Paid or Pre-paid Cellphone Service: Which is Right for You?

Posted by on Jan 25, 2012 | 12 Comments

I believe that I may have become somewhat enamored with Straight Talk (a prepaid cellphone service that uses networks from AT&T, Sprint, and Verizon), causing me to want to tout its newest entry to the Android smartphone arena: an Android phone manufactured through LG. It is purported to come equipped with dual core processing power, 4G connection speeds, and an 8 MP camera, which sounds very impressive. But best of all is that this is being offered for only $45 a month with no contract.

However, after discussing this with some of my fellow Gnomies and receiving some direction toward where to take this article, I realized that I have been wearing blinders and only looking at specific cellphone services and specific cellphone hardware. I was like one of the three blind mice: unable to see (or not willing to see) the many other options available. To rectify my shortsightedness, I knew that I needed to do some objective research into other brands of cellphones, the other types of operating systems being employed, and the other networks being used. In order to accomplish this, I knew that I had to determine just how well, or not so well, any particular pre-paid cellphone worked on any cellphone network, and compare how each of them performed.

I chose to perform my trials on the Internet, opening the LockerGnome website from the following phones [pictured from top left]:

  • Row #1: Apple iPhone, paid, AT&T; HTC, paid, AT&T; LG, paid, Verizon; Samsung, paid, AT&T
  • Row #2: Samsung, paid, AT&T; BlackBerry, paid, Sprint; Nokia, paid, Verizon; Samsung, pre-paid, Straight Talk [Verizon]
  • Not shown: Samsung, pre-paid, Straight Talk [Sprint]

Out of the phones appearing, only three supported 3G, while the other six did not. Unfortunately, the six that didn’t support 3G were painfully slow, requiring 30 seconds of air time before they rendered up the LockerGnome website. These six phones were, however, reported by their owners to work fine for talking and texting, but all agreed that (whether paid or pre-paid) they did not provide an enjoyable surfing experience.

On the other hand, the three 3G phones rendered the LockerGnome website as follows:

  • Apple iPhone, paid AT&T [$105 a month]: three seconds
  • HTC, paid, AT&T [$85 a month]: four seconds
  • Samsung, pre-paid, Straight Talk [Sprint] [$45 a month]: seven seconds

I do realize that this was a totally non-scientific way to test the phones. However, in my opinion, this demonstrated something I already knew. Here are some facts from my personal experience with family, friends, neighbors, and associates.

  • In my small part of the world, most people use what we commonly call a dumb phone — one used for making calls and texting.
  • Talking and texting, with the emphasis on texting, is the dominant form of communication.
  • When someone wants to surf the Internet or participate in one of the social networking sites, it is generally done on a computer, not on a smartphone.
  • Paid cellphone service is the norm (with some people thinking of a pre-paid service being for criminals or CIA agents in the form of throwaway phones). They simply aren’t aware of how pre-paid services function.
  • Due to the vastness of cellphone plans, the different types of cellphones, etc., people tend to feel overwhelmed with choices.

An example of how limited our scope is, in what is being offered by various cellphone companies, was brought home to me when Jake, here at LockerGnome, informed me that T-Mobile has a pre-paid cellphone plan. I was definitely taken aback when he told me that the company also offered an affordable 4G cellphone. Of course, that made me curious, so I decided to take a look at what was being offered and I wanted to share this with you.

Walmart, as you are probably already aware, has become one of the major distributors for many of the pre-paid plans, including one for the T-Mobile Samsung Android 4G phone, which is offered for a mere $30 a month. This $30 a month plan is an exclusive deal from Walmart and includes unlimited Web access and texting. However, it restricts you to 100 minutes of talk time per month. The phone being offered is pictured here:

Samsung Exhibit II 4G Prepaid Android Phone

  • 4G Capable
  • High Resolution Screen
  • Display: 3.7″ 16M TFT, 480×800 pixels
  • Real Web Browsing
  • Enterprise-ready Device
  • 3.0 Megapixel Rear Camera with LED Flash
  • VGA Front Camera
  • Complete Google Experience and Integration
  • GPS Navigation with Google Maps and Navigation
  • Expandable Memory of up to 32 GB
  • Stereo Bluetooth Technology
  • Slacker Radio
  • T-Mobile TV HD
  • Wi-Fi Calling
  • Voice Search

So how do you decide whether a paid or pre-paid plan is right for you? The answer is relatively simple. If you are planning to use your phone as a mini computer and spend a large amount of time surfing the Internet, get a paid cellphone plan. However, if you plan on spending most of your time talking, texting, and doing limited surfing, a pre-paid plan may work well for you. In addition, a pre-paid plan can save you hundreds of dollars a year.

It was interesting to listen to the owner of the HTC phone, who uses a paid AT&T account. He told us that he works for a federal agency and receives a 20% discount for his cellphone service as a part of his benefits package. However, even with his discount, he pays $85 a month. After hearing the pros and cons of the different phones and services available, he stated that he was considering changing his service to one of the pre-paid options available.

The biggest hurdle is what network to choose, whether it be for a paid or a pre-paid plan. Before making that decision, I would highly recommend that you try a variety of different phones. If necessary, borrow them from family or friends so that you can compare the different networks. I made a huge mistake when I bought a Samsung Android powered phone from Straight Talk using the Sprint network. Because I didn’t check it out first, I was disappointed to discover that, while it works well in most locations, it won’t let me make or receive calls from my home. In fact, to use the phone, I have to use my Wi-Fi service along with GrooVe IP to make calls, which is a pain. It requires me to call people back using the Internet to have a proper connection.

Due to my frustration with the Sprint network in our area, I’m going to take Jake’s advice and give the Android phone above along with the T-Mobile service a try. I will do a review on how well that system works for me.

As a side note, I read one blog article (which I do not want to link to in order to avoid embarrassing the author) stating that Straight Talk would be using AT&T with the LG 4G Optimus 2x; the article abruptly changed direction, stating that was an error. The next statement was that this phone would be using T-Mobile. So I contacted customer service at Straight Talk and received this reply:

Please be informed that the latest phone model that we are advertising, which is the 4G Optimus 2x, is still supported by the Sprint tower.

Comments welcome.

  • Karl Entner

    I have been on prepaid since 2005 with my original audiovox 2815 and recently upgrade to the Galaxy Gio on Virgin mobile. I prefer it over the regular contract or non contract things from the other. Since it is easier for me at any rate to work with what I need. ANd I don’t even have a data plan for it either. Don’t really need one since I connect it to wifi when needed to update the stuff on there. 

  • Karl Entner

    I have been on prepaid since 2005 with my original audiovox 2815 and recently upgrade to the Galaxy Gio on Virgin mobile. I prefer it over the regular contract or non contract things from the other. Since it is easier for me at any rate to work with what I need. ANd I don’t even have a data plan for it either. Don’t really need one since I connect it to wifi when needed to update the stuff on there. 

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  • David Evans

    My phone plan is great!  $0 per month, Unlimited mins, data and text.  All it really costs me is my blood sweat and tears.. yes I work for my carrier… 

  • Anonymous

    as I have little self control i always go for pre paid.

  • obiwan1968

    I have been using Boost Mobile for almost 5 years now. I love it. Great Samsung Transform Android phone and best of all it’s $55.00 a month totally unlimited……PERIOD! There is no $55.00 and when you get your bill with taxes and fees its $75.00. OK so it’s 3G…… I’m not doing any major computing anyway, so it works great for me.

  • D Lowrey

    I understand this will sound strange…but why bother with a data plan for a smartphone when you can get an Ipod Touch or a tablet and use Skype?

    • http://twitter.com/kpslover007 Uthman Baksh

      Remember, that only works on Wifi. I could have done that since I rarely make calls on my iPhone. But for me to be truly mobile, I need to have a 3G connection in addition to wifi. 

  • Anonymous

    Good point about credit score.

  • http://twitter.com/kpslover007 Uthman Baksh

    My mom is still forcing me to get rid of my iPhone and go prepaid. But for me, it is just not feasible. I have come to rely on my iPhone for a lot of things. I find new solutions for it when old problems arise. Plus I will be heading into the workforce in a few months. A Grown man having a phone that is designed for a kid like a prepaid phone is not gonna fly in the office. I:m just saying. My job will probably demand things like getting email on the go and having a calendar to keep me organized. Sure my computer has all the stuff I need but lugging the “Luggable” As Chris Pirillo put it sounds silly. I did that for a semester in college, that was the semester before I got my iPhone. And yes, I am one of those people that think that prepaid phones are reserved for kids and people that absolutely cannot afford a paid phone. 

    • http://www.facebook.com/garlinghaus Chris Saidwut

      Your mother clearly isn’t interested in footing the bill for your iPhone any longer. Get a job and furnish your own iPhone.

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