Potential T-Mobile AT&T Merger Inspires Tips to Save Money on Cell Phone Plans

Potential T-Mobile AT&T Merger Inspires Tips to Save Money on Cell Phone Plans

Photo courtesy of Kenneth Lu, via Flickr

This week the United States government sued to prevent the acquisition of T-Mobile by competitor AT&T. The reason given is that this would lessen competition and, in turn, hurt consumers.

Anyone who has ever dealt with a major cell phone carrier knows that the present state of competition isn’t exactly producing a renaissance of terrific customer service. The norm is two-year contracts, high early termination fees, and steep charges when you go over your allotted voice, data or SMS limit.

But there are alternatives. Read on to find a few tricks to owning and using a decent smartphone without having to deal with the drawbacks of a contract with a major carrier. Pay as You Go

Contract-free, pay-as-you-go wireless plans aren’t exactly a secret. Boost Mobile and others have been selling cheap cell phones with refillable minutes for some time. What is new, however, is that you can finally take advantage of them with a decent smartphone.

For example, Rick Broida recently wrote a review of the Motorola Triumph on Virgin Mobile. This is a legitimately powerful Android smartphone. Once you drop about $300 for the phone itself, plans start at $35 per month for 300 minutes talk time, and unlimited text and data.

There are caveats, as always. That “unlimited” data will be throttled after a few gigabytes, and Virgin Mobile does belong to Sprint, so it’s not exactly a clean escape from the major carriers. All the same it’s a good value–especially considering that you can cancel at any time.

Pay as You Go, iPhone Style

If you already own an iPhone, and your AT&T contract is up, you’re free to leave and never look back. GoPhone, the pay-as-you-go arm of AT&T, has cheap plans that are compatible with the iPhone, if you’re willing to put in a little work.

As TUAW explains, all you need is an iPhone, a pre-paid PAYG SIM card from some place like Costco or Best Buy, and a spare AT&T cell phone to set the whole thing up. The instructions for how to set up the iPhone on GoPhone are kind of involved, but if you follow them you’ll wind up with a flexible iPhone plan with extraordinarily cheap data, in the neighborhood of $150 for a year. Talk and text will cost about the usual rate.

There are drawbacks, naturally. Minutes and unused, pre-paid data will expire if not used within a year of purchase. This route is not for everyone.

The Miracle of Google Voice

For both Virgin Mobile and GoPhone, actual talk time is the weak link. Unlimited data is all well and good, but 300 minutes of talk time isn’t enough for most.

Google Voice, the free VOIP phone service by Google, can make a great supplement. For $20, you can even port your existing phone number into Google Voice–though this will cancel whatever phone contract you’re currently using. For everyone else, call forwarding is easy to set up.

Once Google Voice is set up, you can make free national calls over the internet from any computer. You can even transfer calls to and from your cell phone to make sure you don’t use any more minutes than is absolutely necessary.

Google Voice can send free text messages, too. Which brings us to…

Free SMS Alternatives

The cost of SMS is baffling, if you think about it. If you pay for text messages at the à la carte rate of $0.20 per message, this works out to a mind-blowing $1,310 per megabyte. For a scant 160 bytes of data per message, even the the more affordable monthly rates seem greatly inflated.

Rick Broida recommends Textfree, as a free SMS alternative. If you want to send a free message to another Blackberry, Android or iOS device, PingChat! is a popular option.

If you have a paid Skype account, you can send text message that way, too. This brings us to…

Skype: Where Google Voice Leaves Off

For the uninitiated, Skype is a dirt-cheap VOIP service that has become synonymous with video chat. “Skyping” has become as much a part of the English language as “googling.”

A free Skype account will let you make free video and voice calls over the internet to other Skype members. Paid memberships start at around $3 a month and offer features that are missing from a free Google Voice account, such as the ability to make international calls or, more importantly for some, originate calls over WiFi from a smartphone.

This means you can make and receive calls over WiFi without using any of your precious, expensive, limited carrier minutes. All you need is an Internet connection.

The Holy Grail

All the ingredients are in place: with an inexpensive, data-only plan from a pay-as-you-go carrier, a contract free smartphone, and some of the services listed above, an adventurous and frugal person could piece together the Holy Grail: a cheap, contract-free smartphone with unlimited minutes, text messages, and, of course, data.

One Redditor set out to do just that, in a post that will track his progress in finding unlimited, universal smartphone service for $50 a month. Here’s how he’s doing it: Instead of using a traditional data plan, parabox1 is using a mobile WiFi hotspot device, like Virgin Mobile’s MiFi 2200. This can give you unlimited mobile data for $40 to $50 a month, depending on the service.

Instead of voice minutes, he’s using a paid Skype account (along with Google Voice) to place and receive calls. We can assume he’ll use one of the many free SMS services, too.

The obvious drawback in this plan is the need to buy–and carry around–that mobile hotspot device. And this plan is untested. With time, these data-only pioneers might find that the service is too shoddy to sustain. There’s also the problem that Skype and Google Voice can’t make emergency calls.

It’s an interesting idea and if it works we can only imagine it will make the market for cell phone service that much more competitive.

Have your own tips for reducing the monthly cost of your smartphone? Please share in the comments.

There are 7 comments for this article
  1. Allegra.Ringo at 7:29 pm

    I use the lowest-tier Virgin Mobile plan, and then use Google Voice for the majority of my calls. I only have 300 minutes with Virgin, but I never even come close to using all of them. I only pay $25 a month, which is awesome. 8)

  2. ashleywade at 11:53 pm

    …I’m still on a family plan with my parents. Individual plans are insanely overpriced, and I’d be paying 3x the amount I do now if I were on my own plan. I’d rather just send a check home every month.

    (don’t judge).

  3. MerissaA at 10:55 pm

    Check and see if your workplace offers a discount. We save an extra 10% each month off our bill thanks to my husbands workplace discount!

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