Since long before the invention of the selfie, the only way to get a phone was to plunk down for a lengthy 2-year contract. Want to switch carriers or get the latest phone before your two years were up? Tough luck. All that’s changing now, though, as it’s getting easier all the time to avoid lengthy cell phone contracts and get your service on a month-to-month basis. Are the days of 2-year contracts over, or are there still good reasons to get your next iPhone or Android that way?
Once a month, eHow Tech editor Dave Johnson faces off against Rick Broida, who writes about technology for CNET, PC World, and Wired. Follow along as they tackle this question from opposing corners.
Rick: The 2-year cell phone contract is about to go the way of the VCR, and I say good riddance. Five years ago, the whole subsidized-phone arranged marriage (cheap phone, expensive service for two years) was probably necessary to drive adoption, but the reality is it’s time for carriers to stop screwing their customers. Why on earth would I lock myself into 24 months with, say, Verizon for the “privilege” of paying $70-80 per month? There are so many other options now.
Dave: First of all, I’m pretty sure my parents still have a VCR, so I don’t know what point you’re trying to make. That said, I’m inclined to agree with you. Even though all the major carriers (AT&T, Sprint, T-Mobile, Verzion) butter their bread with 2-year plans, other options are starting to look mighty attractive. But before we start nailing the Contract Coffin shut, I feel like we should at least give the existing cell phone system we have used for years the benefit of the doubt. After all, carriers make us sign a 2-year contract not because they’re mean, but because it takes that long to pay off the handset they gave you. Think back: You probably paid $99 up front for a $500 iPhone when you were in the AT&T store, right? AT&T didn’t just give you the handset at an 80% discount. You need to pay for it, a few bucks a month, like an old-fashioned lay-away plan.
Rick: Wrong, sir! The carriers are mean! Or at least greedy. They hook customers with the same bait printer manufacturers use: give ‘em the hardware cheap, but soak ‘em on the ink. The Big Four carriers have made money hand-over-foot by overcharging for their “ink”–voice calls, text messages, and data. And forcing you to pay those prices for two full years. The very existence of mobile virtual network operators (MVNOs) like H2O Wireless and Straight Talk, which lease the same networks but offer cheaper service rates, proves my point. With so many of these options now available, anyone who goes the contract route is a sucker, plain and simple.
Dave: First of all, no, MVNOs do not prove your point. MVNOs don’t generally give brand new handsets to customers; they deal in refurbs and sell the handsets outright, so their costs are dramatically lower. That’s like claiming that stationary stores are ripping you off just because I’m willing to sell you a notepad I’ve already scrawled on at a deep discount.And there’s still a lot to be said for dealing with a traditional contract. Better quality service and wider coverage areas, for starters. Why? Because most MVNOs willing to sell you a month-to-month plan for $20 or less leases bandwidth from Sprint. Can you successfully place a call on Sprint anywhere in the US?
Rick: Full disclosure: I’m a Virgin Mobile subscriber, meaning I’m on Sprint’s network. Overall coverage quality and network speed: mediocre. But you know what? I’m paying $30 per month for more or less unlimited everything. (The “less” part is 300 voice minutes, of which I use about 100 per month.) When I was with AT&T just last year, my monthly bill was $80. So can I live with slightly poorer service if it means saving $600 per year? Damn right. And I’m connected to Wi-Fi 95% of the time anyway, so who cares if the data network isn’t at the top end of the 4G spectrum? Saving money sometimes means sacrificing a little. And, by the way, do your homework: there are lots of MVNOs for AT&T and T-Mobile. Consumer Cellular, Cricket, Giv Mobile, H2O Wireless, Straight Talk…shall I go on?
Dave: Okay, you named a few, but I’m worried you pulled a muscle stretching so much. Consumer Cellular caters heavily to seniors, for example — which isn’t necessarily a bad thing, but likewise I’d have reservations about Straight Talk due to online reviews complaining about data throttling and questionable customer service. My point is that when you leave the 2-year-contract reservation, you can land in murky waters. Because that’s a great analogy, and don’t question it. But I worry that we’re not saving a ton of money with these these options. If you don’t want a contract, you probably want to conserve cash. Suppose I want an iPhone 5s from Cricket, for example. I have to pay full price — $600! My first month off-plan just bankrupted me, sir. Isn’t the real excitement with a plan from, say, TextNow, where I can get a decent Android phone for $200 (or less) and then pay under $20/month without a contract?
Rick: You and your senior-bashing. I’m telling your mother! TextNow and Republic Wireless are two great examples of how you can get a really good (forget decent) phone at a reasonable rate, then pay dirt-cheap monthly rates. Without a contract. But you’re ignoring another advantage, and that’s bringing the phone you already own. Want to keep, say, your post-contract iPhone 5? Guess what? You own it now! So shop it around to the carrier that has the best plan. And even if you want something new and state-of-the-art, you can get amazing unlocked phones like the OnePlus One for as little as $299. Your argument holds about as much water as a spaghetti strainer.
Dave: I’m not arguing that there are great deals to be had outside the walled garden of an AT&T or T-Mobile 2-year plan. I’m just saying that you should tread carefully. If you want to bring an existing phone to the party, sometimes you can’t; you’ll have to shop around to find a wireless provider that can work with the phone you already own. Getting a new phone? Your choice is generally to buy an expensive handset at full price or get a reconditioned phone (read: used) at a bargain price. And some of the cheapest plans, like the ones from OnePlus and TextNow, rely on primarily making calls over Wi-fi and use the Sprint network. None of that’s bad or a show-stopper, but it takes a lot more research than just plunking down for a traditional contract. Buyer beware.
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