Talk, as they say, is cheap -- and getting cheaper, on the mobile phone at least. But downloading and surfing the Web on smartphones is growing more expensive, though the carriers try to disguise it. Verizon Wireless and soon AT&T are pushing consumers toward shared data plans that provide unlimited voice and text messages but cap data usage. That, of course, is exactly the opposite of what most people want.
Given that the major carriers offer plans and services that ultimately are not so different, it's noteworthy that two minor-leaguers -- Cricket (the public brand for Leap Wireless) and Virgin Mobile (a Sprint subsidiary) -- are now offering prepaid plans that let you buy and use an iPhone without a two-year contract or odious early-termination fees. Competition is finally, if belatedly, coming to the mobile data market.
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Are there gotchas? You betcha. Both Cricket and Virgin charge much more for the iPhone 4S than AT&T, Sprint, or Verizon. Neither offers as much coverage as the majors, and in the case of Cricket there are serious questions about the quality of its service. Nonetheless, for some users the new plans are worth considering. But you have to look hard at the fine print and make some decisions about how you plan to use your iPhone. One hint: If you work in IT, you already think about TCO (total cost of ownership) when it comes to technology at work. Start thinking that way about your personal technology, too.
The gotchas: High upfront costs and limited "unlimited" plans
The biggest gotcha, and this has been widely reported, is the upfront price of the hardware. Cricket charges a stunning $499 for a 16GB iPhone 4S and $399 for the 8GB iPhone 4. Virgin Mobile outpaces Cricket, selling the iPhone 4S for $650 and the iPhone 4 for $550. That compares to $199 for the 16GB iPhone 4S from AT&T, Sprint, or Verizon and $99 for the 8GB iPhone 4.
The difference is the subsidy: AT&T and Verizon charge you less than the cost of the phone and make up that subsidy via higher service fees. Virgin and Cricket do the opposite, essentially billing you what Apple bills them, plus maybe a markup. Note that the prices of iPhones from Cricket and Virgin are still less -- by about $150 -- than what Apple charges for its unlocked iPhones, which can be used by any GSM carrier (apart from Cricket or Virgin, so you can't bring your unlocked iPhone to them).
Cricket offers what it calls unlimited voice and data for $55 a month. But that's misleading. Under the company's "fair use" policy, it will throttle your download speeds once you've used 2.3GB of data, so in effect it is a 2.3GB data plan. The Virgin Mobile service is a bit cheaper and offers a bit more data: $50 a month for 2.5GB of data before your "unlimited" connection slows down. By comparison, AT&T charges $110 a month for 3GB of data, unlimited voice minutes, and 1,000 texts. Verizon and Sprint have similar fees.
Possible gotchas: Quality of service and coverage
Quality of service and coverage are issues with both carriers. I've never used Cricket, but I did spend some time looking up consumer reviews of the company's service -- and they are not pretty. There are lots of complains about poor customer service, with people saying they have trouble reaching a live person and the people who handled their calls were not helpful, even rude. There are also a lot of complaints about dropped calls. (I contacted the company's PR office and never heard back.)