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7 things to consider when choosing a low-cost carrier

Thinking of ditching your Big Four provider in favor of something cheaper? Here's what you need to know first.


Juan Garzón / CNET

It doesn't seem that long ago that owning a mobile phone meant roping yourself into a two-year carrier contract, to the tune of at least $70 per month. Barf.

These days, you can skip the contract and pay considerably less, especially if you choose an MVNO, a mobile virtual network operator. These carriers lease bandwidth from the Big Four -- AT&T, Sprint, T-Mobile and Verizon -- meaning you get the same core service, but usually at lower rates.

Perhaps you've heard of some of them? FreedomPop, Mint SIM, Republic Wireless and Ting are among the MVNOs that have made headlines with cheap prices and/or unconventional business models, like paying for a year in advance or paying only for the service you use.

Before you make a change, however, you'll want to do a bit of homework. Some low-cost carriers impose limits you might not expect, or require you to pay extra for certain features. Here's a list of questions to ask before you take your phone business elsewhere.

Is your current phone still under contract?

Although the Big Four carriers have largely abandoned the contract model, you may still be paying off your phone as part of a previous contract deal -- and there might be a penalty if you decide to terminate it early. If you currently have a Big Four service plan, check with customer service to make sure you're free and clear to change carriers. (Who knows? They might offer you some incentive to stay.) If not, T-Mobile still offers a contract-buyout option -- but only if you lease or finance a new phone.

Is your current phone unlocked?

This is of utmost importance: If your phone is locked to a particular carrier, you can't take it elsewhere. Fortunately, it's legal to unlock it, and usually not too difficult. To find out whether your phone is locked and get help unlocking it, check out "How to unlock your phone for use with another carrier."

Will you have to buy a new phone?

The vast majority of MVNOs let you bring your own device (an option more commonly known as BYOD), which is great if you already own a phone you love. But there are exceptions: Google's Project Fi supports only a handful of Google-branded phones, and Virgin Mobile won't let you in unless you buy a Virgin phone. (If you're in the market for an iPhone, however, you can buy it from Virgin and get a full year of service for just $1.)

Does the carrier support GSM or CDMA?

So you're thinking of ditching Sprint in favor of, say, Mint SIM. Just one problem: Your Sprint phone may not be compatible. See, Sprint and Verizon use cellular networks based on CDMA technology, while AT&T and T-Mobile rely on GSM. Most MVNOs are the same way (though a few, like Ting and Straight Talk, support both).

That means you probably can't hop between CDMA and GSM carriers, because most phones work with only one or the other. There are exceptions, though: most current-gen iPhones, most Google-branded phones and some Motorola models have antennas for use on both networks.

Want to know if a specific carrier supports CDMA or GSM (or both)? Wikipedia's list of US MVNOs shows you each one's host network and compatibility. As for which side your phone lands on, some quick web searching should answer that question.

Does the plan include mobile hotspot?

Recently I named Cricket my preferred low-cost carrier, but there's one feature I really miss: mobile hotspot. It's available, but not included with the plan I've chosen. (I thought perhaps I could game the system with a third-party hotspot app, but, alas, it didn't work.)

Indeed, the hotspot option (also known as tethering) isn't always available from MVNOs, or at least isn't always included with the lower-cost plan. If this is an important feature for you, check before switching.

Does the service support visual voicemail?

Similarly, if you're accustomed to -- and rely on -- visual voicemail, make sure you can get it from your intended MVNO. A fair number of them don't offer the feature, and you may have to do a little digging in FAQ and/or support pages to find out. Personally, I don't get a lot of messages these days, but I cannot go back to dialing into a voicemail archive and listening to one message after another.

Is it really cheaper?

Before you make a switch, make sure to do the math. Sure, a $35-per-month plan may sound appealing if you're currently paying, say, $60, but does that price include taxes and fees? What's more, will it give you enough data per month? Although many users can get by just fine on a few gigabytes, a lot of MVNOs quickly hit the $50-$60 mark for higher data allotments. 

Ting, for example, a widely beloved carrier known for stellar customer service, touts an average bill of $23 per month, per phone. Your monthly bill depends on your actual usage. But if you consume more than 2GB (which the average user does), you could easily end up with a bill of $40-50. (Ting charges $20 for the first 2GB and $10 per after that -- not including voice minutes and text messages.)

What's more, the Big Four carriers tend to offer price breaks on family plans; a lot of MVNOs don't even have such plans, instead catering primarily to individual users. If you're looking for service for, say, a family of four, and find plans priced at $35 per line, that seems pretty good -- until you realize that T-Mobile offers four unlimited lines for $40 each (and some decent perks along with).

Just as cutting the cable TV cord isn't always the money-saving move people think it is, switching to an MVNO might not lower your bill quite as much as you think. And you might have to give up more than you expect.

That said, if you've found an MVNO you love, share the details in the comments!

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