Make us your home page

A primer on no-contract phones

Just a few years ago, buying a cellphone without a contract was both unfashionable and largely unfeasible. But no-contract plans have been on the rise, especially since March, when T-Mobile abolished annual service contracts from its lineup. Now, the no-contract options are so plentiful and varied that you might want to consider one.

There are two big questions to think about before making the switch. Can I save money? Will I receive the same level of service?

Making it pay

In traditional two-year plans, carriers use a practice called subsidizing. Knowing that you will be locked in, they lower the phone's price to entice you to agree to a contract. But the no-contract universe is different. Typically, you pay full price for the phone, and the monthly bill for the service plan is less than those with two-year contracts.

The service

Be sure to study network coverage areas, data speeds, pricing and customer service reliability. Many no-contract plans provide smaller coverage areas than standard contract plans on the same network. Many new phones are compatible on multiple carriers, giving you more flexibility with providers, but do your homework.

Major carriers

T-Mobile was the first major carrier to do away with standard contracts, and perhaps the best way to see how a no-contract plan works is to compare a T-Mobile plan with a standard contract plan from another major carrier, like AT&T. Say you want a plan with a new iPhone. On T-Mobile, the 16-gigabyte version of the new iPhone 5C is available on T-Mobile for $22 a month for 24 months, with nothing down — a total of $528. AT&T offers the same phone for $100 with a two-year contract. T-Mobile users must then also pay for a monthly talk and data plan. T-Mobile's monthly plans start at $50 for unlimited talk, unlimited text and 500 megabytes of high-speed data. Meanwhile, AT&T, with its subsidized phone, offers a contract plan for $70 with unlimited talk and text and 300 megabytes of data. In this comparison, the extra $428 spent on the phone at T-Mobile is more than offset by savings of $480 over two years on the plan.

• Aio Wireless, a subsidiary of AT&T that opened in May, has three plans. Each comes with unlimited talk, text and data. The cheapest Aio plan is for basic phones, at $40 a month, with 250 megabytes of high-speed data. Smartphone plans start at $55, with 2 gigabytes of high-speed data.

Sprint offers no-contract offerings with its As You Go plans and through brands Virgin Mobile and Boost Mobile. On Virgin, a $35-a-month plan, Beyond Talk, will get you 300 minutes of talk, unlimited text and data with a high-speed cap of 2.5 gigabytes. Although Virgin and Boost use Sprint's network, the coverage areas are smaller.

Verizon, too, offers no-contract options. The Samsung Intensity III, a basic phone with a slide-out keyboard, was recently $65, and a plan with unlimited talk, text and basic data is $50 a month.

Other options

• Republic Wireless, a newer option, offers unlimited talk, text and data for $19 a month. You are encouraged to use a Wi-Fi connection when available, even for phone calls. It's a hybrid approach; when Wi-Fi is not available, your phone connects to Sprint's network. There's only one phone offered, a $99 Motorola Defy XT.

• Ting, like Republic, also offers service on Sprint's network. New and refurbished phones are available. Ting bills monthly for what you use, based on separate price tiers for talk, text and data. For example, 500 minutes of talk, 100 texts and 500 megabytes of data costs $31 plus taxes and fees.

• Cricket Wireless has a basic plan for $35 that includes unlimited talk, text and data on basic phones, and MetroPCS has a $40 smartphone plan (taxes and fees are included) with unlimited talk, text and 500 megabytes of high-speed data.

• More basic options, called pay-as-you-go plans, are available at retailers like Walmart, Target and Best Buy. You buy a phone and add services. Walmart offers basic phones through TracFone, Net10 and Straight Talk. The Net10 Samsung S275G, a flip phone with a camera, is $19.88. A prepaid card with 300 minutes of talk and Web — or 600 texts — is $29.88 for a 60-day period.

A primer on no-contract phones 11/10/13 [Last modified: Sunday, November 10, 2013 6:15pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, New York Times.

Join the discussion: Click to view comments, add yours

  1. Former CEO of Winn-Dixie parent joining Hong Kong company


    The former CEO of the Jacksonville-based parent of Winn-Dixie grocery stores, Ian McLeod, has landed a new leadership role in Hong Kong. He is joining the pan-Asian based Dairy Farm International Holdings Ltd. as group chief executive.

    Ian McLeod, who is stepping down as the CEO of the parent company of Winn-Dixie, has been hired by Dairy Farm International Holdings. 
[Photo courtesy of Southeastern Grocers]
  2. PolitiFact: Gillibrand claim ignores the cost of a paid leave program


    The statement

    A national paid leave program "would potentially put into the economy $21 billion annually."

    Sen. Bernie Sanders, I-Vt., right, with Sen. Tammy Duckworth, D-Ill., left, and Kirsten Gillibrand, D-N.Y., speaks to reporters during a news conference about the Family Act, Tuesday, March 14, 2017, on Capitol Hill in Washington. (AP Photo/Manuel Balce Ceneta) DCMC106
  3. UberEATS expands to more cities within Tampa Bay


    TAMPA — UberEATS is expanding its service area in Tampa Bay. Starting today, users in Gibsonton, Odessa, New Port Richey, Riverview and Tarpon Springs can have food dropped off at their location.

    UberEATS is expanding its service area in Tampa Bay. [Courtesy of UberEATS]
  4. Hyde Park Village awaits two new clothing stores


    TAMPA — Two new retailers, Social Status and Boho Hunter, are scheduled to open in Hyde Park Village this fall.

    Pictured is the exterior of Goody Goody, located in Tampa's Hyde Park Village.
[Times file photo]
  5. Sears closing another 20 stores


    NEW YORK — Sears is closing another 20 stores as the ailing retailer tries to turn around its business.

    In a government filing Friday, real estate investment trust Seritage confirmed that Sears Holdings Corp. is closing another 20 stores, two of which are Kmart stores.
[AP file photo]