I have been a Verizon Wireless customer since 1999 when I bought my very first cell phone. Honestly, it’s been a great relationship and Verizon has been a great partner over the past 12+ years. But as they say, all good things must come to an end. That’s why last Friday, I broke up with Verizon.
You’d think ending a long-term relationship like that would be dirty and painful. You’d be wrong. It was quick, easy and I’ve never felt better!
I previously wrote about how I was paying way too much for services I didn’t use. I was fed up with paying so much for smartphone service so I decided to ditch my plan for prepaid service from Straight Talk Wireless. Now I’ll take you step by step through the process so that you can free yourself from the shackles of contracts and save yourself a whole bunch of money in the process!
Based on my conversations with people about this concept there is a broad stereotype that prepaid phone service is only for drug dealers and poor people. Free yourself from this thinking. The big service providers and their subsidized phones with two-year contracts are holding you hostage and sucking your bank account dry!
I admit, I did it for the longest time. But it’s hilarious to listen to people talk about “waiting until their contract expires” to “upgrade their phone”. It’s time to break free of the notion that renting our phones and phone service from the major providers is an acceptable business practice!
Another hangup people have is over coverage maps. The major carriers spend millions of dollars having a giant pissing contest with each other over who has the greatest amount of coverage. This is all well and good, but you as the consumer need to asses your individual needs. Do you really need the 99th percentile coverage that Verizon offers, and is it worth an extra $40-50 each month? Personally, there is a 0.00001% chance I’ll ever be in Mooseville, Alaska or Pigsass, Arkansas. So why pay to make sure I have coverage there? Is it really worth a 2 year contract to have coverage at your family’s cottage on the lake that you only visit one weekend per year?
Prepaid providers like Straight Talk are what are called MVNO’s or “Mobile Virtual Network Operator’s”. Basically what this means is, the major network providers (mainly AT&T and T-Mobile) lease access to their network towers to these MVNO’s who in turn sell their services to you, the customer under completely different pricing models.
The MVNO’s are all competing for customers without the luxury of locking people in to two-year contracts. So through the beauty of free-market capitalism the competition between these carriers allows us to get the same coverage we’d get on AT&T at a fraction of the cost!
Another benefit of going prepaid is that we can change providers as much as we want. If a better deal comes along next month we can make the switch at the drop of a hat!
Ok, I’m interested. How do I switch?
I’m glad you asked! Here’s what you have to do:
- Figure out how much time you have left on your current contract. One of the beauties of contract life is that there is a “No, you can’t stop using our service!” fee. Each month into your contract this fee gets lower, so if you’re not out of contract yet, the closer you are to the end the cheaper it will be to escape.
- Buy an unlocked GSM phone. I chose the Nexus4 from Google, but any GSM phone will do. This will allow you to use any provider running GSM technology (AT&T, T-Mobile and anything in Europe). You can get a phone on your own if you want the latest and greatest. Or through the prepaid provider you choose, as many of them have stepped up their phone offerings recently and have phones such as the Samsung Galaxy S2 and the iPhone 4S.
- Port Your Number into Google Voice (optional). For a one time $20 charge you can port your current number into Google Voice. This takes about one day and will allow you to keep your current phone number. So no matter how many prepaid carriers you switch to you don’t have to keep having your friends and family update their contact books. After you port your number to Google Voice you can easily set it up to forward all the calls, texts etc… from that number to your new prepaid (or any other) number. Warning: Porting your number into Google Voice will cancel your current plan/contract. Only do this when you’re absolutely ready to kill off your contract!
If you choose not to go the Google Voice route, you can still keep your number. You’ll just have to port it from carrier to carrier each time you change providers should you explore more than one prepaid company.
- Choose the prepaid plan that’s right for you. Maybe this should be 3 and Google Voice should be 4? I don’t know…I did them simultaneously. I chose to go with Straight Talk Wireless and their $45 bring your own phone, unlimited everything plan. 1 Straight Talk has the cheapest prepaid unlimited talk,text and data plan that I found. Since they’re distributed exclusively through Wal-Mart, you can also be sure that they’re not going to disappear anytime soon and will (knock on wood) have better customer service available should a problem arise.
- Enjoy your phone as you normally would! Or maybe even more, because you’ll be doing it for half the cost!
So, What do the savings actually look like?
I did some mock calculations in my initial post where I started to think about switching to a prepaid smartphone plan, but here is what my savings will actually look like over a typical two-year contract period.
Verizon Wireless: 16GB Samsung Galaxy S3 (most comparable phone to the Nexus4 I purchased): $199 with 2yr contract. Unlimited Talk, Unlimited Text, 2GB Data “Share Everything Plan” $80 ($100 – 20% corporate discount)
$199 phone + ($80/mo *24mos) = $2,119
Straight Talk Wireless: 16GB Google Nexus4 : $350 Port current number to Google Voice: $20 Unlimited Talk, Unlimited Text, “Unlimited” Data: $45/mo + initial cost of SIM card $10
$350 phone + 30 (SIM card & Google voice) + ($45/mo*24mos) = $1,460
Over the course of a typical two-year contract I’ll be saving $659! That’s even more than in my initial calculations! (If I buy 90 day refill cards from Straight Talk instead of 30 days, the monthly cost drops to $41/mo…increasing my 2yr savings to $755)
The beauty of going prepaid (besides that nice lump of cash) is that if it turns out that Straight Talk sucks, or another provider comes along with a cheaper plan, then I can dump them at the end of any given month and try out any of the other prepaid MVNO carriers out there with no skin off my back. If it turns out that they all suck, and I really miss Verizon for whatever reason, then I can always go crawling back with my tail between my legs and sign a new contract. I really don’t see that happening, as things are going smoothly so far. Not to mention, an extra $30 in my pocket every month is a nice motivator and also helps with my goal of saving 50% of my income!
That’s it! So, if you’re ready to stick it to the man by becoming an active, intelligent consumer. Then say goodbye to your postpaid two-year contracts and step into the market driven world of prepaid smartphone service.
I will be updating and adding to this post with my experiences and any problems I run into. So if you want to follow along make sure to bookmark this post!
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