On Average, Americans Would Save $200 By Switching to a Prepaid Cell Phone Plan
Cell phone service through one of the Big 4 - Verizon, ATT, Sprint, and T-Mobile - isn't cheap, especially if you need to get a phone that works with their network. Their deals, which often focus on family plans, aren't great for a single person. Not to mention their oppressive, universally despised contracts. If you think that cell service could be cheaper with another company, you're right. Switching to a contract-free, pre-paid cell phone plan can save you $200 or more every year.
Services and Phone
Let's compare Sprint Mobile and Ting to keep things simple. Since Ting uses Sprint phones and the Sprint network, service and costs should be about the same. Let's assume you want a smartphone for email and basic web surfing, but you don't need the most powerful phone on the market. The Kyocera Hydro EDGE is a solid, mid-range smartphone and available for Sprint and Ting. It's also waterproof, which makes it a reasonable choice for indoor and outdoor types. Again, for simplicity, we'll say you only want cell service for yourself, rather than a family.
Usage Basics
Let's set out some basic usage information to make the comparison fair. The average, adult smartphone user spends about 15 minutes a day talking on phone, which works out to about 450 minutes a month. Let's conservatively estimate around 2000 text messages, sent and received, and guesstimate around 500MB of data used each month. Of course, if you never talk on your phone, but text heavily or stream a lot of music, we'd need very different numbers. For our purposes, though, these numbers are probably close to normal usage.
Sprint
Starting with that usage information and a Hydro Edge, let's see what the Sprint offer would look like. A new Hydro EDGE from Sprint runs approximately $9.59 a month, for two years. If you do that math, the final cost of the phone will be about $230. Since Sprint is pushing its Framily Plan at the moment, we'll use that as their standard plan. The Framily Plan offers unlimited talk and text, as well as 1GB of data at no additional cost. That covers all of the bases for our average person's usage.
For a single person, using one phone, the plan cost works out to $55 a month. Taken together with the monthly $9.59 for the phone itself, your monthly bill is $64.59. For a year of service under this plan, you're looking at about $775. You'll also need to account for the $36 activation and other one-time fees that Sprint charges, bringing your one year total up to $811 before taxes and surcharges.
Ting
Now let's turn our attention to Ting. We'll use the same phone and usage information that we did for Sprint. Ting doesn't offer financing for their phones, which mean you need to buy one up front. That can be a hard pill to swallow in the short-term, but let's look at the math. A new Hydro Edge from Ting costs $188 before tax. Compared with the $230 you'll ultimately pay with Sprint, you've already saved $42 in the long-term. Also, after you buy the phone, all you pay for are the services you get through Ting.
Unlike Sprint, Ting charges you at the end of the month and only for your actual usage. Based on their listed rates, your bill will break down this way. For 450 minutes of talk, you'll pay $9. 2000 text messages will run you $8 and 500MB of data goes for $12. Rather than charge a lump sum activation fee up-front, Ting charges a $6 monthly fee for each active device. Assuming you only have one phone through Ting, your monthly bill will be $35. That brings your annual cost for service to $420. After you add in the $188 for your phone, the total for a year comes out to $608.
Results
For one year of service, you save approximately $200 going with the prepaid Ting service over a Sprint Framily Plan. Where it gets really interesting is during the second year. Let's say you keep your Hydro Edge for the second year. If you stick with Sprint, the costs for year two will run about $775. Your year two costs with Ting are $420, which saves you another $355.
Sprint and the other Big 4 cell companies charge you a premium for services you aren't likely to use in full. This type of premium pricing pads their profit margin, while you see no significant boost in the level or quality of service. By switching to a prepaid cell phone plan, like the one offered by Ting, you pay for what you get and save hundreds of dollars in the process.