Many people are shocked when I tell them that my smartphone’s service bill—which includes unlimited texting and unlimited data—is $25 per month. That rate, by Virgin Mobile, isn’t available anymore, but the good news is that you can still purchase a $35 per month plan from Virgin or an even cheaper, $19 per month plan from Republic Wireless.
Here’s the catch: Since you don’t sign up for a contract, your phone purchase is entirely unsubsidized, and you’ll have to pony up the full retail price. For example, a 16-gigabyte iPhone 4S is $100 with a 2-year contract from Verizon Wireless. The cheapest plan, at $80 per month, offers 300 megabytes of data per month and unlimited talking and texting. The same phone model, when purchased with a Virgin Mobile plan, costs you the full $650 and offers unlimited data and text but only 300 minutes of talking.
Some back-of-the-napkin arithmetic, though, shows that the Virgin Mobile plan begins producing significant savings after the first year. The Verizon plan is an additional $45 per month. Let’s assume, for simplicity’s sake, that the Verizon plan’s limited data and the Virgin Mobile plan’s limited voice minutes cancel one another out. (Obviously, the actual importance of either is determined by your personal phone-use habits.) After one year on the contract, the Verizon plan is an extra $540—virtually equal to the $550 difference in the phone model’s purchase price.
Real savings begin in the second year and will continue to accrue year after year, and the savings are even quicker to come—and much more pronounced—when you consider cheaper models of phones from Virgin. While many Android-based smartphones can be had for free when signing up for a 2-year contract with the big phone companies, Virgin Mobile offers some for as low as $50. So, when matched against a free phone on Verizon’s cheapest plan, you can net a savings of $490 in the first year alone.
UPDATE 11/19/2012: Republic Wireless, a start-up service provider, is now taking pre-orders from the public on its new phone; with a service plan costing $19 per month–and offering unlimited voice, texting, and data, no less–it is without a doubt the cheapest smartphone service plan in the U.S. Granted, only one phone model is currently available (the $250 Motorola DEFY XT), but the rock-bottom price-tag on the service is still astounding.
Photo by: Andrew Magill via a Creative Commons attribution license