Here in Europe, unlocked pre-paid phones are the standard. When you go on vacation, the first thing you do is drop into a mobile phone shop and pick up a new SIM for whatever country you happen to be in this week.
When I moved back to England from Spain, I walked into a store, paid 5 pounds, and received a SIM with 5 pounds credit on it. The whole operation took upwards of a minute and a half.
It's just so simple, straightforward, and cheap this way. It's amazing that people in the US tolerate it any other way. Especially since you can walk into any T-Mobile or ATT store today and get a prepaid SIM for any unlocked handset.
Different carriers have different policies. I use an O2 UK prepay SIM, and they have a kind of "subscription" you can sign up to, the web "bolt-on": they charge 7.50 GBP against your credit once a month, and you have then have "unlimited" web access for that month. You can cancel at any moment, so there's no obligation; and if you don't have 7.50 credit come billing time, you simply don't get the unlimited web access. In other words, the downside risks are negligible.
Another difference is that SIM credit is generally measured in actual currency, rather than minutes. Different calls then cost different amounts of currency; but if you buy credit in bulk (20 or 40 GBP instead of 10), you usually get a 10 or 20% increase in nominal credit value.
Also, calls received are free if you're not roaming to a different country. Mobile phone numbers have different prefixes to local numbers; they essentially have their own area code. This also means that calling mobile phones is more expensive than calling a landline, especially from a different operator. (There are usually special deals for intra-operator connections.)
I use a Vodafone Ireland SIM when I'm roaming. It has a different approach to the data plan; up to 50MB data per day costs 0.99 EUR. If you don't use any data on a day, it doesn't cost anything. If you try to push it to the limits, in theory it means that you could get 1.5GB/month for 30EUR/month. The Vodafone SIM data charge seems to be the same in all countries I've been in; Vodafone is in almost every European country, but it also works in France (SFR is 44% owned by Vodafone) and the US (on AT&T).
It's weird to see how less prevalent prepaid phones are in the US. Here in Europe, they're everywhere, hell I bought my iPhone on prepay. I wonder what lead to this difference.
I have wondered this before too. I can think of a few reasons why this might be the case:
* US phone operators charging for incoming calls and messages, which make prepay phones much less useful.
* Standardisation on GSM in most of the rest of the world, which reduced control by the networks, created a market for unlocked phones, and increased competition by making it easier to change networks and phones.
* Cultural differences that mean that more people end up on contract phones. For example, teenagers often end up on 'Family Plan' contracts rather than Pay-As-You-Go, at least partially influenced by the above two factors. This helps creates a cycle where people consider contracts 'the norm'.
Charging for incoming calls seemed annoying at first, but it does have the advantage of making you more callable. No problems with cheapskate businesses who insist on having your number but won't accept the one you want to give.
Prepaid is rarely advertised in the US, especially the good prepaid. Companies want you on costly voice, data, etc plans and locked into a 2-year contract.
I have been using a pre-paid phone for the past 10 months. It averages out to ~$20/month for me--very low for the USA! I am on the computer about 12 hours/day for work, research, and of course Hacker News; so I don't need apps. And I don't really need a phone that often. I just use it to schedule appts, catch up with family, friends, etc.
This article is right on. I've been tempted by many smartphones over the years, but I currently pay about $10/month average for my prepaid cellphone, and it works great. Smartphones are cool and all, but I really don't feel like I'm missing enough to outweigh the thousands of dollars I've saved over the last few years.
FWIW, I pay 7.50 GBP per month prepay for the SIM in my Nexus One; that's for O2's web "bolt-on". Since I work from home, most of the time I'm actively using the thing it's on wifi, and while the background downloading it does (email, twitter, etc.) is over the mobile network, it's in no danger of hitting any limits. And it still all works out fine when I'm out and about.
Roaming charges here in Europe are a bit of a joke, however. I have an Irish Vodafone SIM for that purpose, which is 0.99 EUR for up to 50MB, per day. The best thing about that SIM is I've found it's still 0.99 EUR no matter whether I'm in the UK, the US, or anywhere in Europe (I even picked up Vodafone Albania while on a ferry between Greece and Italy).
So in practice, I find pre-pay SIMs combined with an unlocked smartphone works out pretty well.
I too use pre-paid only. I pay less than $7/month w/Virgin mobile.
I do look longingly at smartphones. But it's just not worth it for me with current structure of plans. They're either voice-centric, which i'd never use, or data-centric in ways i don't need.
i'm near a computer w/internet access most of the time.
I love the Internet, and do all the dorky social networking things that make me somebody who should be slurping access from everywhere. I'll gladly drop bank for something that fits me, but i'm basically waiting out the entire old school phone system :D
In the meantime, i have a bad phone. I bet there will be Android phones soon on the big pre-paid systems.
I too was paying peanuts for V-Mo, then I got a girlfriend and had to move to their unlimited-text plan because I started sending over 100 texts a day for the first week or so. Still only $20 a month. If I added $5 more I could get the unlimited data plan too, but their phones aren't interesting enough for that, or weren't as of a few months ago. I see that they're offering a Blackberry now, though. Maybe I'll think about an upgrade when the Android phones start appearing.
MetroPCS in my area is always filled with people, almost like an Apple Store! Unfortunately, they don't yet have anything that approaches a true smartphone. Palm could dump their stock of Pre and Pixi there and really clean up. For the few phones that offer data, the voice/data bundle is just $60 prepaid/month. Hell, I'd go for that, Let me pay for my own damn phone and not be tied to a carrier for two years!
I will gladly pay for a phone outright if the carriers offer a data-centric plan for $50 a month with no commitment.
Until then, I'm hiding out this year with Google Voice and my Virgin Mobile prepaid. So far, it's been awesome and works out exactly for my needs. It sucks that I don't have decent mobile data: but I can wait a little longer until carriers realize they need to offer better and customized services.
I've saved about $400 this year so far by switching to my new setup. With the saved money, I have some new shiny clothes and have been enjoying eating out more!
Have been hunting around for prepaid plans, as Verizon is currently screwing me for all I'm worth (2 people ≈ $90/mo for 700 minutes, texts 20c each way). Problem is, I need roaming, so Virgin is out, and we hit roughly 300 minutes per month.
About the best one I've been able to find thus far has been Net10... anyone use it? Anyone care to chime in? The website is a bit frightening, but I'd be willing to survive that.
Verizon was screwing me even worse. $35/mo for a single phone with 100 minutes; my regular usage was about 50 minutes per month. The month my son was born, the bill came to something like $150 for about 300 minutes used. Net result: over the last year, I paid about $500 for less than a thousand minutes.
I recently switched to Tracfone (affiliated with Net10, and targeted at even lower usage). So far I've been quite pleased with call quality, though I haven't left the neighborhood yet.
T-Mobile prepaid works well in the US. Just get a used T-Mobile Samsung flip phone and then get a prepaid SIM card. You can order the SIM card from T-mobile.com or walk into your local store. Initially, you should put $100 on your phone to enter the 'Gold' plan. Then your minutes and phone number will last for 1 year from the last time you added minutes. Talk time is about $0.10/minute.
I have an old iPhone I was given, and I'm using that on prepaid. Costs me about AU$30 month and for that I get 300MB data + a few hundred text/mms + few hundred minutes + free tethering (we've had iPhone tethering for about a year now)
It's striking how mature mobile phone technology is. You can buy a phone that works really well as a phone for quite reasonable sums of money. I have bought prepaid mobile packages just for the phone.
I use a prepaid phone for an inbound-only number for my business. Just gotta remember to add some credit if I'm still using it in a year's time, so the number doesn't get repossessed.
Dug this Boy Genius Report article up from May 6th:
"The amount of voice minutes used by young adults continues to plummet as email, IM and SMS grows at a rate of 150% during the years 2007 to 2009. Factor in 1800% growth in mobile data in this segment and it’s pretty obvious Virgin is one of the few companies that actually caters to the demands of its customers."
I wish the TC post was less, "this random circumstance happened to me," and more about what you mention above: prepaid is a good fit for MANY people. (And not to mention the growing data > voice divide that is driving some of us to prepaid.)
My experience with prepaid phones is that they're cheaply made (as you'd expect for a phone you can buy for $10). I used prepaid between 2001 and 2008 (and am still on a month-to-month plan), but most of the phones were crap. Volume doesn't go up far enough, or the screen has dead pixels, or the keypad stops working unless you push really hard on the numbers, or it can only hold 20 contact numbers, or the battery lasts only half the day after a few months of use (when it started, I could charge it only once a week, but...).
On the plus side, if I had these problems with my current smartphone, I'd get it fixed, whereas with those, I just threw them away and got a new phone.
What’s prepaid got to do with the phone you use? I bought a nice unlocked Nokia 6300 (now in its third year of production but quite small, built like a tank and even good looking – works great for phone calls and the occasional text message) for 100 Euro and just use my free prepaid SIM with it.
That’s perfect for me. I hardly ever make calls but it’s still nice to have a phone number where others can reach you and since my university has great free WiFi, spending all that money on some 3G plan would be a real waste. I can nearly always just use my iPod touch.
In theory, nothing, but for those concerned about comitting to spending more than $5-10 a month on phone service (that is, the prepaid target market), spending $100-150 for a phone seems unlikely. And, in fact, I bought $10-15 phones repeatedly, about one a year on average, for the ~7 years I used prepaid-only. That was mostly with Virgin Mobile, though, which has no SIM, being a CDMA network.
It's not quite that simple. You've got to consider the price of the phone on and off the contract, the price of the contract, monthly usage, prepaid value, expected life of the phone, etc.
I bought my £100 phone 2 years ago with £10 credit. Still got about £4 remaining on it (clearly I don't make a lot of calls). If I'd bought it on a contract I would be down double or triple what I paid.
I used my last 100 Euro phone (my trusty old Sony Ericcson T630) for more than three years. That’s about 2.5 Euro per month. You get a solid phone that doesn’t look stupid and that seems totally worth it (those phones are also not locked which means you can change prepaid providers at a moments notice).
I've used T-Mobile prepaid for years and converted dozens of people to it. You can use any (compatible) phone you want with it, just insert SIM. The minutes never expire as long as you buy minutes at least once a year, which will cost you as little as $5. I spend around $100 on my phone service per year, total.
Unfortunately AFAIK, you just plain can't get data plans with prepaid, from anyone. So prepaid doesn't work very well with smartphones. Also, T-Mobile coverage leaves a lot to be desired compared to other networks.
T-Mobile is actually really great in this regard (I also use them, now), since once you need a data plan, you can just use their month-to-month plans without a contract. My month-to-month is ~$90, for unlimited voice/text/3G-data.
But my impression remains that if you buy a "prepaid phone", it will probably be very low quality.
When I moved back to England from Spain, I walked into a store, paid 5 pounds, and received a SIM with 5 pounds credit on it. The whole operation took upwards of a minute and a half.
It's just so simple, straightforward, and cheap this way. It's amazing that people in the US tolerate it any other way. Especially since you can walk into any T-Mobile or ATT store today and get a prepaid SIM for any unlocked handset.