Featured Editorial: The Future of Carriers: Prepaid and Unsubsidized

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There have been quite a few recent developments with carriers and unlocked or unsubsidized devices. So what's the future of mobile, at least on the carriers side. Starting with the Nexus 4. It was announced in late October, and released in mid-November on the Play Store, starting at $299 unlocked. That's a crazy price. Especially since Verizon is pricing the most of their high-end devices at $299 with a contract. Next, T-Mobile decided they would stop with the subsidies. Which means no more of the Classic plans, and instead you're stuck with the Value plans. Which when you think about it is a good idea for the consumers and T-Mobile. You also have all these prepaid carriers to choose from nowadays. Including Straight Talk, Simple Mobile, T-Mobile Monthly 4G, Solavei and more. We've already done an article comparing the best prepaid, no contract carriers for GSM networks back in November, you'll want to check that out.

Contract? What Contract?

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Many of us are probably still tied to a contract here in the US. We are one of the many countries where carriers heavily subsidize devices. Although we only have 2-year contracts in the US. Our Northern neighbors, Canada, still has 3-year contracts, which is just crazy. So all of our friends in Canada need to pay attention to those no contract and prepaid carriers. Lately, many of us have been giving our carriers the theoretical middle finger and moving to a no contract plan or carrier. The Nexus 4 release got tons of people out of contracts and into carriers like Straight Talk, and Solavei. And it even got yours truly out of Sprint and onto T-Mobile without a contract.

What's the point of a contract? Well it's so the carrier knows you'll be around for the next 24 months. That's why they have an early termination fee, which ranges from $250-350 per carrier, and goes down about $10 per month after the first 6 months in your contract. And this is why carriers subsidize your phone. Instead of you paying $699 for the Galaxy Note 2, which is the full retail price, you'll pay $299 at Sprint, Verizon or AT&T (T-Mobile is a bit more expensive) and you're tied to a 2-year contract which you're basically paying off the rest of that phone during that time while you're paying for the service. Now what if you pay full price for your device. Does your monthly payment decrease? No it doesn't. That's where T-Mobile's Value plans come in.

Why Prepaid Carriers is the Right Choice

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Many look at pre-paid carriers as a carrier with okay service and is cheap, so theoretically for students or the lower class. But that's not true. Just because you make a decent amount of money doesn't mean you need to pay $120/month for service that you could get for $30-60/month. Many pre-paid carriers out there today run off of the T-Mobile or AT&T network since those are the only two national GSM networks in the US, meaning that just about any unlocked phone can run on their network. Also known as MVNO's (Mobile Virtual Network Operator). With Straight Talk, you get to choose if you want a T-Mobile or AT&T SIM card. And because you're not on a contract, you can quickly switch from either network on Straight Talk or even switch to something like Solavei or Simple Mobile without any penalties. So you're able to see which network best fits your needs. While they all offer unlimited data, they all throttle you after either 2GB or 5GB of data, but there are no overages.

Will Other Phones Sell as Cheap as the Nexus 4?

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That's a good question. I'd hope so, especially if they want to compete with Google and the Nexus line. When Google introduced the Nexus 4, they shocked us by offering the 8GB version for $299 unlocked and the 16GB version for $349 unlocked. The only thing here is that it's almost impossible to actually get your hands on a Nexus 4. We are already seeing a few Chinese manufacturers like Huawei and ZTE bringing some cheap handsets, around $300-400, but they aren't on par spec wise with the Nexus 4.

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I'd love to see Samsung, HTC and even Motorola put out some devices that retail for around $300-400 with some great specs, even if they are running Android 4.1. Although, there are still plenty of people that would pay full price for the Galaxy S3 or even the Galaxy Note 2 ($549-699) and put it on one of these prepaid plans. In the long run you'll be saving a ton of money anyways.

Final Thoughts

I really love the fact that I'm not tied to a contract anymore. It basically means I can leave T-Mobile at any time, and although I won't be eligible for an upgrade, I can still get a new phone whenever I want. I honestly think that between T-Mobile's Value Plans and prepaid plans on other carriers, that is the future of mobile. I'd love to see a lot more unlocked phones come out soon, especially ones that support LTE, since that is the new technology that these carriers are now adopting.

How about you? Are you tied to a contract with a carrier, or are you contract free? Why? Hit up the comments below and let us know.

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