively overpriced. The INpulse per-minute plan charges a $1 daily access fee when used but only 10 cents per minute, and offers various 30-, 60-, 90-, and 120-day renewals starting at $15 and with expiration dates that go up with the amount you pay. There is also a $35 activation fee. EasyPay features a $50 plan that provides 350 minutes (14.2 cents per minute) and a $70 plan that includes 700 minutes (10 cents per minute). It’s easier to find the details than with TracFone’s Web site, but Verizon Wireless publishes a lot more information that occasionally contradicts. Roaming costs 69 cents per minute, while long distance is included. Payments can be billed automatically to your credit card or paid directly from the phone with a pre-registered credit card. Phones are available in Verizon Wireless stores, at Circuit City, at many Verizon retailers, and on the Verizon Web site.
T-Mobile — You can maintain T-Mobile To Go for as little as $10 every 90 days. Monthly plans are not available. T-Mobile To Go is easily the simplest of the prepaid cellular plans offered by the three major contract providers, but it’s still a bit tricky to figure out. You can purchase minutes in $10, $25, $50, or $100 chunks, varying the per-minute rate from 30 cents per minute down to 10 cents per minute. Minutes purchased for less than $100 expire in 90 days, but once you have purchased $100 worth of minutes, they don’t expire for a year after purchase. Long distance and roaming are included, and phones are available at T-Mobile stores, Target, Kmart, Wal-Mart, and many T-Mobile retailers as well as the T-Mobile Web site.
ET Phone Home, Prepaid — If you’ve never considered a cell phone, are tied into a contract you aren’t taking full advantage of, or are just looking to pay less for cell service, prepaid cellular service is likely a good choice for you. Virgin Mobile has the best variety of plans that work well for almost anyone, from the emergency phone user to a frequent talker. Boost Mobile offers a bit less variety, but the Nextel walkie-talkie feature can be handy if you and several friends sign up together. AT&T focuses mainly on monthly plans that are a bit pricier than their comparable contract plans (and of course it’s the only service that’s compatible with the iPhone), while T-Mobile and NET10 offer only per-minute plans that differ mostly in how much you must pay to keep the service active and if minutes expire.
[Tom Schmidt is an aspiring writer and a service technician at First Tech Computer in Minneapolis, Minnesota, USA.]
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