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If saving money is one of your new year’s resolutions, then I suggest you start shopping for new smartphone service.
Service providers like T-Mobile and Republic Wireless shook up the wireless industry in 2013 with truly competitive service pricing. Bigger players, such as AT&T, have already started to respond. And I suspect the market will get even more competitive in 2014. What this means for consumers is that it’s a good time to go shopping.
In this edition of Ask Maggie, I help a reader figure out his best option for slashing his monthly cell phone bill. And I also offer some advice to a Verizon Wireless subscriber contemplating paying full price for a smartphone to keep his unlimited data service.
It’s time to start shopping
Dear Maggie, My wife and I are both out of our contracts with AT&T. Mine ran out in July on an HTC Inspire 4G, and her Apple iPhone 4S contract ended last month. Between the two of us, our wireless bill is $180 per month. Sometimes it’s even more if we receive a lot of text messages, since we don’t have a texting plan. We still have AT&T because the last time my wife upgraded, she wanted to keep her “unlimited” data plan. But the data-caps and throttling on that service has soured us on them as a provider.
We had been holding out until her contract was up, even though I’ve been desperate to dump the HTC phone for quite some time. Now that we have hit that point we’ve been having a hard time trying to decide which provider to pick to get the best phone and deals on plans.
I would like to get a Samsung Galaxy S4, and she wants to upgrade to the iPhone 5S. But we need to keep costs down. We cannot afford to buy phones outright, so we will have to go under contract again. We are currently trying to compare Verizon, Sprint, and T-Mobile against various prepaid cellular providers, like Virgin and Cricket. We’ve looked and can’t seem to get the costs down too much, even going prepaid and getting discounts through either of our jobs. Plus at least one of the prepaid companies (Virgin, as I recall) doesn’t even seem to carry the Galaxy S4.
I was hoping for some direction on a provider with decent coverage, better prices, and who won’t saddle me with an ancient phone that will get abandoned when it comes to updates. Finding providers with the new iPhone seems to be a no-brainer, but I’ve got a small investment in the Google Play and Amazon Apps stores, plus I really like having a larger screen than Apple feels I need. Also, we will probably need to add text messaging to whatever plan we get, since cutting it out of our AT&T plan to save money has ended up costing us more when friends, family or co-workers text us.
Any advice is appreciated.
Thanks, Cary
Dear Cary, I have some good news for you and other mobile bargain hunters out there. There are some very good deals available now from wireless operators. And it’s not just the smaller prepaid providers offering some terrific deals. Big players, such as AT&T and T-Mobile, are also offering more budget-friendly plans.
Lori Grunin/CNET
Depending on where exactly you live, for the devices you are interested in buying, T-Mobile is likely to offer you the best deal. Since the launch of its “UnCarrier” strategy in March of this year, the company has aggressively priced its service plans and also made it more affordable for customers to buy some of the hottest smartphones, including the two you and your wife are interested in buying.
Don’t be scared off by services that require you to pay for your device in full. The truth is that even when you are on a contract plan and you only pay a $100 or $200 for your device, you are still paying the full price of that smartphone. Verizon Wireless and Sprint Nextel bundle the cost of their phones into the monthly fee they charge you for your service.
The big difference between Verizon and Sprint and AT&T and T-Mobile is that AT&T and T-Mobile now offer you a discount if you buy your smartphone outright or you finance it over time. Both T-Mobile and AT&T offer a discount to customers who already own their phone.
And right now, to sweeten their offer, T-Mobile is offering a special on the two devices you are interested in buying: the Apple iPhone 5S and the Samsung Galaxy S4. For a limited time, you can finance these devices with no interest and without putting any money down upfront.
So instead of paying the full $650 it would cost you to buy one of these phones, you can make 24 monthly payments until the devices are paid off. And at the end of the 24 months, you will own these smartphones. If you continue service with T-Mobile after the phones are paid off, you’d just pay the service fee and you wouldn’t be required to continue making device payments.
Even with the device payments included in your monthly bill, you will still end up saving between $30 to $50 per month as compared to your current plan just by switching to T-Mobile’s service.
If you opt for the least expensive and lowest bucket of data from T-Mobile, you will spend $80 a month for service for two lines on a family plan. This will include unlimited voice minutes, text messaging and up to 500MB of 4G wireless data for each phone line. For $20 more a month, you can get unlimited 4G data service. The iPhone 5S will cost you an additional $27 a month and the Samsung Galaxy S4 will be about $25 a month on top of the service fee.
In total, your monthly bill with T-Mobile would be $132 a month if you went with the cheaper option and it would be $152 per month if you wanted unlimited data.
Out of the major wireless carriers, T-Mobile will offer you the best deal. But T-Mobile isn’t for everyone. You need to make sure the service is available where you live and work, as well as where you plan to travel. If T-Mobile service is spotty or doesn’t work where you need it, there’s no point in choosing that service, even if you can save a few bucks.
As I mentioned above, you should also consider AT&T. I know you are not happy with the carrier, but it sounds like you are satisfied with the service and coverage with AT&T, but are unhappy with their business practices.
Josh Miller/CNET
I understand how you feel. It hurts to give money to a company every month who you feel isn’t looking out for you. But if you can swallow your pride and take a look at the company’s new pricing, you might change your mind.
In December, AT&T announced its new Mobile Share Value plans, which now offers customers a $15 a month discount if they already own their phones. The company also introduced a new option for its device financing programming called AT&T Next. Now, you can buy a smartphone from AT&T without any money down and you can finance the device over 18 months. In order to keep the monthly cost down, AT&T figures the monthly price for the new device over 26 months.
If you are willing to give AT&T another chance, all you have to do is change your service plan and you can still save a significant amount of money every month. As example, if you subscribed to the 1GB AT&T Mobile Share plan and bought your smartphones using AT&T’s 18-month Next program, your monthly bill will be about $145 a month.
This isn’t as cheap as T-Mobile’s service, but it’s still $35 less per month than what you are paying under your old AT&T plan. And the good news is that you know that the AT&T service works where you live and work, since you’ve already been using the service.
Of course, as part of this deal, your wife will have to give up her unlimited data plan. But if she is like most people, she doesn’t actually need the unlimited data anyway.
Different device could save you money If you are willing to be flexible regarding your smartphone choice, then there are other options that can save you money.
For example, you can get Google’s Nexus 5, which is a comparable device to the Samsung Galaxy 4, for $350 on the Google Play Web site. If you use it on AT&T or T-Mobile it will end up costing you about $300 less per device than if you bought an Apple iPhone 5S for your wife and a Samsung Galaxy S4 for yourself. You could save even more if you bought the less expensive Moto G.
Another option for you, if you’re willing to forgo the Galaxy S4 and iPhone 5S, is to sign up for service from the low-cost provider Republic Wireless. This carrier uses a mix of Wi-Fi networks and cellular service to offer a very low-cost service. Up until recently, the company only offered a very small number of low-end Android smartphones.
Republic Wireless
But in November, the carrier began offering the Moto X, a high-end smartphone that is also available from major wireless operators. Republic Wireless charges $300 for its version of the Moto X. And it offers a range of services from a basic voice and text messaging service for as low as $5 a month to a higher end, unlimited data service for $40 a month.
If you and your wife are willing to get the Moto X instead of the Samsung Galaxy S4 and the Apple iPhone 5S, then this is a deal that may be too good to pass up. In total, the most expensive service on Republic Wireless, plus the cost of the phones over two years will cost you about $650 less than what you’d pay on T-Mobile’s most basic plan.
Again, there are caveats. For one, you have to be willing to get the Moto X instead of the other phones you mentioned. And the only other potential drawback is that Republic Wireless uses Sprint’s cellular network when Wi-Fi is not available. So if you live in an area where Sprint’s network is not so great or simply unavailable, this is not the service for you.
Stay tuned for more about Republic Wireless in my next Ask Maggie column. It’s an interesting service that has the potential to save a lot of people a lot of money, but it’s not for everyone.
The bottom line At the end of the day, when you are shopping for new service, do your homework. The best way to comparison shop when you know the phone you want to buy is to go through the purchase process on each carrier’s Web site to see how much each operator charges. This will give you an apples-to-apples comparison.
For the most part, all the major wireless operators and many of the prepaid and regional carriers offer plans with a flat rate for unlimited text messaging and voice minutes. And then you pick and choose how much data you want to buy. In the case of AT&T and Verizon, you and your wife can share data. With T-Mobile and Sprint, you will each be allotted your own buckets of data, but there are discounts available for subscribing to a family plan.
One thing to keep an eye on when you are comparison shopping is the one-time activation fee you are expected to pay. These fees can be around $35 per device. And they often apply to new customers as well as customers renewing their subscriptions.
While researching your answer to this question, I noticed that T-Mobile and AT&T are currently waiving those activation fees. But T-Mobile is still charging a $10 SIM card starter kit fee. It appears AT&T waives the activation fee for customers who finance their devices through the AT&T Next plan, but it still charges the fee for people signing a contract and buying the device for $200.
I hope this advice was helpful. And good luck!
To keep Verizon’s unlimited data plan or not?
Dear Maggie, I still have an unlimited data plan with Verizon Wireless. I usually use about 500MB per month. I’d like to upgrade to an HTC One. Am I crazy to give up the unlimited plan, or crazy to pay full price for the phone given my usage? I am inclined to pay full price and keep the unlimited usage.
Your thoughts?
Thanks, John B.
Dear John B., The answer to this question depends on whether you want a new phone or not. If you really want a new smartphone, then you’re crazy to keep your unlimited data plan, because it will require you to buy a new phone at full price.
But if you’re willing to keep using the phone you have or someone will give you an HTC One for free, then go ahead and keep that unlimited data plan, since it will likely cost you the same amount as what you’d pay for one of Verizon’s newer plans.
Sarah Tew/CNET
But the crux of this question really comes down to whether you should pay full price for a new device just to keep your unlimited data plan on Verizon. Given your situation where you are only using 500MB of data per month, I’d say it’s not worth it.
Here is why. For $80 a month, you can get unlimited voice and texting and 500MB of data from Verizon. The cheapest plan you could be subscribed to on Verizon with unlimited data would cost you about $70 a month. This service would provide a limited amount of voice service, no text messaging and unlimited data.
But in order to keep this plan, Verizon is forcing you and all those other unlimited data plan customers out there to buy a device at full price. Taking the subsidy on a new phone voids this unlimited data deal. On Verizon’s Web site the HTC One costs $450 without a contract. With a contract, this device is only $50 a month.
What this means is that you’d be paying $400 just to keep a service that you don’t really need.
What’s more, my guess is that Verizon is going to continue making it difficult for people to keep these older unlimited data plans. And I wouldn’t be surprised if at some point the company stops allowing customers to keep these old plans, even if they buy new devices at full price.
The bottom line here is that you don’t need the unlimited data, so don’t waste your money paying full price for a new HTC One. Take the subsidy and downgrade your service. You’ll save $400.
Good luck! And happy New Year!
Ask Maggie is an advice column that answers readers’ wireless and broadband questions. The column now appears twice a week on CNET offering readers a double dosage of Ask Maggie’s advice. If you have a question, I’d love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put “Ask Maggie” in the subject header. You can also follow me on Facebook on my Ask Maggie page.
