Going Prepaid: My Journey to Saving $68 a Month on Cell Phone Service

After over eight years in the Verizon network, I have finally left. It wasn't any action or policy enacted by Verizon that sent me away. My research and usage patterns showed the amount of monthly savings I could realize by switching from postpaid service (the traditional, pay-after-the-month plans) to prepaid service. Here is my firsthand experience of switching from Verizon to T-Mobile...

I had been a Verizon Wireless customer since 2007 when I first got a cell phone (my family became Verizon customers in 2004-05). With my first smartphone, the LG Voyager, I got the unlimited data package and remained grandfathered in when they eliminated unlimited data, then forced you to pay full price for a phone to keep it. I got the Galaxy Nexus in June 2012 and got my first taste of 4G LTE and its lightning-fast speeds. I kept notice of Verizon's rapid LTE network development and watched the map expand to cover most of the country. I was a happy customer with a good phone and great network coverage.

But then I read this article from JR Raphael on his Android Power blog discussing why he went to prepaid service and his observations three months later. When he mentioned the $30 per month plan from T-Mobile, I was intrigued. But, alas, I was under contract until June 2014 as a result of upgrading my phone. So I tucked the information in the back of my mind.

One afternoon in late August, I checked my Verizon account and looked at our usage over the past six months. Astoundingly, I had used 80 minutes or less in all six months and Veronica had used under 300 each month. So we were paying for 700 minutes and using half of them or less. Our data usage was similarly lower than I expected. I topped out at 5.5GB one month while traveling, otherwise, I was at 3-4GB each month. Veronica only used 2-3GB on her phone. I chatted with a representative to see if there was a lower minute plan to save some money. When they told me there was no lower plan, I asked about when my contract ended. To my surprise, our contracts were up. (Somehow in our account transfer/merging process, our contract end date changed to June 2013. I verified with a representative on the phone that this was correct).

With the news that we were out of contract and free to change companies, I began researching our best options. I had long been in love with the Nexus 4 by Google. The slow update process on Verizon often frustrated me with my Galaxy Nexus (having to wait 1-3 months after release to get the updates I was supposed to receive almost instantly). So the idea of being tied directly to Google was appealing. Plus the phone quality with the all glass design is pretty stellar. My mind was made up and I quickly convinced Veronica of the same.

We compared prepaid plan companies (there are dozens of them) but ultimately found that T-Mobile offered the best plans for us as their $30 per month plan for 100 minutes, unlimited text, and 5GB of high-speed data (then unlimited data at dial-up speeds) was unmatched. We got Veronica hooked up on the $60 a month plan for unlimited minutes and text with 2.5GB of high-speed data.

The activation process for Veronica was simple. We ordered our Nexus 4 phones, received them, took them to the store and got her setup within 10-15 minutes. My experience was not so easy. Turns out the $30/month plan is a Walmart/online exclusive. Through many phone calls and store visits, I finally got the answers I needed. I had to go to Walmart, buy a $30 prepaid card (which I could use for my plan cost), and call a special number to get signed up on the exclusive plan. Once I did that, we were good to go! Lesson learned: just buy the SIM card from T-Mobile's website and sign up for the plan online. I was impatient and it cost me many hours of frustration.

So what's the point of all this? Why did I leave Verizon's 4G LTE network and unlimited data behind? Simply: monthly cost savings. Here's a graph of what we're looking at:

I wasn't really using the power of Verizon's network, one of the main advantages of their service. We pretty much always stay in the OKC metro area and when we did travel, it was to cities or along interstates that are well covered by every network. Also, it turns out that HSPA+ (which is called 4G by many companies, causing confusion) isn't that much slower than LTE (my local comparisons show LTE around 10-15 mbps and HSPA+ around 7-9 mbps, a small difference and still faster than our DSL speeds at home). And my data usage was typically under the 5GB threshold due to the prevalence of Wi-Fi at home and work so unlimited data wasn't really a necessity anymore.

All in all, three weeks after changing our wireless provider, we're satisfied. Next month we'll see our cost savings on our monthly budget and enjoy that extra $68 a month of wiggle room. On top of that, we improved our phones and enjoy the benefits of a quad-core processor every day. We can choose when we want to upgrade and unlocked phones seem to carry a higher resale value for selling our old phones. Prepaid was the right move for us, is it for you?

Questions or comments? Let me know below!