Do the math

[swerver32]

Well I pulled the plug on my nexus 5 plan. I'm realizing the hidden trick with prepaid, - you have the option to buy a newer phone whenever you like. This can be a blessing, or a curse. Since what you end up with on prepaid are generally mid-range phones, the urge to upgrade is stronger than I think it would be with a top of the line phone on a top carrier. So, that can lead to more money spent on phones, which ends up wiping out a good chunk of what you are saving monthly for service. I came to realize this after ordering a couple nexus 5's, to the tune of nearly $900. A few days later, I cancelled the order.

Here's my personal example. When I started on VM, I was paying $25/month and my first phone was $200, which I kept for a year. That put me at $41.66/month total cost. Fast forward a year and a half, I'm paying $35/month and $45/month (wife) plus $600 on 2 evo v's. I'm still using mine, wife's flaked out and got her a galaxy victory this summer for a little under $200. So over the course of that 18 months, I spent only $80/month for 2 lines, but $800 on phones, for a total of $124.44/month for 2 lines or $62.22/month/line.

Contrast this with right now, I can sign up for 2 lines on verizon, 2 GB data per line, at $75/month per line. Now here you have to factor in the upfront cost, but it tends to be quite a bit less, esp. considering the quality of the phone you are getting, and by contract it is required to be spread out over 2 years, so it's not as big of a change to the total monthly cost as you would see in prepaid with higher device costs. Say I spent $200 per device, which would get you just about any of the top of the line phones. That bumps the verizon 2 line plan from $75/month/line to $83.33/month/line. I'm pretty sure that 3 years ago, a 2 line verizon plan would have been more like $180 plus upfront costs, for a total of $196.66/month or $98.33/month/line. So my difference between prepaid and postpaid has shrunk considerably in the last 3 years.

The change is due to 3 factors - VM plan went up, VZ plan went down, and I'm spending more on phones than originally planned. Add in a couple other factors - corporate discount is available for VZ but not VM, and group discount is available for VZ and not VM, and I now find that I can get VZ for $116/month/line, plus devices comes out to $66.33/month/line.

2011 VM - $41.66/month/line
2011 VZ - $98.33/month/line
2014 VM - $62.22/month/line
2014 VZ - $83.33/month/line (2 line group plan)
2014 VZ - $66.33/month/line (4 line group plan w/corporate discount)

So I know I've added a lot of variables to this that won't apply to everyone, but in my case, the VM discount has all but vanished, from $57/month/line in 2011 to $4 today. Factor in the massive difference in network quality between VZ and VM and it's suddenly a no-brainer. Thus, my new plan is to get on a 4 line group VZ plan.

Even if you take away the corporate discount (20% on data plan) and the 4 line group discount, the difference is only $21/month if you can pair up with someone else. Maybe not as compelling, but I think a lot of people are spending even more on devices on VM than I am, so the numbers will be closer in that case.

So beware prepayers - keep a lid on your device costs, or you won't be saving as much as you think. Do the math.

Other factors - yes you can potentially sell the phone when done, but you can do that with either service so I'm leaving that out.

Yes I still would prefer to be off-contract, but when you compare the costs, you do get something for that 2 year commitment. Freedom ain't free, as they say.

Would be interested to see the math as it works out for others, and if it's prompted you to switch one way or the other.

 

[starkraving]

You also have to factor in regulated and deregulated charges, taxes and so on. One line with VZW will set you back around a hundred bucks. Plus you still have to pay for your phone granted its a subsidized price but you're still paying.

 

[ErinGoBragh]

This really does depend on how often you upgrade your phone, what phone you have and which plan you choose.

Here's my math:

Virgin Mobile:
I average about $150/year in phone costs (new phone price - what the old phone sold for on ebay)
Phone Cost 150/12 = $12.50/month
Plan Cost = $35/month
Total: $47.50/month

Verizon:
Smart phone line: $40/month
2GB data: $60/month
Edge Payment (lowest found): ~$17/month
OR
2 year contract: Free*
*cost of soul? priceless? ...let's use the edge program to keep the math simple
Total: $117/month

so in my case:
VM - $47.50/month
VZ - $117/month

Annual difference: $834
Now is better coverage worth that? When you're a broke grad student: No

Really is case by case what is better.

 

[swerver32]

The edge plan (att and t-mo have similar options) is basically giving you more freedom to upgrade, but at an additional cost per month. It's a hedge between the total freedom of prepaid and the no freedom of 2 year contracts. I find those plans are only for the high end users that not only want the best phone, but want the best phone every year. So personally I'm not considering them, too expensive.

Also, as you've pointed out, on a single line there is still a big difference. You need to go multiple lines for it to pan out in my example, which won't work for some.
1 line VZ = 100/month (2 GB data)
2 lines = 75/month/line
4 lines = 62.50/month/line

Also you did not include selling your VZ phone in the comparison, but did include it for VM.

I guess I'm lucky in the sense that when I was in college (late 90's), cell phones were rare. I'm sure I could not have afforded ANY cell service at that time so I know what you mean! Of course at that time, more than 2 bucks for lunch was out of reach and the only beer I drank was usually the cheapest. :smokingsomb:

 

[kate]

Also you did not include selling your VZ phone in the comparison, but did include it for VM.

ErinGoBragh used Verizon Edge for the Verizon example - with Edge you can't sell your old phone. They make you return it to them so you are basically renting the phone from Verizon.

 

[jhawkkw]

I left Verizon and here's the math that convinced me:
2 Verizon lines with unlimited data: $170.19/month + 2 flagship subsidized every two years = 507.60 for device cost +upgrade fee plus sales tax. That equates to 21.15 a month bringing total cost to 191.34 a month. Multiply that by 24 over the life of a 2 year contract and you get $4,592.16

2 $30 dollar prepaid plans is $64.80 a month after sales tax. Getting 2 newest Nexus device each year each is $1,512 or $63 dollars a month bringing the total to $127.80 a month. That's $3,067.20 in all over two years.

So not only do I get a new phone every year on prepaid versus 2 years on Verizon, I save $1,524.96 over two years and get to use Nexus devices because Verizon won't carry them.

 

[swerver32]

Yes back in the unlimited days, VZ and the others charged more. So if you need unlimited data, I agree that can be tough to argue going with VZ or similar because the prepaids definitely offer better deals there. We are not data fiends, I don't think I've ever gone over 2GB on VM, so their new plans that are cheaper but with less data are fine for us. The $30 t-mo plan is appealing since it's so ridiculously affordable, but I still don't like the idea of having to jump thru hoops for making calls, and I know it wouldn't work for my wife.

 

[mogelijk]

Yes back in the unlimited days, VZ and the others charged more. So if you need unlimited data, I agree that can be tough to argue going with VZ or similar because the prepaids definitely offer better deals there. We are not data fiends, I don't think I've ever gone over 2GB on VM, so their new plans that are cheaper but with less data are fine for us. The $30 t-mo plan is appealing since it's so ridiculously affordable, but I still don't like the idea of having to jump thru hoops for making calls, and I know it wouldn't work for my wife.

On the flip side, you might look at the T-Mobile Simple Choice plans. For the two of you, particularly if your wife can get by with 500MB of data, it would cost $90/month on a family plan -- and likely you would have a corporate discount on those plans as well. There is also the advantage of having roaming (including free roaming internationally) and tethering. While this would be postpaid, it is still non-contract.

If you have 4 people you can put on the plan, the price is only $100, so only $25 per line with unlimited talk/500MB data. For lines with 2.5GB, it would be $35 per line, or $45 for true unlimited data.

Of course, if you want to add a phone, you have to buy it with an interest free loan (the price is on top of the plan rate), or buy the phone outright. Of course, this is one of the times buying the Nexus 5 from Google makes a lot of sense.

 

[batvette]

I've kept my motorola triumph for 2 years 4 mos. now, $270 +$25 a month. Time for a new phone now (the Triumph still works acceptably well, but running 2.3 there are alot of apps that don't support it) so my plan will hit $35 a month. Looking at the SIII for black friday.
If I could afford a better phone I'd be looking at Ting.