Home > iPhone, Mobile Communications, Saving money, Telephony > Instead of buying a new iPhone, why not leave the big carriers and try something different?

Instead of buying a new iPhone, why not leave the big carriers and try something different?

September 23, 2012
The ultimate fanboy

The ultimate fanboy. I could not find the credits for this picture. I believe that this gentleman was one of the founders of “The iPhone Blog” back in 2007

The iPhone 5 was launched last week end. But I’m not sure I’m going to buy one. At least not immediately. Apple’s Opus#5 is beautiful, light and fast, but my iPhone 4 does not look ugly, and is light enough and fast enough to my taste. Like millions of iPhone 4 early adopters, I’ve just been freed of my 2 year contractual obligations to ATT. They even unlocked it. So I’m trying to think out of the box.

Why commit to two more years of endured servitude to one of the big carriers? And if I keep my current iPhone, why should I pay the same amount as before, now that ATT has more than fully recovered the cost of the initial subsidy? Why not take advantage of my freedom and try something different. Like MVNOs or VoIP.

MVNOs are Mobile Virtual Network Operators – they don’t own a network of cell towers – they just buy blocks of minutes wholesale from the big carriers (Sprint, ATT and T-Mobile) and package them in pre-paid or pay-as-you-go plans for retail consumers. Some MVNOs (such as Virgin or Boost) are direct emanations of the big carriers (Sprint, in this case), others are targeting specific “niches” or minorities and often belong to foreign carriers with no technical footprint in the US.

For iPhone 4 users, there are not many options when it comes to MVNOs. Very few permit you to bring your own device: the MVNOs using the Sprint network will refuse to configure your CDMA iPhone on their network, and will ask you to buy a new iPhone at full price from their own on-line store instead. The MVNOs using GSM networks are more flexible, but many use the network of T-Mobile, whose 3G frequencies are currently incompatible with the iPhone. In fact, you have to pick a virtual operator using ATT’s network. There are a few of them, but they are not equal: some have an awful reputation (horrendous customer service, zero tolerance for data overage). Red Pocket is one of the good ones, according to the feed back collected on multiple forums.

For an iPhone user, only Red Pocket’s top of line plan makes sense, because it’s the only one which includes a serious data allocation (1 GB). Compared to ATT’s unlimited plans, Red Pocket is relatively cheap – $55.00 / mo for unlimited voice and text and 1GB of data, but it comes with its own set of constraints and limitations: it’s a pre-paid plan (you have to buy refills every 30 days), there is no subsidized phone (you have to bring your own), it does not support Visual Voice Mail (you just have the plain voice mail we all used before June 2007) and it does not offer any form of international roaming.

Another fancy feature, MMS, requires some serious configuration. Lastly, the plan is caped at 1GB/month, with no way to get more. Red Pocket does not have the reputation of being too brutal if you reach the limit your allocation (they don’t cancel your subscription), but a cap is a cap nonetheless. An equivalent post-paid plan with ATT (unlimited voice and text, and 3GB of data) would cost $120.00 / month plus almost $7.00 in various surcharges and fees. That’s a huge difference – assuming you really need unlimited voice and text messages.

ATT screen copy

Do you really need 1400 minutes in your voice plan?

If you are often in places where WiFi connectivity is available, if you and your usual contacts use Apple’s Messages application, you may not need your carrier’s text messages service at all, and with Apple’s FacetimeSkype or Viber you could call your friends using your data allocation and live with a much smaller bucket of voice minutes. An ATT plan with 450 minutes, no text messages and 3GB of data will cost you $70.00 /month plus fees and surcharges, not a big difference after you’ve factored in all the limitations of Red Pocket and its competitors.

Your winning savings strategy could be to stay with your current carrier, but to examine your usage patterns and reduce your monthly voice and text allocation accordingly.

Much more radical is the VoIP or Mobile IP Telephony solution. The migration of telephony from TDM (Time Division Multiplexing) to TCP/IP has been going on in the Enterprise world for more than 15 years, and is in full swing in the residential market. There have been reports of people only using a 3G data subscription and a Voice over IP application on their smartphone, but it’s far from mainstream. On paper, it looks great. You get the flexibility of IP Telephony, for only $30.00 a month (the cost of a 3G data-only SIM card for an iPad, that you will insert in an iPhone). But telephony and VoIP seem to attract fanatics, who are so enamored with the technology that they are not totally objective. I wanted to see by myself how practical mobile VoIP was in September 2012. You will read my conclusions my next blog entry.

– GigaOM
Why are MVNOs so hot right now? Thank the carriers
Is there any reason not to get a prepaid phone [or plan]?

Plazza San Marco, Venice

Plazza San Marco, Venice – Dec. 2011 – One of the few places in the city where public Wifi is available. We used Viber over WiFi to call home.


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