How to Save With a Cheaper Cell Phone Plan – Types of Service, Major Carriers & Alternatives

Americans love their cell phones – if we didn’t, we wouldn’t be willing to pay so much for them. According to the Bureau of Labor Statistics, the average American household pays $937 every year, or $78 per month, for cell phone service. That’s hardly surprising, when you consider that monthly plans from the four largest carriers – AT&T, Sprint, T-Mobile, and Verizon – start at $50 and range well into the hundreds.
While these four companies hold the lion’s share of the market for cell phone service, they’re not the only source. For consumers willing to look beyond the big four, there are plenty of ways to stay connected at a more reasonable rate – and you don’t have to give up decent coverage to do it.

Types of Service

When you switch on your cell phone, the first thing you may notice is whether you have a connection. Cell phone providers have many different ways of hooking you up to phone and Internet service, and some tend to be cheaper than others.
  • Wi-Fi. When you connect by Wi-Fi, you’re basically tapping into someone else’s Internet connection. This is essentially the same thing you do when you use a password to hook up your tablet to your home wireless network, or when you log into your laptop at a local bar or coffee shop. Public Wi-Fi “hotspots,” by contrast, are open to all, with no password needed – your phone can connect automatically to these as soon as you enter their range. Nowadays, there are so many hotspots around that it’s a valid option to have phone service through Wi-Fi only, hopping from hotspot to hotspot as you travel through a city and never actually connecting to a cell network.
  • 2G. As PC Magazine explains, 2G, which stands for “second generation,” is the digital cell phone service that replaced the oldest analog systems. These days, cell phone providers don’t offer connections through 2G, which is much slower than newer 3G and 4G networks. However, you may still find yourself using 2G if you have a plan that promises “unlimited data.” In reality, many of these plans give you a limited amount of data on a high-speed network, after which you’re dropped down to a 2G connection for the rest of the month.
  • 3G. Third-generation wireless, or 3G, is the earliest generation of “mobile broadband.” As PC Magazine notes, speeds over 3G networks vary widely, from 400 kbps to more than 10 times as much. The majority of wireless providers have now moved on to 4G, but some budget providers still use the 3G network. In addition, many providers that offer 4G service for most web browsing note in the fine print that video streaming is limited to 3G speeds.
  • 4G. According to PC Magazine, 4G coverage isn’t necessarily faster than 3G. There are actually many different technologies that fall under the heading of 4G, and many ways to use those technologies, so the term is not very meaningful. However, there’s a big difference between 4G and 4G LTE – the gold standard when it comes to speed, particularly for uploads. There’s a lot of variation in speed among different 4G LTE networks, but all of them are faster than 3G.

Major Carrier Costs

According to a 2014 report by the Federal Communications Commission (FCC), roughly 69% of the nation’s cell phone users subscribe to either Verizon or AT&T. Add in T-Mobile and Sprint, and the figure rises to more than 97%. That’s bad news for consumers, because plans from these four carriers come with a hefty price tag.
  • Verizon. Individual monthly cell phone plans from Verizon start at $60 per month, or $45 per month for “Verizon Edge” when you buy a new smartphone. This gives you unlimited talk and text over Verizon’s top-rated 4G LTE network, plus 1GB of data (every 500MB over that limit costs an extra $15). A gigabyte may sound like a lot, but according to Verizon’s own data usage calculator, you’d exceed that limit streaming video for just 10 minutes per day. Raise the data limit to 2GB and you pay $75 per month (or $60 with Verizon Edge) and $15 for each 1GB over the limit.
  • AT&T. Pricing plans from AT&T is a bit of a challenge, as they vary from location to location. In central New Jersey, where I live, the only type of monthly plan available appears to be a “mobile share plan,” which starts at $20 for unlimited talk and text plus 300MB of data that can be shared among multiple devices – all over 4G LTE. On top of that $20, you pay a fee for each device on the plan: $10 for a tablet, $15 for a basic phone, and $40 for a smartphone. The cost mounts steeply as the data limit increases, from $25 per month for 1GB all the way up to $375 per month for 50GB.
  • Sprint. Sprint offers a simpler menu of options than its competitors. Its individual plan costs $60 per month for unlimited talk, text, and data – although the site doesn’t actually promise 4G LTE speeds. Its family plan costs $100 per month for unlimited talk and text, plus 20GB of data that can be shared by up to five lines. However, the fine print on the site warns that this price is only good until September 2016, after which the family plan cost will jump by $15 per line.
  • T-Mobile. If you want truly unlimited usage, T-Mobile is pricier than Sprint: $80 per month for unlimited talk, text, and data over 4G LTE. However, if you can accept some limits on your data use, the price drops: $70 for 5GB, $60 for 3GB, and just $50 for 1GB. Family plans start at $80 per month for two lines with 1GB of data each.
teenager boy using his phone

Cheaper Alternatives

Clearly, a monthly plan from one of the four major providers is no bargain. Fortunately, there are several ways to reduce your cell phone bill. Prepaid plans generally cost less than monthly plans, especially if your usage is low. In addition, there are several budget providers – some of which are actually subsidiaries of the big four – that offer cheaper coverage.

Prepaid Plans From Major Carriers

If you’re with one of the four major carriers, one way to reduce your coverage is to switch to a prepaid plan. These generally cost less per month, even for the same level of usage. And, if you don’t need as much data as you’re paying for with your current monthly plan, you can save even more.
  • AT&T. With AT&T, the cheapest prepaid plan costs $30 per month for unlimited talk and text, but no data (except via Wi-Fi). For $45 per month, you can tack on 1.5GB of data at 4G speed (or 3G for “basic and messaging phones”), and for $60 you can raise the limit to 4GB.
  • Sprint. Sprint Prepaid is a bit more generous with data, allowing 1GB for $35 per month, 3GB for $45, and 6GB for $55 – all with unlimited talk and text. The catch is, you must buy a Sprint Prepaid phone to take advantage of these rates. Prepaid service runs on 4G LTE, assuming your phone can support it, but wireless streaming is only at 3G speed.
  • T-Mobile. T-Mobile’s Simply Prepaid service, priced by the month, costs more than Sprint’s. It starts at $40 per month for unlimited talk and text, plus 1GB of 4G LTE data. You can bump the data limit up to 3GB for $50 per month or 5GB for $60. However, for light users, T-Mobile’s Pay As You Go plans are a real bargain. For a mere $3 per month, you get either 30 minutes of talk time or 30 text messages, or any combination of the two, over 4G LTE. Additional minutes and texts cost $0.10 each. If you also want data, you can tack on a “data pass,” which costs $5 for one day and up to 500MB or $10 for one week and up to 1GB.
  • Verizon. If you’re with Verizon, unfortunately, switching to prepaid won’t save you a cent. Its usage levels are $45 for 1GB of data and $60 for 2.5GB, plus unlimited talk and texting, over 4G LTE. However, you must buy a new phone to get the service, so you end up paying no less than you would with Verizon Edge.

Sub-brands From Major Carriers

The four major carriers have a little secret. As Money Talks News reports, they all have budget-priced sub-brands that use their networks, but don’t carry their names. By switching to one of these lower-cost brands, you can keep your existing phone and continue using the same network while sharply cutting your monthly bill.
  • Cricket. As the low-cost arm of AT&T, Cricket offers a choice of four no-contract plans. The most basic plan offers unlimited talk and text, but no data, for $25 per month. The other three tiers offer a limited amount of high-speed data over 4G LTE: 2.5GB for the $40 Basic plan, 5GB for the $50 Smart plan, and 10GB for the $60 Pro plan. Choosing automatic payment for any of these three plans cuts their costs by $5 per month.
  • Boost. Boost runs on Sprint’s 4G LTE network, but with the caveat that “video streaming may be limited to our 3G speeds.” All of its plans offer unlimited talk, text, and data, but only a fixed amount of that data is at high speed – after you exceed your monthly limit, the speed drops to a more moderate 2G level. You can get 1GB of high-speed data for $35 per month, 2GB for $40, 5GB for $45, and 10GB for $55 – though this last plan isn’t available for basic phones. Boost also offers service by the day: $2 per day for unlimited usage on a basic phone, $3 on a smartphone.
  • Virgin Mobile. Also operating on Sprint’s network, Virgin Mobile offers much the same deal as Boost: no-contract plans and 4G LTE speeds, but only 3G for streaming video. Its Unlimited plans start at $20 per month for 300 minutes of talk with unlimited texting, but no data except what’s available over Wi-Fi. Talk and data limits increase at each tier, maxing out at 3GB of high-speed data for $55 per month. For lower usage, Virgin offers three tiers of “PayLo” plans, ranging from $20 to $40 per month, with limited amounts of talk, text, and data.
  • GoSmart Mobile. GoSmart Mobile runs off T-Mobile’s 3G network, but with a twist: It offers 4G LTE speeds for Facebook use only. Plans start at $25 per month for unlimited talk, text, and Facebook, but offer no other web access. Other tiers offer unlimited talk, text, and web access, but with only a limited amount of data at 3G speed – once you hit your limit, you’re dropped to 2G speed. You get 2.5GB for $35 per month, 5GB for $40, and 10GB for $45.
  • MetroPCS. All plans from MetroPCS are contract-free and offer unlimited talk, text, and data over T-Mobile’s 4G LTE network. However, like other providers, MetroPCS gives you only a limited amount of data at its top speed. The $30 monthly plan gives you 1GB at “up to 4G speeds,” the $40 plan offers 2GB at “up to 4G LTE,” the $50 plan bumps the limit up to 4GB, and for $60 per month, you can use all the high-speed data you want.
  • Total Wireless. The Total Wireless website touts its use of “America’s largest most reliable network,” but for some reason doesn’t say that this network is Verizon 3G. What it does say is that it offers a variety of plans for either one or multiple users, all with unlimited talk and text. Individual users can get talk and text only for $25 per month, or talk and text plus 2.5GB of data for $35 per month. Families can share 5GB of data over two phones for $60 per month, 9GB over three phones for $85, and 12GB over four phones for $110.
woman using a smartphone

Mobile Virtual Network Operators (MVNOs)

Mobile virtual network operators, or MVNOs, create their “virtual networks” by buying and reselling minutes and megabytes from the four major carriers. Their plans offer increased flexibility and, in many cases, lower costs. The downside is that you don’t get the reliable customer service you can expect from leading providers.
Both PC Magazine and Digital Trends offer their takes on which MVNOs are the best:
  • Consumer Cellular. Consumer Cellular markets its services chiefly to senior citizens, with easy-to-use phones, special benefits for AARP members, and plans focused more on talk and less on data use. All the same, it earns rave reviews from the tech-savvy readers of PC Magazine, particularly for its good customer service. Consumer Cellular sells talk plans and “Connect Plans,” for data and texting, separately. Its most basic talk plan costs $10 monthly plus $0.25 for each minute of talk time. Higher-tier plans include more free minutes, up to $50 for unlimited talk. Connect Plans start at $2.50 per month for 300 texts and 30MB of data and go up to $40 per month for unlimited texts and 4GB of data.
  • Straight TalkStraight Talk is a subsidiary of TracPhone, described in PC Magazine as a “super-MVNO” with more than 25 million subscribers under various brand names. It offers an assortment of no-contract plans that include unlimited texting and a fixed amount of data at 3G speeds. As soon as you hit your data limit, your speed comes crashing down to 64 kbps. For $30 per month, you get 1,500 minutes of talk and 100MB of data. For $45, you can bump that up to unlimited talk and 3GB, or 5GB if you bring your own phone. (The extra 2GB are from a “special offer” that doesn’t apply to the lower-cost plan.) You can cut this price a bit by paying up front for several months at a time: $130 for three months, $255 for six months, or $500 for a year.
  • Page Plus. Another TracPhone brand, Page Plus is one of the few MVNOs that runs over Verizon’s top-rated network. Its most bare-bones monthly plan, for $12, includes 250 minutes, 250 texts, and 10MB of data at 3G speed. Higher-tier plans, ranging from $30 to $70 per month, include 4G LTE speed, along with higher usage limits. Page Plus also offers pay-as-you-go plans, starting at $10 for 120 days of use, with 100 free minutes and $0.10 for each additional minute; you can also text for $0.05 per message and use data at $0.10 per MB. At each tier of pay-as-you-go service, the number of minutes increases and the price for each additional minute drops. So, for $80 you can get 2,000 minutes good for an entire year and pay only $0.04 for additional minutes – though prices for texts and data are unchanged.
  • Republic Wireless. With Republic Wireless, you get most of your data over Wi-Fi, switching over to Sprint’s LTE network only as needed. This allows Republic to offer service at much lower rates than other providers. Its cheapest plan is $5 per month for unlimited talk, text, and data, but only over Wi-Fi – if there’s no hotspot in range, you’re out of luck. For $10 per month, you can use the cell network for talking and texting only; for $25, you get 5GB of data at 3G speed; and for $40, your speed jumps to 4G levels. One catch is that you can’t bring your own device, although Republic offers a choice of two Motorola smartphones that Digital Trends describes as surprisingly functional.
  • Scratch Wireless. Scratch Wireless takes Republic’s Wi-Fi-plus model to a new level. As long as you’re near a Wi-Fi hotspot, your service is free – which, according to the provider, means that most users will pay nothing 84% of the time. If there’s no hotspot to connect to, you must pay for a “pass” to use a network for either calls or data. For calls, the cost ranges from $2 daily to $30 for 30 days with unlimited use. For data, it ranges from $2 for 24 hours and 50MB to $25 for 30 days and 1GB. Texting is always free, whether you’re in Wi-Fi range or not.
  • FreedomPop. FreedomPop is the only MVNO we’ve seen with a plan that’s 100% free. Its basic plan gives you 200 minutes, 500 messages, and 500MB of data – most of the time this is over Wi-Fi, but if you wander out of range you remain covered by 4G LTE without paying a penny more. If you want more usage, you can pay just $80 per year for unlimited talk and text plus 500MB of data per month, or choose the Unlimited Everything plan for $20 per month. Data use is unlimited on this plan, but your speed drops to 3G level after the first gigabyte.
  • H2O Wireless. Both PC Magazine and Digital Trends recommend H2O Wireless as the best choice for international travelers. All of its monthly plans offer unlimited calling and texting to more than 50 countries, plus a limited amount of international talk time for countries not on the list. Plans range from $30 per month, which gives you $10 worth of international talk and 500MB of data, to $65 per month for $20 worth of international talk and unlimited data – though only the first 3.5GB is at 4G LTE speed. You can also choose pay-as-you-go service, paying $10 for each block of 200 minutes or texts and 100MB of data. One caveat: You can’t bring your own phone to this plan, though it offers a good selection of popular models.
  • Giv Mobile. Giv Mobile has a special perk: It gives a portion of your monthly bill to charity. Its monthly plans start at $20 for unlimited talk and text, plus 250MB of data at 3G or 4G speed. From there, plans go up to $60 per month for unlimited talk, text, and data, with the first 4GB of data at 4G LTE. Whichever plan you choose, 8% of your payment goes to a charity that you can choose from a list of more than 30.
  • Ting. Unlike other MVNOs, Ting doesn’t offer any “plans,” per se – instead, you pay for what you use. Starting with a base rate of $6 per device, you can add as many devices to your account as you like. Then, you tack on the three M’s – minutes, messages, and megabytes – as separate charges each month. There are several tiers of usage for each of the three Ms, and Ting bills you for whatever level of usage you hit in a given month across all your devices. For instance, you could pay $6 for one phone and add on one hour of call time for $3, send 500 messages for $5, and use 500MB of data for $12, for a total of $26. According to the site, the average Ting user pays $23 per month.

How to Decide

With so many providers and plans to choose from, there’s obviously no single one that can be identified as the best. Instead, you have to figure out which one works best for you, based on how you use your cell phone.
Factors to consider include the following:
  • Coverage. It’s essential to have a network that keeps you covered in the areas where you spend the most time. Verizon’s network is the strongest overall, but it’s not worth paying more for it if your home territory is covered just as well by another carrier’s. Check out coverage maps, and also ask your neighbors how good their reception is with the providers they use. If you spend most of your time in densely populated areas that fall under the umbrella of Wi-Fi, it’s possible you can get by only with Wi-Fi and you don’t need to worry about network data coverage.
  • Speed. The network you use doesn’t just determine your area of coverage; it also affects your upload and download speeds. 4G LTE speeds matter most with uploads, so if you spend a lot of time uploading, access to a 4G LTE network should be a priority for you. On the other hand, if you use your phone mostly for talking and texting, it’s likely you can get by with 3G or even slower speeds.
  • Usage. If your phone is truly for emergencies only, then you can get by with a bare-bones plan that offers a limited number of minutes and little or no data use. If you do a lot of calling and texting but little web surfing, you should opt for a plan with unlimited talk and text but not worry too much about data limits. By contrast, if you spend a lot of time listening to music or watching video on your phone, the best plan is the one that gives you the most data at the best price. Verizon’s data usage calculator can help you figure out how much data you need in your plan.
  • International Use. If you often make calls to friends abroad, you need a plan that includes international calling. If you frequently spend time abroad yourself, it’s important to choose a provider that can keep you connected while you’re out of the country. According to CNET, this probably means one that runs on T-Mobile’s or AT&T’s network, since both use Global System for Mobile (GSM), the technology that’s prevalent in most parts of the world. Verizon and Sprint use Code Division Multiple Access (CDMA), which is strong in North America but rare elsewhere.
  • Phone Choices. If you have your heart set on a particular cell phone, or if you’re strongly attached to the phone you have now, then you need a carrier that supports that phone. However, if you’re willing to switch phones to get the lowest monthly rate, that opens up a wider range of low-cost options, such as Republic Wireless.
  • Customer Service. According to CNET, there’s “no way to predict this,” since every provider has both satisfied and unsatisfied customers. However, other sources tell a different story. In a survey of more than 2,500 cell phone users, JD Power reports that customers of AT&T and Virgin Mobile are happiest with the care they receive. A larger survey of Consumer Reports subscribers identifies Consumer Cellular as a standout for customer support.
man outdoors talking on his smart phone

Final Word

Since every cell phone user is unique, only you can decide which provider is best for your needs. However, there are a few clear standouts. For instance, if you carry a phone for emergencies and hardly ever use it, FreedomPop can give you all the service you need for free. If you use your phone regularly, but you also spend nearly all of your time within range of a Wi-Fi hotspot, then Scratch Wireless is likely to give you the best value.
If you need unlimited data, but you don’t care that much about speed, then FreedomPop’s Unlimited Everything plan is hard to beat. If you’re a hardcore user who does a lot of music and video streaming, though, then it’s probably worth shelling out $60 per month for an unlimited plan from Sprint or MetroPCS. There’s something for everyone – decide what kind of service you need and go with the best option for you.
How much does your mobile plan cost you?