[greenmountin]

Two year contracts are a lie, a prop, an illusion. If you break it, you basically pay back the prorated part of the phone discount you got. If you go to a carrier without phone subsidies, they'll charge you less month-to-month an amount equal to the monthly prorated phone discount.

This was my realization when pricing out basic phone service with T-Mobile, ATT, etc. You have to really work hard to pay different. Just don't be afraid to break the contract, it's not a real penalty.

[alexpopescu]

I think this is quite incorrect. I've recently got the new iPhone and looked at the possible options across AT&T, Verizon, T-Mobile (I haven't included Sprint for a reason I cannot recall right now).

If you calculate the costs over a 2 year span, the differences are quite significant: http://jots.mypopescu.com/post/61007400356/iphone-5s-choosin...

_nb_: I haven't included any interest/depreciation rates though.

[bsimpson]

I made a spreadsheet for my girlfriend when she bought the iPhone 5s. She was debating between AT&T, StraightTalk, and AIO wireless. On AIO, you're still better off on AT&T over the course of a 2 year contract by $90. If you choose StraightTalk, you'll save $174 over 2 years. (That savings goes up to $299 if you buy an AT&T phone and then immediately cancel and pay the ETF; both prices combined are less than the $749 sticker price.)

The trick is that most people don't replace their phones on a schedule. Some phones don't hold enough of a charge after 18 months and get replaced early; some people are still happy with their 4 year old phone. If you are on a pay-as-you-go plan and hold onto a phone for longer than 2 years, the savings start to really add up.

The other trick is that many people can get pay-as-you-go prices on contract, through their corporation, credit union, or university. When I was on AT&T in 2009, I used my university's alumni association to bring my cost down to $55 per month.

[judk]

What phones from the 2009 still have a serviceable battery and USB/charge port? And what are the 2013 versions of these phones?

[officemonkey]

A friend of mine is still using an original iPhone.

[askew]

Crikey. They must have the patience of a saint! Ended up having to use a 3GS when my 4 failed, and the number of times I wanted to throw it against a wall while trying to browse the web on it...

[officemonkey]

He pretty much just uses it to make phone calls.

[goggles99]

You clearly have never used an MVNO(Reseller)

I just went to Verizon and chose a free SmartPhone (Droid 4) with a 500MB data plan. It was $80/mo 2 yr contract

I can buy that phone outright (brand new) for $300.

If I go to PagePlus (Verizon MVNO) and sign up for their $1200 Minute, $3000 Text/MMS 500MB $30/mo plan here is what I paid after two years.

Verizon - $80 * 24 = $1,920

PagePlus - $30 * 24 + $300 (phone) + $50 roaming (average usage cost for 2 yrs) = $1,020

And what did I get for my $900 difference? (That is $37.50/mo BTW) A big "Verizon" label on my phone, and a two year contract.

You could get two plans and phones from PagePlus and still pay less.

I realize that there are other factors like level of customer service, and no roaming charges that VZW and ATT die-hards will tell you about. Well, in my experience, the service is no better and most people almost never use roaming service while using a Verizon MVNO. I would say that i have only spent around $20 in the last two years from roaming.

Other factiods: Have Verizon or ATT and want to change your plan options (Minutes, Data amount ETC)? Sure - that will require a new two year contract. Don't want a new phone. Well you will still be paying the same regardless. Break the contract and you will still pay the same penalty. This seems to refute your claim that you are just paying back a subsidy.

Want a new phone with your new contract? OK, choose a "free" one from a list whose retail prices have a $150-$200 difference in price. Are you going to pay less per month if you opt for the cheaper (3g) free one? If your statement was true you should.

[mynameisvlad]

Generally, MVNO customers have lowest priority on a network. I know AT&T, for example, gives network priority to Postpaid first, then Prepaid, then MVNOs. So on a congested network, you'd be the first to be kicked off.

[Hengjie]

Generally speaking, I don't think the experience would be as bad as you say. Yes they get the lowest priority but given how good AT&T's network is, you generally won't be kicked off and would probably incur a reduction in speed. The reality is, you aren't going to need (insert super fast speed here) on a day to day basis. There are exceptions of course, such as tethering or streaming content, but really, how often would you be doing that and need it? This is why I don't buy the 4G argument, especially when there're carriers that ask us to pay more simply to be on 4G.

[commandar]

I think that's going to depend heavily on where you are. I was in Chicago last week for work and found out the hard way that VZW LTE is severely over capacity inside the Loop. I'm a postpaid customer and had to force my phone to CDMA data on a few occasions just to get a usable connection.

Knowing that I'm going to be travelling a fair amount in the near future on business, I'm not sure if it'd be worth gambling that the host network for my MVNO wouldn't be similarly over capacity elsewhere resulting in me getting lower priority.

[draebek]

FWIW, Verizon MVNOs do not get to use Verizon's LTE network AFAIK. Actually, that may be the case with AT&T too? I'm not sure.

[anonymoushn]

AT&T MVNOs other than the two owned by AT&T do not seem to get to use LTE. That said, non-LTE 4G is fine.