I am going PREPAID cellular plan ...

Currently, with T-Mobile, I am paying $49.99 family plan, which gives me 2 lines, 500 minutes, free T-Mobile to T-Mobile calls, free nights and weekends. I pay extra for my 5GB data plan ($25) and my wife is using the 200MB ($12). Plus another $4.99 for each messaging plan. So overall, I am paying around $100 per month. My family plan is an old plan (grandfathered), so I also get the full discount for new devices in I choose to extend the 2 year contract.

Now, my plan is not bad at all, $100 for 2 persons - it is actually considered to be quite awesome - since most my friends who have newer plans on T-Mobile (or other carriers) usually pay between $80 or more per person. So basically almost half of what most of my friends with smartphones are paying.

Now, let's consider the overall ownership cost over 2 years - since that is the length of the standard cellphone contract. If I pay $279 for each device (assuming Samsung Galaxy S3), add the monthly payment, over 2 years, I am paying about $2,950+. Of course, that is cheaper than my friends who is paying $110 per month for their family plan. But, I plan to reduce the overall cost some more. How? By going PREPAID!

To each their own, but after assessing my needs (getting some stats from my bills for the last 6+ months), I think getting the Monthly 4G plan for $30 will be sufficient for me (and my wife). This plan will get me 5GB data, unlimited text and 100 minutes voice. So for both of us, that will be $60 per month - without contract. There is a drawback to this - that if I buy a new device, I have to pay full price without any discount. So that means $600 for Samsung Galaxy S3. So in short, no contract, I am paying cheaper per month, but paying 3+ times IF buying a new device. But what is the overall 2 years cost of ownership? Let's assume we both buy GS3 and paying $30 Monthly 4G plan - which totaling $2,640 - a saving of $300 over 2 years. It looks a small saving on paper, but in reality, it is actually a pretty good deal. Let's list down the benefit:

• No contract. Only pay as needed. So the potential saving here is actually larger. If I think for the next month that I will be in a WiFi bubble, I may switch to $10 pay as you go ans save some more. If I am traveling, I can switch back to the Monthly 4G etc. 
• In a contract deal, if I am not getting a new device once my contract is up - this means that I am giving free money to the carrier, since the cost of the phone is factored in the monthly bill. With no contract prepaid, I don't have that burden. This also means that if I elect to switch carrier or get a new cellphone/device, I don't have to wait until the contract is done.
• My wife data plan will get an upgrade, from 200MB per month to 5GB. Now, I am assuming that she needs that 5GB - if she does not (because of WiFi), she can switch to a cheaper pay-by-the-day based on usage.
• From 300 texts per month to unlimited texts. This is also assuming we need that. I mostly do not need it, but there is no plan with voice and data only. 
• If spending $100 or more in 1 year, get a Gold status, which means 15% more minutes and your minutes can be used for a full year (instead of the regular 90 days).
• No overages!

So overall, I am fairly convinced (for now) that the prepaid/Monthly 4G will save me some money but still fulfill my need for mobile communication.

T-Mobile also has Pay-As-You-Go plan (for voice prepaid) and Pay-By-The-Day plan (for use only when needed). Depending on your needs, these plans can potentially be cheaper than the Monthly 4G plan that I am planning to use.

 

 

Microsoft Windows engineer John Lam also has a similar story in his blog.