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Breaking the chains. Dumping my cell phone contract.

17 May, 2008 (11:35) | rant

First, let me say that this will not work for everyone and those teenagers that have their parents footing the mobile bill, unfortunately, will not feel the financial pain of owning a cell phone. At least, not yet. However, many people are in the same boat as myself carrying a work cell and a personal cell since I bought one on my own along with a second for my wife. The phone I was issued is a very capable Blackberry 8830 with a link to the company Exchange server for e-mails and an unlimited data plan (Google Maps is so damn handy!), so I don’t use my personal phone all that much. I do conduct personal business with contacts I keep separate from work and a personal cell is perfect for that.

Therefore, while I was going over my monthly budget spreadsheet about a while back I took a cold, hard look at just how much we actually use our phones and if this 700-minute-per-month plan with Verizon for my Treo 700p and the wife’s RAZR was really worth it. In a nutshell, no.

Unfortunately, Verizon only keeps a few prior months bills (probably to prevent what I’m doing here), but this is how our usage and costs broke down:

Spreadsheet of my cell phone usage.

Since we were paying around $1,100 a year and never really approaching our minutes limit it was clear that we stood ready to save around $400 a year by switching to a prepaid plan the first year (because of the cost of buying new phones) and then save about $700 per year over the basic contract if we kept the same phones! That’s a nice chunk of change AND we didn’t have a major minutes and data plan – ours was simply a shared minutes plan for our two phones. What a rip-off!

So, my next step was to mark my calendar so I would know when my 2-year contract with Verizon ended and I would be free from their shackles to pursue my own cell phone destiny.

The main benefit of having a prepaid plan for me, outside of the substantial savings, was the fact that I was no longer tethered to a service provider for fixed period of time. Another consideration was that I wanted to own a GSM phone for our planned travel to Europe later this year and (eventually) Japan. Owning a GSM phone makes it easy to buy and swap out the SIM card in the country you are visiting and be able to make calls on your phone, rather than rent or buy another one. The last reason I had was that I am becoming very interested in the Android phones that are being developed and once they hit the market I am likely to look hard at buying one. Or, if the iPhone 2 is better than the first overpriced, touch-screen phone I may buy one of those. Maybe. I like physical keys for texting messages, e-mail and search queries – something the iPhone lacks.

Since AT&T and T-Mobile are currently the only two nationwide GSM carriers in the US I did a little research and learned that AT&T just does not have a good reputation and their service is pretty spotty. The other GSM carrier, T-Mobile, also suffers from a less-than-amazing coverage network when compared to what Verizon has deployed, however they have a much better reputation than AT&T; and every other carrier it turns out. So, I’m going to give my money to the underdog (T-Mobile)!

The switch was easy.

  • Cancel my contract with Verizon (with a smile on my face).
  • Order one RIZR for me and a RAZR for the wife (since she has the nice Vaja case for her other RAZR and is familiar with the menus) via eBay.
  • Walk into any T-Mobile store and buy SIM cards and minutes for the phones.
  • Activate and use the phones like normal.
  • Done.

On a related side note, I was talking to some friends over dinner recently about their cell phones and they were lamenting about how they paid over $350 PER MONTH (!!!) for the 5 cell phones in their Verizon family plan. Holy shit! I like gadgets more than most people, but there is a limit and if I was looking at an annual bill of about $4,200 for the convenience of a cell phone….. Well, you can imagine the rest.

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