Colin Nederkoorn's Blog

Cut your iPhone bill from $107 to $45

How would you like to cut your iPhone cell phone bill by over half? Mine went from $107.11 in July to $45.

After 2 years on AT&T, you can finally get out

In July my 2 year contract with AT&T came to an end. I bought my iPhone 4 in July 2010 for $199. Then I paid ~ $100 a month for wireless service with AT&T until I canceled in July 2012. Over the two years I was locked into a contract, my iPhone cost me about $2600.

But the iPhone 5 is just a few months away. Why try to switch now?

I knew in July as my contract came to a close that the iPhone 5 was coming out soon. So, what to do? I wanted to get off AT&T after many years of dropped calls, and full bars but non-existent data. I live in New York City, and AT&T isn’t great here.

Option 1: Virgin Mobile - disrupting the contract cell phone market

A few months ago Virgin Mobile started selling the iPhone 4S. The difference between them and everyone else is they sell the iPhone at full price. Also, Virgin is a Mobile Virtual Network Operator (MVNO). They buy service in bulk from Sprint to resell to other people. Sprint (Virgin’s backbone) & Verizon are both on CDMA, but AT&T isn’t. So a Virgin Mobile iPhone can’t work on AT&T.

I considered spending the $549 on the 8gb iPhone 4s. If you give your credit card number to Virgin, your monthly plan is as low as $30 a month for unlimited data and 300 minutes.

Graph showing break even

After just 5 months it’s cheaper to have bought your phone for full price on Virgin Mobile.

How much could I resell a Virgin Mobile iPhone 4s after the iPhone 5 was released?

It would take me almost 8 months before I was break even on the switch & the cost of the phone was paid off (I’d be saving $70 a month vs. my AT&T contract rate).

But as soon as the iPhone 5 came out, the 4s would drop in value significantly, and a used one would fetch even less. It seemed like a low-ish risk. I could sell it for $409 to break even after 2 months. But I had another concern.

How good is Sprint’s network in New York City?

Fact is, I don’t know anyone who uses Sprint. Was I going to have the same problems of dropped calls and spotty data that I have with AT&T?

Option 2: Kill time with Straight Talk, An AT&T MVNO

After some research and a hacker news thread where the user Zdw linked to an Ars technica article, I learned about Straight Talk.

Straight Talk is an MVNO that runs on AT&T’s network. Same deal as Virgin… different network. In this case, all I would have to do is swap out the Sim Card on my iPhone to get service.

DONE

I ordered Straight Talk and have been using it for a few weeks. Here’s what you need to know:

You need to pay for the sim card to get started. It cost me $65.31 for the sim card + the first month of service. I ordered on August 5th (Sunday), it shipped on August 7th, and I got the Sim card on August 9th from Fedex.

You’ll need to tweak settings on the phone to get data. Specifically going to this site called Unlockit to get the settings for data on to the phone. It doesn’t require jailbreaking, and it works well when you follow instructions on this wiki.

Oh, and there’s no visual voicemail. I send my voicemail to google voice, they do speech to text and email me messages, so it wasn’t an issue for me.

So, there you have it, a $45 a month iPhone bill

Service wise, it’s pretty comparable with AT&T. In all honesty, data seems a little spottier but overall, I’m just biding my time until the iPhone 5.

So will YOU switch to Virgin Mobile when the iPhone 5 comes out?

Assuming the iPhone 5 is available on Virgin on day 1, I’d consider paying full price and buying from them. I believe that if the Sprint network is bad, you can switch from Virgin to Verizon (Can someone confirm this?).

Contracts suck, and will make you bleed.

$1269 for 2 years on Virgin Mobile ($549 phone + $30/mth service) is a no brainer vs. $2600 on AT&T ($200 phone + $100/mth service).

You could even replace your phone once a year and still be ahead.

So what will you do?

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