How to Save Almost $1000 a Year on Your Mobile Bill

Last updated: July 12, 2013

Verizon's Share Everything Plan costs a typical family of four $230 to $250 a month

Verizon’s Share Everything Plan costs a typical family of four $230 to $250 a month

Cell phone service seems to get more expensive each year in the U.S. Verizon charges $40 a month for each phone — plus another $50 to $100 per month for data for their Share Everything family plan. That means a family of four who uses 2GB of data each will pay $3000 a year for their mobile phone service. Even a modest plan with only two smartphones, one basic phone and 4GB of shared data costs $180 a month. This doesn’t include the upfront cost of the phones and all of the taxes and surcharges which carriers add each month. The true cost of owning an iPhone 5 has been calculated to be at least $1800 a year! By switching to a prepaid plan, you can save almost $1000 a year — and end up with unlimited data. Families can save even more. Even if you live in Europe and don’t pay as much for cell phone service, there are some compelling reasons to purchase an unlocked phone and go prepaid. Read on to learn why.

It's now possible to use smartphones like the Nexus 4 with prepaid plans

It’s now possible to use the most advanced smartphones with prepaid plans

Which Phone Should You Buy?

Carriers like Verizon offer prepaid plans that cost $50 to $80 a month, but they come with really bad phones. If you think this doesn’t sound like a great deal, you’re right. There are other companies who offer prepaid plans that cost a fraction of what Verizon charges, but they also include bad or outdated phones. You don’t have to compromise on the quality of your phone in order to go prepaid. You can buy any smartphone you want and use it with prepaid plans from AT&T, T-Mobile and others. You just need to make sure your phone works on the type of network your carrier has. The phone I’ll be using as an example in this article is much better than your current phone and costs less.

A typical prepaid phone

Prepaid phones like this should be avoided


You should purchase an unlocked phone if you want the most flexibility. Even though they cost more upfront, you’ll save money in the long run. With an unlocked phone, you don’t have to sign a two-year contract and can switch carriers at any time. Previously, you had to pay around $600 for an unlocked phone, but now you can get an unlocked Nexus 4 for only $299. The Nexus 4 has the fastest mobile processor on the planet, along with a 4.7” 1280×768 display, 8MP camera and 2GB of RAM. It’s also the first smartphone which runs Android 4.2. If you’re an iPhone person don’t worry, we’ll talk about a prepaid plan for unlocked iPhones below.

Update: Since the Nexus 4 has been sold out much of the time in the online Google Play store, it’s good to know that all T-Mobile locations are now stocking it.

Update (7/12): Sprint launches new guaranteed for life unlimited data plan. More info

What is an Unlocked Phone?

  • An unlocked phone is a phone that’s not locked to a single carrier
  • Choose your carrier and phone independently, as long as those carriers work on a GSM network
  • Unlocked GSM phones include a SIM card which is programmed with your information
  • Insert your SIM card into another unlocked phone without losing your contacts
  • Unlocked phones like the Nexus 4 run on any GSM Network. That means you can jump between AT&T, T-Mobile and other pre-paid providers. Phones like the Nexus 4 and iPhone 5 can also be used with international SIM cards while traveling. Cricket Wireless offers the iPhone 5 and MetroPCS offers the Galaxy S III, but these phones will cost you more than the Nexus 4. If you’re looking for a more affordable phone, get a Nexus 4 or a Samsung Galaxy II.

    Other unlocked phones include the LG Optimus 4X HD, Huawei Ascend P1, Samsung Galaxy Beam, Nokia 808 PureView and Sony Xperia P.

    Why Choose an Unlocked Phone Over a Prepaid Phone?

  • Better selection of available phones
  • Change GSM carriers without changing phones
  • More of the best new phones are available
  • Better for overseas use
  • More customization options
  • Which Plan Should You Choose?

    Being off-contract lets you choose from a wide range of different prepaid plans from AT&T, T-Mobile and Verizon, as well as companies like MetroPCS, Straight Talk and TracFone. Although there are many different prepaid plans available, it seems most people prefer one of the following two plans:

    Recommended Option 1 – T-Mobile Prepaid 4G
    One of the best is T-Mobile’s $30 pre-paid plan. It’s perfect for people who don’t make a lot of voice calls, but use lots of data. It has unlimited data, unlimited messaging and 100 voice minutes a month. Although they say this plan has unlimited data, they start throttling after you use 5GB of data. Most current unlimited data plans throttle data as well, you just probably don’t realize it.

    Why 100 minutes won’t be a problem for most people
    The T-Mobile plan is perfect for my kids, because they don’t talk much on their phones, but send over 1000 texts a month each and use lots of data. Although the T-Mobile plan only has 100 minutes, that’s per person, so it’s 400 minutes for a family of four. Extra minutes cost 10 cents each, so it’s not a big deal if you go over a little. 10 cents a minute is much less than carriers typically charge for overages (it’s more like $0.45 a min). If you are a sales person the $30 a month T-Mobile plan is probably not right for you, however T-Mobile has a $50 plan with unlimited talk.

    T-Mobile has one of the best pre-paid plans because it's inexpensive and works with premium phones

    T-Mobile has one of the best values in pre-paid phone plans


    Recommended Option 2 – Straight Talk
    Consumer Reports recommends Straight Talk’s prepaid plans, which are available from Walmart. Consumer Reports says surveys show people are happier with Straight Talk, than with normal contract mobile service from any of the major carriers. Straight Talk has several plans, including $45 a month for unlimited talk, text and data. That’s half the price of Verizon’s cheapest unlimited plan. I’m told that Straight Talk uses AT&T network.

    You can even get a prepaid plan for the new iPhone 5

    You can even get a prepaid plan for the new iPhone 5

    Big News: Walmart’s now offers the iPhone 5 and iPhone 4 with unlimited Straight Talk plans for $45 a month.

    Recommended Option 3 – Cricket prepaid for the iPhone
    There are prepaid wireless plans from Cricket Wireless and others, however Virgin’s $30 unlimited prepaid plan looks good to me. Virgin has three different plans, which all come with unlimited data and text messages. For $35 you get 300 minutes of talk time. For $45 you get 1200 minutes, and for $55, you get unlimited minutes. More details why your next iPhone should be prepaid.

    How to Activate Your Phone on a Prepaid Plan

    Before activating your phone, you need to determine what size SIM your phone uses. The new Nexus 4 and iPhone 5 both have microSIMs. If you’re not sure about your phone, check the manufacturers website, or check Google. Next, you need to decide which plan you wish to use. I’ll detail the activation process for T-Mobile, but all plans are similar. You should order a SIM when you order your phone. T-Mobile charges $1 for their SIM Card Activation Kit.

    After your phone and SIM arrive you’re ready to activate your phone. Everything you need to know is listed here. I suggest you watch their video and make sure to have the account number from your current mobile provider ready before you start. Activation should take you 10-15 minutes or less.

    The true cost of a smartphone is much higher than your think

    The true cost of getting a smartphone from a carrier is much higher than your think

    How Much Money Will You Save?

    Although the freedom to switch carriers without a penalty, or buy a new phone whenever you want is great, the main reason to go prepaid is to save money. Just exactly how much will you save? AT&T’s cheapest Nexus 4/iPhone 5-compatible plan with similar features to the T-Mobile plan described above (450 minutes, 5GB of 4G data and unlimited messaging), costs $109.99 per month per person.

    The annual cost for a smartphone running on T-Mobile’s pre-paid plan is only $361. That’s a fraction of what you’re paying your carrier today.

    How Much You’ll Save Over a Several Traditional AT&T Plans
    Annual cost of a smartphone running on the least expensive AT&T plan with 3GB of data: $828
    Total yearly savings per person with a T-Mobile’s prepaid plan: $467
    Total yearly savings for a family of four: $1868

    Annual cost of a smartphone on a AT&T plan with 5GB of data: $1320
    Total yearly savings for a single person with a T-Mobile’s prepaid plan: $959
    Total yearly savings for a family of four: $3836

    How Much You’ll Save Over a Traditional Verizon Plan
    Annual cost for a family of four on Verizon’s Share Everything plan with 2GB of data per person: $3000
    Total yearly savings for a family of four using T-Mobile’s prepaid plan: $1556
    Savings for a family of four over an older Verizon Family Plan: $1316

    What are the Downsides?

    As far as I can tell, the risks of switching to a prepaid mobile plan are small, as long as you buy a good unlocked phone like the Nexus 4. The Nexus 4 does not officially support LTE, but I don’t see that as a deal breaker. Read why below. A Consumer Reports survey says prepaid phone users are actually happier than non-prepaid phone users. T-Mobile might not be the best carrier, but I’ve come to the conclusion that all U.S. carriers are bad for one reason or another. Verizon may have better 4G coverage in some areas, but is that really worth almost $1000 for each member of your family? I don’t think so.

    Reasons why the lack of LTE on the Nexus 4 may not be a problem for you
    LTE support isn’t offered in all cities and countries yet. Even if it is available in your city, you still won’t get it a lot of the time. If the lack of LTE bothers you, you should buy another unlocked phone with LTE support or switch to AT&T, which supports HSPA+, which is capable of speeds that are almost as fast as LTE (up to 21 Mbps). Another factor you should consider is the percentage of time your phone will be out of range of a broadband Wi-Fi connection. I spend the majority of my time either in the office or a home where there is access to fast Wi-Fi.

    An Unconventional Way to Save Even More

    I recently read an article about someone who used a 7″ tablet instead of a smartphone for an entire month. At first this sounds crazy, but you can buy a cellular-enabled Nexus 7 for only $299 and add it to an existing carrier plan for only $10 to $20 a month. You can make calls with a Bluetooth earpiece just like a normal phone. You would be using this device on Verizon’s, AT&T’s or Sprint’s network, so your coverage would be no different than a normal smartphone. Obviously this wouldn’t work for someone who didn’t carry a backpack or briefcase where they could store the device, but it’s not as crazy as it sounds. If I was someone who didn’t make many voice calls, I would seriously consider this option.

    If This Is So Great, Why Haven’t I Switched Yet?

    Once my wife’s contract is up, we may switch to T-Mobile’s $30 prepaid plan. If she likes it, I’ll switch the rest of my family members over. I have several friends who have already switched and they are happy. Besides, if we don’t like T-Mobile, we can switch to AT&T (or another prepaid carrier) after 30 days without a penalty. If a better phone comes out in three months, we can use it without paying a penalty. We’ll pay more up front for an unlocked phone, but we’ll quickly make up the difference in 3 to 5 months (depending on the phone). You should look into switching too. Even if you have a less expensive Family plan, you’ll still save over a thousand a year if you switch. Imagine what you could to with all of that money.

    Where to Read More

    - Prepaid or postpaid?: The fight for your cell phone dollars
    One-third of U.S. smartphone sales in Q1 were prepaid

    – Rick

    Copyright 2013 Rick Schwartz. All rights reserved. Linking to this article is encouraged.

    Follow me on Twitter @mostlytech1

    Seven Mistakes That Could Jeopardize Google’s Mobile Future

    Last update: May 26, 2013

    Five years ago few thought Google could ever challenge Apple when it came to mobile technology. Now Android is leading the way in many areas. Google got where they are today thanks to a well-executed strategy and lots of help from Apple, but mistakes they are making now could jeopardize the future of Android.

    The top three U.S. Big Box retailers produce almost 600 billion dollars in revenue

    Traditional retailers are still important. The top three big-box retailers produce almost $600 billion in revenue a year

    1. Largely Ignoring the Traditional Retail Channel

    E-commerce sites like Amazon.com might be the future, but big-box retailers like Walmart, Best Buy and Costco produce 12 times more revenue than Amazon does today. Apple understands the importance of retail and sells huge quantities of smartphones and tablets through this channel. Google has met with companies like Best Buy before, but most retailers don’t like them because they sell devices direct to consumers for less money than the retailers need to make a good profit. Google also doesn’t spend millions of dollars on retail end-caps, marketing and product training like Apple and Samsung do. I believe Google needs to hire someone who understands how to work with traditional retailers and expand their presence in brick and mortar stores.

    One explanation why Google has been ignoring traditional retailers could be they are planning to open their own stores. Although Google originally denied this, there is now evidence they may be going ahead with this. I suspect we’ll see them start with only a few stores however. It would take years and lots of money to expand their reach into most major U.S. cities.

    2. Having One of the Worst e-Commerce Sites

    Many Google products are not available from major retailers. If you want to buy a product like a 16GB Nexus 10, there is only one place to get it today: the Google Play website. Although Google Play works well for app sales, it gets failing grades in the area of physical fulfillment of products. Their first launch of of Nexus One was understandably a disaster, but the company has had years to fix these problems and they have not done so. All three of their recent Nexus launches were horrible in every way. Even the e-commerce areas of their Google Play website were unable to support the traffic. That’s really surprising. I haven’t seen a site fail so badly since the early days of the Internet. I believe Google needs to fire the people in charge of their current e-commerce and fulfillment operations and start over, or farm out the business to someone like Amazon, who understands how to do e-commerce right.

    3. Making Better Apps for Competitive Platforms

    Some of Google’s apps are now longer better on iOS than Android. Examples include Google Mail, Google Maps and YouTube, which all have advantages on iOS currently. While this could be temporary, it makes no sense to favor a competitor’s platform over your own. More details.

    Update: Since this article was first written, Google has improved their Maps and YouTube apps, so I believe their Android apps now have advantages in some areas.

    Over-dependence on the cloud can be a bad thing

    Overdependence on the cloud can be a bad thing

    4. Forcing Consumers to Use the Cloud

    It’s clear Google wants everyone to use the cloud, but shipping one of your flagship smartphones with only 8-gigabytes of local storage was a poor decision. Especially in light of the fact the Nexus 4 doesn’t have a memory expansion slot, like the Samsung Galaxy S III, and many other Android phones. An 8GB Nexus 4 has less than 6GB of free space available out of the box. Since my apps alone occupy over 3GB of space, that leaves only enough room for a single movie download. Even if you don’t download movies, you might still have problems. Popular games like Modern Warfare 3 and 9MM use almost 2 GB of storage space. Sure you could delete a few large apps to free up space, but you shouldn’t have to.

    Google expects us to store our movies, music, photos and documents in the cloud, but what if we want watch a movie on a plane, or we need to access an important file at a location with no cellular or Wi-Fi access? This could be a big problem. Apple downloads its media and doesn’t stream it like Google does. Google does allow you to download (or pin) media from Google Play, but you need free space on your device to do so.

    Storing all of you media the cloud can also be problematic because Google Drive and all other cloud-based systems occasionally go down. Google claims 99.948% uptime, but that corresponds to 7 minutes of downtime a month, which is a big deal if a Google service is down when you’re trying to access data from it. That’s why you should always try to carry essential files on your device (or ‘pin’ them so they are accessible).

    Less than 1% of all Android users were running the newest version of Android on 12/3.

    Only 1.2% of all Android users were running the newest version of the OS on January 3rd

    5. Allowing Others to Seriously Weaken Your Platform

    Carriers and handset manufacturers unintentionally hurt the Android platform by insisting on customizing the software on their mobile devices. This causes OS fragmentation, support issues and customer frustration, because users have to wait so long to get bug fixes and new features. Apple has a “take it or leave it” attitude with carriers, and forces them to limit customization, so users can download updates on the first day they are available. This is one of the strongest advantages iOS has over Android today. Google has made progress on this issue with their line of Nexus phones, but even those devices have carrier bloatware and don’t always receive OS updates when they are first available. Just how bad is OS fragmentation on the Android platform? As of January 3rd, only 1.2% of all Android users were running the newest version of Android, while over 60% of Apple users were running the newest version of iOS. 59% of Android users are stuck using an OS that is now over two years old. Google decided to call Android 4.2 Jelly Bean so they could say that 10% of all Android users run that version, but that’s far from a solution. Google must address this issue in 2013.

    Android 4.2′s calendar bug is evidence that Google is rushing products to market before they are ready

    Android 4.2′s calendar bug was evidence that Google was rushing products to market before they were ready

    6. Releasing New Products Before They Are Ready

    Lately it seems Google is trying to do too much at once, and is releasing new technologies before they are ready. For example, proper testing would have exposed the December bug in Android 4.2. That issue was fixed in a software update, but there are other Android 4.2 bugs like the Auto-brightness bug, which should have been caught. In addition, key Android 4.2 features like Miracast steaming don’t work on the Nexus 10 and other devices. Google’s haste has also broken some of the biggest advantages of Android 4.1 on some devices and has some saying Android is becoming too complex for its own good. Not all of Android’s issues are software-related. Some of Google’s newest Nexus devices were released without a single accessory (e.g. dock, case, etc.) This caused frustration among some users. There is simply no excuse for this type of poor planning. Google needs to slow down and take the time needed to do things right.

    7. Eliminating Some of Android’s Biggest Advantages

    Hardware choices are good, but Google should strongly encourage manufacturers to make Android devices with Android’s signature features like slots for removable memory, removable batteries, standard micro USB and micro HDMI ports. Expandable storage, standard ports and removable batteries are some of the key selling points of the Android platform and the reason why many people are switching from iPhone to Android devices. Removing these advantages from Nexus devices and allowing manufacturers to remove them from their devices seriously weakens the Android platform.

    Final Thoughts

    Google has come a long way in the past five years, but it seems like their phenomenal success is going to their heads. Apple may be down right now, but stupid mistakes like these are what allowed Google to steal so much market share in such a short time period. I hope Google can address some these issues before it’s too late.

    Do you agree Google is making some big mistakes, or am I just overreacting? Let me know in the comments section. Thanks.

    – Rick

    Copyright 2013 Rick Schwartz. All rights reserved. Linking to this article is encouraged.

    Follow me on Twitter @mostlytech1

    Follow

    Get every new post delivered to your Inbox.

    Join 893 other followers