Tired of the 4 big wireless operators? There are alternatives
Comparing wireless plans can be a challenge as you’re usually dealing with a moving target. The four major carriers AT&T (NYSE: T), Verizon (NYSE: VZ), T Mobile (NASDAQ: TMUS), and Sprint (NYSE: S) change their offers and promotions quite often.
Sprint, which is trying to merge with T-Mobile, has generally been the cheapest carrier, but its offerings can be confusing. Some only last for a limited time, while others require you to keep an old phone or come with restrictions that you may not want.
The same thing happens at various times across the four major carriers, making it difficult for consumers to know where to turn. However, it is possible not to use one of the big four. Instead, you can go with a second tier carrier that offers prepaid wireless plans which can save you a lot of money. There are some pitfalls, however, and the change may not be for everyone.
Prepaid vs postpaid
The big four wireless carriers generally offer postpaid service. This means that you sign up for a plan and pay your bill at the end of the month – much like you typically pay for cable or electricity. The smaller carriers, some of which are owned by AT&T, Verizon, T-Mobile, and Sprint, offer prepaid plans, which means you pay the month before you can use your phone.
Prepaid plans are often cheaper, at least in the base price, than what the major players are offering, but there are a few things to watch out for:
- Data Limits: Some plans include a certain amount of data and then you pay if you need more. Others offer data at 4G / high speed and then slow you down if you pass.
- Lack of phone options: You may not be able to use some popular smartphone models with some services.
- No possibility of staggering payments by phone: Secondary prepaid carriers typically do not lease phones or sell them on installment.
- Coverage gaps: These operators lease network access to one of the four major operators. In some cases, they seek to connect over Wi-Fi first, which can lead to occasional connectivity issues.
- Bad customer service: Yes, the service can be even worse than AT&T and Verizon because in many cases it is mostly self-help and it can be difficult to have a human on the phone.
It makes sense to go for a prepaid plan if you’re not a heavy data user and are ready to use an older or non-branded phone. It’s not for everyone, and if your phone is part of your livelihood, it might not be smart to pinch pennies in this area.
Should you ditch your main operator?
For most people, the savings may not be worth it. However, if you have a family with a few phones, saving $ 20 to $ 30 per person per month starts to add up quickly.
Start by looking at your monthly phone bill. Does your family need unlimited data? Does one person or a few people exhibit different usage patterns from others?
Once you understand how you use your phones, think about your options. There are many prepaid operators, some focusing mainly on offering a low price while others offer a lot of choice. Explore the options and examine the partners for each prepaid business.
If, for example, you are a happy T-Mobile customer, you might consider switching to Metro, a prepaid brand that it owns. If you are not happy with your current service, you may want to consider a prepaid reader in partnership with another major carrier.
Change savings can be significant if you make sacrifices. Giving up unlimited data will save you money, assuming you don’t exceed your limits with your new carrier. Your options are very wide here, so do your homework and in many cases the switch will save you money.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.