The True Cost Of Cell Service: Prepaid vs. Postpaid

It’s the debate that will go on and on, but both sides are technically right. It’s the talk of what offers the better value, prepaid or postpaid cell services. When you break it down, both or neither services will offer you a better deal, depending on your usage – and what you pay for.

Postpaid carriers usually charge $20-30 a line more than prepaid offerings. This is to offset the cost of that $500 handset that they give you for $200. The sneaky part that the postpaid carriers don’t tell you about is the mandatory 15-30% taxes that your bill will have tacked on to it. Taking a quick look at the post paid market, there are the 4 major carriers that offer different unlimited plans.

Carrier Monthly Cost Yearly Cost Total Cost – *
AT&T 131.98 1583.71 131.98
Sprint 95.99 1151.86 95.99
T-Mobile 107.99 1295.86 107.99
Verizon 131.98 1583.71 131.98

* – Total Cost includes the yearly cost with the addition of the purchase price of the handset divided over 12 months. We assume midrange smartphone purchases for a 2 year contract at no charge and a $200 budget for non-contract devices.

Prepaid carriers, on the other hand, aren’t subjected to those pesky fees, at least not directly, so they will offer a slightly better value as most MVNO’s only charge sales tax on their prepaid cards or payments. There are some exceptions to this, but make sure to check on this because a $50 a month plan can get much closer to $60 a month with those taxes and fees. Breaking it down by popular carriers, we see the following.

Carrier Monthly Cost Yearly Cost Total Cost – *
Republic Wireless 22.80 548.60 45.72
Virgin Mobile 38.50 627.00 52.25
T-Mobile 55.00 880.00 73.33
Red Pocket 60.50 946.00 78.83
Simple Mobile 44.00 748.00 62.33
Net10 55.00 880.00 63.33
Straight Talk 49.50 744.00 62.00
Solavei 58.80 930.60 77.55
Boost Mobile 57.75 843.00 70.25

Overall, for light users that are around WiFi connections constantly, Republic Wireless offers the best value, but may not offer the level of service that most are used to. No MMS picture messages, no short code texts and a bit of a handoff issue from WiFi to cellular, but for a savings of $10-20 a month over the prepaid competitors, Republic Wireless gets the nod for lighter users.

Going up to the mid-range users, that use their phones for communication, organization and social networking, Solavei, Simple Mobile and Net10 offer the best deals. Solavei makes the cut for offering 4GB of data where the others offer 2GB. Simple Mobile’s $40 plan just makes it a stellar value with unlimited 2G data after using their 250MB of 4G data. Net10’s low cost handsets make it a great choice for those without the capital to invest in handsets without a contract. Overall, for the mid-range user either Solavei or Net10 makes the most sense.

For the business user, Solavei becomes our first choice. Solavei offers a few features for business users that the others forbid. First and foremost, with T-Mobile’s 1900mhz rollout underway, all those iPads and iPhones are now 3G/4G enabled in some markets. The other major feature that most MVNO’s deny their users is that amazing feat of tethering. With 4GB of high speed data, you can actually hook that laptop or tablet up to your device and not even worry about that cap. While we wouldn’t go streaming Netflix, for the light to medium business user, the 4GB cap will never be an issue. At $77.25 average with a $200 handset, it’s still $20 cheaper than Sprint’s unlimited offering, and this includes the tethering feature.

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2 Comments Add yours

  1. Dick Malara says:

    I like looking through an article that can make men and women think. Also, many thanks for permitting me to comment!

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