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9 things to consider when choosing a low-cost phone carrier

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

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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, Tello 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 (unless you're financing a phone), you may still be paying off a previous contract deal -- and there might be a penalty if you terminate it early.

Therefore, 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 Project Fi supports only a handful of Google-branded phones, and Virgin Mobile won't let you in unless you buy a Virgin phone -- and it has to be an iPhone. (The carrier no longer sells Android models.)

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. Many MVNOs are the same way (though a growing number, including Straight Talk, Ting and US Mobile, 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?

I'm a longtime Cricket subscriber, but the tier of service I've chosen is missing one key feature: mobile hotspot. It's available, but I'd have to pay more to get it. (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 voice mail?

Similarly, if you're accustomed to -- and rely on -- visual voice mail, 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 voice mail archive and listening to one message after another.

How much data do you really need?

This is a big one, because the Big Four routinely entice customers with promises of "unlimited high-speed data." The cheapest MVNO plans, meanwhile, may limit you to just a gigabyte or two.

To say each user's data needs vary widely is putting it mildly. If you spend most of your time at home and/or the office, where there's speedy Wi-Fi available, you might not need much data at all. (That's my situation, and I typically use only about 2GB per month.) But if you're out and about a lot, and/or you like to stream Netflix on the train every day, you're probably better off with an unlimited plan.

Not sure about your numbers? It's worth tracking your data consumption for a couple months before making a switch. You can do this with My Data Manager for Android and My Data Manager for iPhone.

Want a little more insight? I recently conducted a Twitter poll on data usage. Only 18 percent of respondents said they used more than 10GB per month. Nearly 50 percent indicated just 1-5GB. Bottom line: If you think you can't get by with anything less than unlimited high-speed data, think again.

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? (See above.) 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.)

Do you need a family plan?

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 Sprint offers five unlimited lines for $100 (with Hulu included free).

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!

Editors' note: This post was originally published on July 27, 2017, and has since been updated with new information.