On Call: Lost iPhones, unlimited data plans, and Nokia's device strategy

On Call runs every two weeks, alternating between answering reader questions and discussing hot topics in the cell phone world.

It's been a few months since I've used On Call to answer reader questions, but this week offered the perfect opportunity. Being that tomorrow, June 29, is the fourth birthday of the original iPhone, I wanted to tackle a great query on replacing a lost Apple device. Plus, the ongoing AT&T-T-Mobile merger has produced a lot of reader questions on the status of unlimited data plans, and the recent introduction of the Nokia N9 has cause many people, me included, to wonder "What exactly is Nokia doing?" It's all in this edition of On Call, so on to the questions.

A lost iPhone with no upgrade

Question: Last month, I lost a 32GB iPhone 4 that I was using with an AT&T unlimited data plan (I didn't have insurance). I'd love to get a new iPhone, but I won't be eligible to upgrade with a rebate until October and I can't afford the full price of a new handset. So to get me through the next few months, I bought a cheap messaging phone and kept my unlimited data plan because I don't want to lose it. Unfortunately, though, that also means I'm paying a lot more to use a phone that only makes calls and sends messages. Would you recommend another option? I just don't see an easy way to fix my problem.
- Nate

Answer: Ouch, Nate, you are in a tight spot. A new iPhone at full price is expensive ($699 for the 32GB model) so I don't blame you for not wanting to shell out that much cash. And I completely understand why you decided on a basic handset until your upgrade eligibility date. You can't just end your cell phone service, obviously, so you needed something to hold you over. I also hear your dilemma about the unlimited plan. As you know, AT&T will allow you to keep it when you buy a new smartphone and extend your contract. You would lose it, however, if you alter your service by adding a line or a new feature like tethering.

So yes, there's no easy answer. But the good news is that your situation isn't completely grim. As I see it, you have a few options to keep you connected until October. Each one will require you to give up something--whether it be money or some functionality on your device--but you don't have to suffer through four months of paying a lot for a phone that does little.

An iPhone 3GS and an early upgrade
Both Apple and AT&T still sell the iPhone 3GS, which is the model that came just before the iPhone 4. At full price it's not cheap either ($499), but you can get it for as low as $249 on AT&T's Early Upgrade program. With Early Upgrade, customers (like yourself) who are ineligible for a standard upgrade can purchase a new device at a slight discount while extending your contract another two years.

I know the iPhone 3Gs won't have every feature you had on the iPhone 4--and the 8GB model is the only one available--but it will offer you the basic iPhone user experience that you've come to enjoy. You'll still be able download apps, browse the mobile Web, access iTunes content, and e-mail to your heart's content. If that doesn't suit you, the iPhone 4 also is available with the Early Upgrade Program, but it starts at $399 for the 16GB model. That may be beyond your budget as well, but I wanted to offer it as an option just in case.

If you're thinking of going this route, however, there's one important point to remember. If you extend your contract now, then your new eligibility date will be pushed beyond October. And if the rumors are true, that's just when we should see the next-generation iPhone 5 go on sale. So if you're craving that handset, think about how long you're willing to wait for it. Also, keep in mind that AT&T has specific eligibility rules for the Early Upgrade program (of course it does). If you've already taken advantage of it in the last year, for example, you won't be able to use it again. Without knowing your complete customer history I can't guarantee if you're eligible, but you should certainly ask.

Dump the data plan (for now)
If you can get by on the basic handset, you might consider ending your unlimited data plan and pocket the cash until you can upgrade. Unlimited plans are great, and they offer some psychological comfort, but you may not have a need for it. As my CNET News colleague Maggie Reardon suggested, go back and see how much data you used on your iPhone 4 since you bought it. If it's way under 2GB every month, then the 2GB, $24-per month plan may be all you need. So when October comes and you're ready to trade up again, you can just select the tiered data plan that fits you best.

Another smartphone
If using a smartphone is your top priority, you could purchase another AT&T handset to keep you connected. The carrier has quite a few options that are significantly cheaper than the iPhone, even at full price. For example, a refurbished Samsung Focus is $349 without a rebate and a refurbished Motorola Flipside is $379. The Sony Ericsson Vivaz is even cheaper at just $279, but I wouldn't wish that phone on my worst enemy. Outside of AT&T, you can try buying an unlocked smartphone. Best Buy usually sells a decent selection at a range of prices.

Though both the Focus and the Flipside would require you to adjust to a new operating system (Windows Phone 7 and Android, respectively), they would allow you to put that unlimited data plan to good use. If you don't like the user experience, it's only for a few months. On the other hand, maybe you'll end up liking Android better than iOS. Another benefit of this option is that the other smartphone can serve as a backup handset once you switch back to Apple.

A used phone
This wouldn't be my first option, but you could ask your friends and family to see if they have a used iPhone (or another smartphone) that you can borrow or even buy. When people upgrade, their old devices often end up in a drawer, so there's a good chance that at least one person in your social circle has an iPhone 3G gathering dust. Just make sure the person bringing you the handset doesn't drop it on the ground and shatter the screen on the way to your house (as I've been known to do). On a related note, unless you can personally verify its condition, I wouldn't recommend buying a used handset from a stranger. You could wind up with faulty device, a handset tied to an account that hasn't been paid, or even worse, a package with just a block of wood inside.

Beg
Lastly, you could try your luck with another AT&T service rep and explain your situation in full. I've seen some service representatives make exceptions after you escalate the issue to their supervisor or manager. This option will take a lot of time and effort, but advocating for yourself and your needs can have occasional results.

Grandfathered data plans

Q: My wife wants a smartphone with an unlimited data plan. I was thinking about getting her on Verizon Wireless before it switches to a tiered plan, but I know T-Mobile has an unlimited option as well. If I get her a T-Mobile phone, will she be able to keep her unlimited data plan if the merger with AT&T goes through? Will AT&T make exceptions for existing costumers and not make them switch to the tiered plan?
- JC

A: If the merger goes through, AT&T has promised to let T-Mobile customers keep their service plans through the life of their contract. So if you sign her up for a two-year contract now, she'll have it until at least 2013. What happens after that, however, remains unclear.

Once your wife's agreement is up, I expect that AT&T will start encouraging her and former T-Mobile customers to sign a new AT&T contract. The carrier can't really force you to do it, but it can make it difficult by denying certain services to former T-Mobile users. Just think about AT&T's eventual LTE network. To use it, you'd need to buy a new LTE-equipped phone. And if you want to get that handset with a rebate, I'll bet that it will require a tiered contract.

We saw a similar situation after AT&T acquired Cingular (and when Cingular absorbed the old AT&T Wireless). Eventually, AT&T got Cingular customers to switch over when they bought a new phone, added new services, or when AT&T made changes to its network. At the end of the day, it would be in AT&T's interest to get T-Mobile customers to switch, so I'm sure the carrier will use every recourse to make it happen. Stay especially alert if AT&T were to try to change anything before your contract ended. For a "material change" like that, it should waive your early termination fee.

Verizon, as you said, is an option as well. And even when Verizon switches to a tiered data plan, we expect that Big Red will grandfather in all existing customers on an unlimited plan. I just don't know how long that policy will last.

Onward, Nokia

Q: I was surprised when I read that Nokia's new N9 runs on MeeGo. It looks like a great device, but isn't Nokia supposed to be transitioning to Windows Phone 7? Did the company change its mind?
- Dean

A: Honestly, I'm not sure what Nokia's strategy is at the moment. Yes, it did announce earlier this year that it was supporting Windows Phone 7. Though the company and CEO Stephen Elop have received a lot of criticism for the move, I think it makes sense. Nokia is doing very well selling basic phones in developing markets, but it needed a drastic move to revive its flagging smartphone business. And the combination of Nokia's superior hardware and the power of Windows Phone 7--an OS I like a lot--could be just what it needs.

Related links
• Imagining a Nokia Windows Phone
• Five things we love about Windows Phone Mango
• Top 5 things Windows Phone needs to improve
• Windows Phone Mango hands-on (review)
• First Nokia Windows Phone handset leaked?

Admittedly, though, the introduction of the N9 did throw many people in the wireless world for a loop. It does appear to be a cool handset and MeeGo remains intriguing, but we were under the impression that Nokia was moving on. What's more, Elop told a Finnish newspaper this week that even if the N9 is a hit, the company won't be installing the OS on any other handsets.

So to answer your question, the company hasn't changed its mind about Windows Phone 7. But I have no idea why it's taking this brief stop in MeeGo. If you have a theory, I'd love to hear it.