How I'm Saving $700 on Cell Phone & Home Phone Service

Nexus 4

You may not think about it now, but many consumers are starting to change the way they think about their cell phones, their wireless carriers, and contracts.

Over the next 2 years, here’s how I’ll save about $700 on my smartphone service, while enjoying the peace of mind that comes from being contract free and having unlimited data:

iPhone & AT&T
In September 2011, I had fulfilled a two year contract with AT&T and their iPhone 3GS. I had nothing but good feelings about the phone and AT&T’s service. I enjoyed the unlimited data, and I barely went over my monthly 300 minutes of available talk time.

Then AT&T announced they would no longer offer an unlimited data plan. While I was contemplating what to do, they never announced what would happen to customers like me who were finishing up contracts. Would we be forced to buy into a 2 year contract with data caps or would we be able to keep our unlimited data?

Android & HTC Droid Incredible 2
With a nine month old baby and a wife to help support, money was tight (and it’s only gotten tighter). Although I was happy with my 2 year old iPhone 3GS, I was interested in a new phone with a bigger screen. At Supercuts, I picked up an offer for a free phone with a new contract. With the exception of a few brand new, top tier phones, there was a good selection of Android phones to choose from. I knew I wouldn’t be able to afford a new phone anytime soon, so jumped on the free phone offer and chose a Droid Incredible 2, which at the time had good hardware specs and was running a recent version of Android OS. The only drawback that I saw was that it was not a 4G phone. But I was happy with the iPhone’s 3G speeds. I didn’t really care about 4G, especially since that would have made it easy to burn through the 2 gigabyte data cap that I signed up for when I switched to Verizon and got the new Droid Incredible 2.

After I moved from AT&T to Verizon, I got a call from AT&T asking if they could talk to me about why I switched. In a roundabout way, the rep told me that an unlimited data plan would have still been available to me. One thing I will never understand about cell phone companies is why don’t they reach out to their valued customers before their plans expire and offer them an incentive to stay with them? In a 2 year period, we pay these companies an amazing amount of money, yet they basically ignore us or try to up-sell us on new services. They should be finding ways to thank us for our business.

Back to Verizon and my Android phone:
Quickly, I realized the 2 gigabytes of data in my Verizon plan was not enough for me to really enjoy the smartphone experience. When I would stream music in my car (from my collection at home), quickly, I’d find myself getting dangerously close to reaching the 2 gigabyte cap.

Although I loved the new power I had with Android and all the great ways to connect to my content on my home server, I found myself left behind as Android improved on other devices. At the end of 2011, HTC announced an Android 4.0 (Ice Cream Sandwich) update schedule that included my phone as one destined to get it. The update date came and went, and as of May 2013, my phone was never updated. This changed my thinking about cell phone carriers, long term contracts, and their own versions of Android. They carriers customize Android so drastically that it’s a major undertaking to apply their skin to a new version of Android and push it out there. That’s why Nexus devices are so coveted.

Nexus phones and tablets receive updates direct from Google. There is no waiting period for the carrier to reprogram and skin Android. Once Google releases a new version of Android, Nexus devices receive it immediately. What you get is an authentic Android experience, not a carrier’s version of Android with all sorts of extra bloatware loaded on and ugly skinning.

For a year, I waited and strategized about how to beat the system when my time came. Here’s what I decided:

Nexus 4 & Amazing Savings on T-Mobile Pre-Paid
I decided to buy a Nexus device for quick Android updates. The Nexus 4 can be bought directly from Google for $300 (8 gig version) and $350 (16 gig version). It’s no longer the top Android phone. As of this writing, that title is shared by the Samsung Galaxy S4 and the HTC One. But it is a quality phone with plenty of power to run anything fast and smooth. Why would I consider paying $350 for a phone when my last phone was free? Because with the plan I chose, I will save hundreds even after an upfront phone purchase.

My previous phone was free, but after 2 years of the least expensive service Verizon offered (about $75/month after taxes), the service cost me about $1,800.

My Nexus 4 cost $385 after taxes and shipping. But here’s where I save big money:

My wireless service is a T-Mobile $30/month plan with no commitment. I can cancel anytime and move to something better, should something better present itself. Over two years, my service will cost $720 as opposed to Verizon’s $1,800. $720 for service plus the cost of the phone ($385) is $1,105. I am on a path to save almost $700 over my last two years with Verizon.

You may wonder what level of service I’ll get for only $30 a month. In terms of data, it’s one of the best phone plans out there! It includes unlimited monthly data. The first 5 gigs are high speed using T-Mobile’s HSPA+ network. After 5 gigs the speed is throttled. But 5 gigs a month should be enough! And I have the peace of mind that if I need more, I won’t pay a ridiculous fee for it. The data plan includes unlimited texting! On Verizon, I opted not to pay extra for a texting plan (so all texts cost me extra) and I was still paying $75/month!

The compromise with T-Mobile’s pre-paid $30/month unlimited data plan is you only get 100 minutes of talk time. I can live with that. I’ve already set up a home phone system giving me completely free, unlimited long distance calling within the U.S. & Canada using Google Voice and a little box called the Obi100.

Obi100

Peace of Mind
Now I have peace of mind that comes with an unlimited, affordable data plan. I’m free from a cell phone contract, and I can buy a new phone whenever I want without paying an early termination fee to my wireless carrier. I hope you’ll think about your current plan. Are you getting screwed in an oppressive contract? Ask me about pre-paid. I’ll be glad to help if I can.

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