Optimize Your Cell Phone Plan: The Wireless Efficient Frontier

The other day while I was trying to help someone find a cheaper cell phone plan, I realized two things:

  1. There are way too many different options these days. Most are MVNOs that buy bulk minutes and data from the major providers, and many of those are simply clones of each other.
  2. Trying to find the best cell phone plan is similar to the efficient frontier concept in investing. There, you try to achieve the highest return for a given amount of risk, or you try to minimize the risk you have to take in order to get a given return. Anything else is sub-optimal; here’s a quick chart illustration.

In the case of cell phone plans, you’re either trying to maximize features (coverage, phone selection, minutes, texts, data allowance) for a given budget, or more often you’re trying to minimize the cost for the features that you “need”/want.

I’ve mentioned several good deals from various providers, covering everything from a $2.50 a month basic plan to simply saving $10 a month on your “name brand” major provider plan via corporate or student discounts. Below, I’ve placed them all on a single chart of cost vs. features. This is a work-in-progress, but hopefully this will help folks find better alternatives and save some serious money over time.

The Details

  • Details on Page Plus Cellular Basic Plan. This plan is best for super-light users or emergencies, as the $30 a year ($2.50 a month) option gives you under 300 minutes a year (25/mo avg). No data included.
  • Details on T-Mobile Prepaid Basic Plan. This plan costs a bit more at $100 a year ($8.33 a month), but gives you 1,000 minutes good for an entire year (83/mo avg). No data included.
  • Details on T-Mobile $30 Smartphone Plan. Plan includes unlimited data but only 100 minutes per month. Ideal for tech-savvy people who don’t mind making voice calls over data. Use unlocked GSM phones or buy direct from T-Mobile.
  • Details on Virgin Mobile $30/$35 Smartphone Plan. Includes 300 minutes and unlimited data per month, but you have to buy the phone direct from Virgin Mobile. iPhones get $5 off the usual $35 cost with auto-pay.
  • Details on Straight Talk / Net10 $45 Smartphone Plan. Unlimited talk, text, and minutes for $45 a month. Bring your own phone using a SIM card using either a AT&T or T-Mobile compatible GSM phone. AT&T sim card sales were discontinued, so you have to buy one on the secondary market like eBay at a slight markup. Net10 Wireless is a sister company that also has T-Mobile and AT&T sim cards available and a $45 unlimited plan with auto-refill.
  • Details on Verizon, AT&T, Sprint, T-Mobile Employee and Student Discounts. Check if you are eligible for discounts based on your work or student status using just your e-mail. You can keep your existing plan, the discount just gets added on. Save up to 20%.
  • The benchmark price is the retail price for a traditional postpaid plan offered by one of the major providers that own their own cell towers: Verizon, AT&T, Sprint, and T-Mobile. Currently these run about $80 a month for a single smartphone line.

Honorable mention: Ting.com is a Sprint MVNO that offers a pay-for-what-you-use style of plan, which makes it hard to plot on the chart. This plan can be a good value for those with moderate usage patterns and/or multiple lines, but you are limited to certain off-contract Sprint phones (no iPhones) or buying an unsubsidized phone direct from Ting.

I’m sure I’ve missed a few, so feel free to share what other plans offer good bang for the buck in the comments.

Comments

  1. Any idea if I can get an employee discount for my small business. 2 Partners and 1 employee? How do I sign up from the employers side?
    Thanks

    (my wife gets this discount and I checked she was ok). Thanks

  2. I saw this site while searcing the Howardforums (its a cell phone specific forum)
    http://www.allprepaidplans.com/
    Briefly looking over, it seems very thorough reguarding the bulk of plans out there. It also seems very overwhelming. Wish they did a top 10 best to make it less overwhelming

    Credit goes to petermarker from howardforums: http://www.howardforums.com/showthread.php/1803510-List-of-all-prepaid-plans-for-USA

  3. Mary Anna says:

    For my husband and I, we each have PagePlus’s ‘The 12′ plan. 250 texts, 250 minutes for 12 bucks a month. (I ran out of texts one month a few days early, but you can either start your next month early, or add a few dollars and pay per text.) It sure beats $150 bucks a month to Verizon! The other cool thing is the PagePlus is a MVNO that uses verizon towers – and you can use your old verizon phone if you like? (takes 15 minutes to get it switched over, but then, boom, you’re all set.) Big fan. Been with them a year now, and love how cheap they are.

  4. I use republic wireless which is an MVNO that uses Sprint. They charge about $19 a month for unlimited texts , minutes and data. They route calls over wifi when available and that’s how they keep the cost low and the phone automatically switches from Wifi to the cell network if the quality is of the connection is bad. The only downside is that it is on Sprints 3G network, not the faster 4G one and you are currently limited to only 1 type of phone.

  5. Technically you do have data on the Page Plus Pay-As-You-Go plan. Data is charged at $.99/MB. Admittedly, that is very expensive for data, but it is there if you need to use it. Texts are 5 cents each. The price of calls drops if you load a larger card into your account. The largest card is $80, which is good for one year ($6.66/month), and calls are 4 cents/min.

  6. Jason Quan says:

    Another pay as you go plan is H2O wireless. It’s 5 cents a minute, 5 cents a text and 30 cents a megabyte. When you buy $100 prepaid, the value lasts for a year. They also have monthly unlimited plans. It uses AT and T’s network, so you can use an off contract GSM iPhone with it. There is an annoying part of the iOS software that shows your remaining value of your plan, sometimes at seemingly random times due to push notifications and such. I turn my 3G data off so it’s not as annoying and turn it on when I know I can’t get a wifi connection. Handy with a freedompop device.

  7. I want to ‘ditto’ Mary Anna’s post. I like PagePlus for the same reason. And they let me have a smart phone with no data plan. I use the wireless at home and at work and hotspots, so I don’t often even notice that I’ve no data. I also use ‘The 12′ plan.

  8. As much as I’d like to go with a prepaid MVNO, i cannot make it work. I work in tech I need the latest iPhone every year. Here’s my current plan
    2-lines (family plan) with 550 minutes NO texting, and unlimited data (grandfathered) For $114 (including taxes fees and 17% corporate discount). Also included is a $450 subsidy on an iPhone every year.
    So, annually i get two lines and an iPhone for $1568. As much as i’d like to not give at&t $1568 a year, this just can’t be beat.
    The T-Mo $30 unlimited data plan comes close, at $1370 a year (minus tax&fees?) but there is no iPhone 3g or 4g in most areas for tmo. Plus, historically when the iPhone first comes out its only available on contract plans.

  9. Jonathan,
    I”m looking at your chart above and realized you’re not really making a fair comparison with prepaid vs. contract. The contract plans subsidize a new phone, thats a ~175-225 dollar a year value. You should really subtract $15 or so from the monthly rate for that.

  10. As for Virgin Mobile- I have purchased two phones (that I knew were compatible with Virgin’s service) from eBay and Amazon. You mentioned you had to buy direct from Virgin, but you can find plenty of Virgin phones on sites like Amazon.

    I think Virgin is one of the best compromises for someone who wants a decent smart phone without breaking the bank. You also missed Wireless Republic, which has similar prices and network (they use Sprint too) to Virgin.

  11. John, why was my post removed? A list summarizing the majority of the plans out there seemed relavant to the conversation and I don’t think I could be accused of self promotion since howardforums is a legitamite well established forum relating to cell phones- I doubt they have folks trolling blogs for free advertisement. In addition, I have posted on your blog in the past so I doubt you would see me as being a driveby troller.

  12. t-mobile has completely redone their plans; now they only offer $50/month
    individual plan;

  13. Republic Wireless

    $19.99 a month. Unlimited everything.

  14. Hey Jonathan, I see you replaced my intial post- I guess it must have looked somewhat suspicious. It must be a fultime job just keeping the spam out. Could you please remove this post and my second post which was asking why the first was removed? I think it looks confusing

  15. Republic wireless looks really interesting. Unfortunately sprint does not have good coverage in my area otherwise I would give them a try. I do see on their site that they do not have MMS. That is pity because I think it would be a good plan for my parents (they live in a more populated area) if it wasn’t for that (Using a separate app for text messaging would likely be confusing for them)

  16. @Rick – Your comment was in moderation, and was approved first thing in the morning when I got around to checking the comment queue. Usually anything with multiple links gets automatically filtered. Please see comment policy for details:

    http://www.mymoneyblog.com/comment-policy

    I did forget about Republic Wireless. I’ll add that during the next revision. I thought about getting it, but didn’t like the phone choices (yes, I’m a snob now that I use my phone all the time :)). Does anyone whose had it for at least 6 months want to do a user review?

  17. Prepaid plans may indeed often require special and more expensive phones, but many times you can use your current phone (Verizon to PagePlus, AT&T to Straight Talk/Net 10, T-Mobile to ST/Net10) or buy a used phone on eBay so that the cost is not that bad. I think a used iPhone 4 or Google Nexus or Galaxy S3 is very close to whatever is bleeding edge today.

  18. @kevin – I think you’d have to contact each provider directly and approach them through their business side not personal. For example, here’s a link to Verizon Business where they offer 8% off and waived activation fees.

    http://business.verizonwireless.com/content/b2b/en/business-promotions.html

  19. Hey Rick, thanks for that link you provided. I checked that website out (www.allprepaidplans.com) and that guy did a hell of a job.

  20. a suggesion. Can you put the comments in reverse chronological order so the most recent appears on top?

  21. I am considering Lycamobile, as the $29 for unlimited talk, text and data sounds pretty good. Also their pay-as-you-go rates also seem pretty competitive.

    http://www.lycamobile.us/en/national-plans

    If any of you have used it, would love to hear your experiences.

  22. Verizon has a prepaid plan for unlimited talk, text and very lame data for $50 per month. They recently added a 3G smart phone plan for $60 or $70 per month, depending on how much data you want. If you sign up for auto-pay, you get a $5 rebate each month. I’ve been really happy with the $50 service, since I’m a talker. Target, Radio Shack and Best Buy have phones for sale for these plans, or you can just use any Verizon-compatible phone you already have.

  23. I was with Verizon for many years but I just got tired of the nickel and dining me:

    (1) adding 30 upgrade fee
    (2) eliminating unlimited plan after upgrade
    (3) not applying corporate discount towords data after upgrade
    (4) and the final straw was eliminating early upgrade

    So I canceled Verizon and was slapped with 400 something ETF fee for two lines, which as a final insult inccured fees on top of fees (like Verizon recovery fee wherever this means) and became 500 something.

    I sold my Verizon phones to pay ETF and bought Nexus 4 with 30 5gb T-Mobile plan. And yes Verizon network is better, but not that much better to justify its price. I would take a B- Network with A grade price vs a A- Network and C- price

  24. ATT Go Phone: $25/90 days or $100/yr good for voice (10 cents/min) or data. Balance rolls over if you refill before expiration. Wait for last day to refill since new window starts when refill is done, NOT added at end of existing window.

  25. Boost Mobile: (Off Sprint Towers)

    $55/month; unlimited talk, data. Reduces $5/month every 6 months the bill is paid on time. No contract.

  26. I have been with RepublicWireless for over 1 year now. Absolutely love it! I use WiFi at home and WiFi at work and when I am driving (at a stop light, of course) it uses the Sprint 3G…I have had maybe 2 dropped calls in 1 year. I will take that for $19.00/month, no contract. I have traveled quite a bit, no issues, at least State side. It is a smartphone that does what smartphones do, a little bit of everything!

  27. I have Ting and you need to update your information. I have an Iphone 4s (you can use any Iphone, 4, 4s and even all the newest ones iphone 5 versions on their service, it just needs to be a Sprint Iphone. You can get excellent prices for Iphones in refurb (mine was like brand new!) condition from Glyde that are guaranteed to work with Ting but you may also buy a Sprint Iphone off ebay or elsewhere. I love Ting for I make only minimal voice calls and use Facetime the most with my own WiFi or any WiFi hot spot (Facetime calls using WiFi do not cost toward my monthly data usage, actually any data I use with WiFi is basically free). I’m not text crazy but the prices are very good even if you do text and you can get an app so that texting is free and won’t be part of monthly usage text charges. I’m hard of hearing so I much prefer Skype or Facetime so I can see the person talking. I also have other apps I’ve put on my iphone for the deaf and hard of hearing so that when I must use voice calls I’m able to communicate. I’m lucky, many of my family have iphones, including family in Norway and Australia and Facetime is a blessing for sure. It all depends on what you want to use your cell phone for…if you’re wanting to talk (voice calls) for hours at a time with endless friends, it may not be the cheapest mobile service provider for you.

  28. P.S. Before I recently switched to Ting (love it, love it!) I used Republic Wireless and they no longer offer the unlimited everything for $19. They now have several plans you can choose from, they aren’t as cheap as they used to be. And unless you upgrade (at full price) to the few newer smartphones they have added lately, you can’t “pick a plan” (you can change your plan up to twice a month). So, I was stuck with an outdated Motorola Defy XT and the old price of $30 unlimited unless I bought a new phone off of them. This and the fact that I got tired of people wondering (and sometimes getting annoyed with me) that I didn’t respond to a picture message they sent me. They do not have the capability in their special phones to allow you to send pic messages or receive them. If that doesn’t bother you, you may like their service. Also, they have zero call customer service, you must use email or their form on their website to contact them or hope someone in their customer forum (which forum is helpful) can help you with your problem(s). (you can’t sell your old phone you bought from them to anyone else, it’s hybird WiFi first then sprint towers second and is set up unlike other cell phones). I was happy with service in beginning but not after my only 1 year old phone I purchased from them no longer was letting me use data unless it was using WiFi and this seemed to be an issue, to me it seemed like a ploy to force customers to purchase one of their newer phones (full priced). So, I’m much happier being able to have an iPhone (or if I had wanted, to be able to choose from a myriad of other smartphones) and Ting customer service is the best so far I’ve ever encountered. Phone or email, they are beyond helpful and always get an agent with English as their first language (which everyone prefers but super important for me with my hearing loss even if I use my home phone (a CapTel for hard of hearing or deaf that can speak well) it’s software has problems understanding foreign accents.

  29. Nice post :) family plan from T-mobile will be a great offer and as much u bring more family memebers will be cheaper. thank you for sharing.

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