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How to Save a Bundle on Smartphone Service

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Phones Breaking Chains

Is your cellular service contract about to expire? Don’t sign a new wireless contract just yet. Rather than automatically going with one of the big four cellular carriers—AT&T, Sprint, T-Mobile, or Verizon Wireless—consider one of the smaller guys instead.

Prepaid mobile phone carriers offer wireless service that can save you hundreds of dollars over the life of a standard two-year cellular plan. Since prepaid plans don’t have contracts, you can walk away without paying an early-termination fee—up to $350 for Verizon Wireless customers and $325 at AT&T.

Prepaid carriers such as Boost Mobile, Cricket, MetroPCS, and Straight Talk have been around for years, but their popularity is growing among U.S. consumers. Sales of smartphones at prepaid carriers rose 23 percent in the third quarter of 2012 over the prior quarter, according to the NPD Group, a consumer research firm. Meanwhile, smartphone sales fell 12 percent at the top-tier carriers during that period.

Why the change? One reason is prepaid carriers today have a much better selection of smartphones, including such favorites as the Apple iPhone and Samsung Galaxy S III. While you’ll pay full price for smartphones from prepaid carriers—not the subsidized price that comes with a two-year contract—you’ll also save big on your monthly bill.

MetroPCS, for instance, charges $500 for a Galaxy S III, but AT&T charges $200 for the same phone with a two-year plan. Yes, Metro charges $300 more up-front, but it also saves you big bucks on the back end.

Example: a $50-per-month smartphone plan from MetroPCS includes unlimited nationwide calling, text messaging, and data, the first 2.5 GB of which are at 4G LTE speeds. By comparison, AT&T customers pay $90 a month for 450 phone minutes, unlimited texting, and 3 GB of data. (AT&T charges $10 per additional 1 GB beyond 3 GB.)

Add it all up, and the MetroPCS customer pays $40 less per month for a comparable plan. Over two years—the life of a standard AT&T contract—that’s a savings of $960. Subtract the extra $300 that MetroPCS charges for the Galaxy S III, and you’re still $660 ahead.

Coverage areas do vary, so it’s always a good idea to check a carrier’s website to see if it’s available where you live. MetroPCS says its wireless service covers 90 percent of Americans.

Even Bigger Savings

If you’re not picky about the type of smartphone you use, Republic Wireless has a deal that can’t be beat: $19 per month for unlimited talk, text, and data—with a catch or two. First, Republic uses a technology it calls “hybrid calling,” which means it uses both Wi-Fi and cellular connections to make calls, send texts, or download files. Its first choice is Wi-Fi—whether at home, work, or sipping a latte at Starbucks. If your Republic Wireless phone can’t find an available Wi-Fi link, it uses Sprint’s 3G network instead. The second catch: Republic offers its customers just one smartphone, the Motorola Defy XT, a middling Android handset that costs $259, so Republic isn’t the best choice for users who crave the latest, greatest handsets. But for bargain hunters, $19 a month is hard to beat.

Ting is another prepaid carrier with an innovative idea: Rather than choosing an all-you-can-eat plan, or buying more minutes and data than you need, why not build a plan based on your actual usage? Say you use a smartphone infrequently, a few calls, a few texts, and the occasional Web search. Ting’s a la carte menu might be the ticket: 100 phone minutes cost $3; 1,000 text messages is $5; and 500 MB of data is $13. Add a $6 “device fee,” and your total monthly bill comes to $27 (plus regulatory fees and other surcharges). And Ting uses Sprint’s wireless network.

Virgin Mobile, another Sprint-based carrier, also has a variety of affordable prepaid options, including a $35 per month plan with 300 phone minutes, and unlimited text and data. And don’t overlook prepaid plans from larger carriers. T-Mobile, which plans to merge with MetroPCS, offers a $30-per-month, no-contract plan with 100 talk minutes and unlimited text and data.

So go prepaid and save big.

For a chart of prepaid phone suppliers and plan details, go to saturdayeveningpost.com/smartphone-plans.

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