Cellphone Plans for Geeks

Same stuff, less money.

In an effort to be more frugal, I've recently altered my cellphone plan to one in which I get unlimited data and text messages for $30/mo. When I say frugal, I don't mean cheap. The goal here isn't to spend as close to 0 dollars as possible, but rather to minimize the expense things to the point feasible, given your values. I value having a smartphone with maps (specifically with bicycling directions) quite a lot, so I'm willing to spend money for it. Eric Holscher (the only person I know with a feature phone) values knowing how to get around the city without needing a phone, so his calculation is different than mine. This is the essence of frugality. Now its just a matter of minimizing the expense such that I can still get my maps any time I want them.

My usage patterns

I don't feel my social circle's cellphone usage patterns match that of the general populace. I don't make many outgoing calls but I do use the internet quite a bit. My usage ranges between 30 and 70 minutes per month. I tend to use somewhere between 500MB and 5GB of data per month. I don't watch feature length movies on my phone/tablet, but I do view the occasional youtube video. I also use my phone as a wifi hotspot (and even managed to download Xcode through it when I didn't have internet installed yet).

But what about you folks who actually use your phone as a phone? T-Mobile sells refill cards for their pay-as-you-go phone plans. The one you should buy is the 1000 minute refill card for $100 ($0.10/min). The reason for this is that all of the other minute refill plans expire quickly (I think its within a month or three) if you haven't used those minutes. The 1000 minute refill card expires after 1 year.

How it's done

The general components involved in this are T-Mobile and Google Voice. The constraints I had were that I wanted to maintain the telephone number I've had for the past decade. I had the benefit of a completely unlocked phone which was not tied to a contract.

A brief diversion into cellphone contracts

My cellphone (a Galaxy Nexus), when purchased outright, costs $349.00. Its a solid phone and does all of the things I'd like it to. Given T-Mobile as an example, you can get an unlimited everything plan with a contract for $94 per month. That same plan in a pay-as-you-go scenario is $70 per month. So the cost of your phone is $24 every month. For the life of your 2 year contract, that's $24 *12 * 2 == $576. So you're paying T-Mobile $225 for the privledge of being locked into a contract. Let's do the math with the latest android phone on the market, the Samsung Galaxy S III. The no-contract phone costs $700. With a 2 year contract, its $180 + the contract. We've determined the cost of the contract is around $575, so this puts the price of the phone at $755. You're effectively paying 7% more for the phone because you can't save $700 to buy the phone outright. Welcome to crazy town.

T-mobile

There is a plan in the T-Mobile Monthly 4G plans which is $30 per month for unlimited text, data and 100 minutes per month. There is also a plan for 1500 minutes of talk with 30MB of data. You do NOT want this one.

  1. Buy the activation kit for $0.99. This will come in the mail, because the stores I called around to said they weren't allowed to sell them straight to me.
  2. Activate your new SIM card, selecting the plans you want.

You should now have the cellphone plan and an activated SIM for your phone. If you ported your number during the sign up process, you should be good to go.

Google Voice

Because I was already a T-Mobile customer, I couldn't port my number to a pay-as-you-go plan that was also on T-Mobile. I could pulled some shenanigans like port my number to an AT&T pay-as-you-go then port back, but that seemed like quite a lot of hassle. Instead, I turned to Google Voice. It is worth mentioning that there are inherent risks involved with things like this, but given my being previously employed at Google, I feel I have sufficient connections to mitigate the risk.

During this process I just followed Google's directions. It worked fairly well. I went through the process on a Sunday and was able to receive calls on my new number the next day. It took 2 days before I was able to receive text messages. Not the end of the world, but was slightly inconvenient. The total cost for the porting was $20. What I really like about this, however, is that I'm now free to choose the best plan for my needs without having to worry about number porting.

Result

In the end, I'm left with my cellphone number ported to Google Voice, which gives me the freedom to choose a backing cell-phone provided that offers the best value and coverage without a contract. I get handy extra features like being able to forward voice mails I get to hackygolucky so she can handle something while I'm at work, or resetting my venmo password (who texts you the new random password) and getting that via email, not having to pull out my cellphone. Not world-changing, but quite convenient.

I have a $30/month cellphone plan in which I get unlimited web, texts and all the minutes I need. This saves me $40 * 12 == $480 every year at effectively no difference to me. Free money!

Total costs to get this setup were:

Table 1: Startup costs for a $30/month T-Mobile plan
Item Cost
Activation Kit $0.99
T-Mobile Activation Fee $35.00
Google Voice Number Porting $20.00

Which puts us at $56. These costs are recouped within the first 2 months of service. Getting the same service for less money? Just disappointed I didn't do this sooner.