Thursday, November 17, 2011

Staying in Touch: alternatives to expensive cell phone plans

Staying in touch on the road, overseas or at home does not have to be expensive. As more and more people take to mobiles and 'smart phones', cell phone companies find more and more ways to take our money. Our recent travels overseas forced us to find alternatives to traditional cell phone plans. Now that we are back in the States, I've found that those same alternatives work just as well here... and save a substantial amount of money!

I've heard many people in the last few months complain about their 'phone bill'. I've shared my set-up with several folks and thought that writing up how I do it may help more people break free of contracts and save some money in the process.

Disclaimer: this is not an endorsement of any company or service. The services I mention are simply what I've found works for me. The costs are as of the date of this post. With the flood of VIOP, cell and service providers, you are likely to find alternatives that work better for you. Knowing what is possible is half the battle... making it work for you is the other half.

First, I'll start with what I had... an iPhone with AT&T service (unlimited data, texting and around 900 minutes a month). This ran me a little over $100 a month including fees, taxes, etc. My 2 year contract with AT&T ended shortly after we returned from Europe, so I had some time to try my alternative plan back here in the States before deciding whether or not to renew.

Last year, before leaving for Europe, we did some research on European cell plans and SIM cards. One thought was to simply get a pre-paid "burner" phone for use over there, but there were a couple problems with that idea. First, I did not want an overseas phone number that my friends and family back home would have to pay international rates to reach me or have to pay international rates myself to call the US. Second, I really enjoyed my iPhone apps and games and did not want to have to carry 2 devices.

For those that are not familiar with cell phone network protocols, there are two types; GSM and CDMA. There are many differences, but that is not the subject of this post. What's important to know is that in Europe and most countries outside North America, cell phones are of the GSM variety. Most North American carriers are CDMA. So if you are not on AT&T or T-Mobile, you have a CDMA phone that simply will not work in GSM countries... regardless of "international plans, etc".

As my iPhone was with AT&T, I did have a GSM phone. Our research led us to a 'Dual Number Global SIM Card' from GeoSIM (see link on right side of this page). This SIM card works pretty much anywhere in the world and is a no contract, pre-pay plan. Your GSM phone has to be unlocked in order for GeoSIM to work in it. You can set it to auto-reload (in my case $15 at a time) when the balance nears zero. The appeal of this GeoSIM for me was that it comes with two phone numbers... a UK and a US. This means that my phone will ring when either number is called. There is no contract and no monthly fee (although there is a small, $10, annual fee each year)... you simply pay per minute of use. In coming calls to your UK number are free and calls to your US number are 14¢ per minute. Outgoing calls depend on where you're calling from and where you're calling to. Calls from the US to the US are 48¢ per minute. This can get expensive if you talk a lot, but this is only one link in the chain.

The second piece is Skype. While Skype is no secret and has tens of millions of users, I believe most people just scratch the surface of what is possible with Skype. Skype has a plan that allows you to call any US or Canada number (unlimited minutes) for $2.99 a month. There are other subscriptions that are country or region specific, but US and Canada is fine for my needs. Once you have a subscription with Skype, they will give you 50% off of a Skype phone number ($30 a year). This is a normal US phone number like any other, the difference being that when someone calls it, Skype rings and you answer with whatever device on which you have Skype running at the time... your PC or Mac and if you have a iPhone or Android, get the free Skype app and it works just like your phone. An internet connection is required to use Skype, so this may not be an option at all times.

The last piece of the puzzle is Google Voice (GV). GV is a free phone number, but a virtual one. It can not make or receive calls in the literal sense. Once you sign up for GV and pick a phone number (or port a number to it) you have one number to give people as a way to reach you. (If you've been keeping track, I have 4 phone numbers). There's no need to tell people which number to call or when or worry about if you have wifi... for me, the only number people know is my GV. Behind the scenes, you register your other numbers (GeoSIM, Skype) with GV, then you tell GV where to send your calls. If you're home or somewhere with wifi, send them to Skype. If you're on the road with no data, send them to GeoSIM. The person calling you simply dials your number and you decide where to answer. The other benefit of GV is free SMS (texting) to US numbers. Skype charges per text message, but open up GV on your computer or smartphone and (if you're on wifi) you've got free SMS from the only number people have for you. Skype allows you 'spoof' your outgoing number, so when I call people from Skype it shows my GV number. GV also has free voicemail so if you don't or can't answer (there is caller ID), your caller can leave you a message. GV can not "forward" to non-US numbers, so the US number on my GeoSIM becomes even more essential, although it does cost 14¢ a minute.

I use my GeoSIM as little as possible since that is the one variable cost in the equation. I find I am much more selective in making cell phone calls - do I need to make this call or just want to? Can it wait until I am on wifi so I can call with Skype? Receiving calls on my GeoSIM is a matter of severity. If I choose to answer, I find out if its urgent. If not, I ask if I can call back later (with Skype when I'm on wifi). If it is urgent, I pay the 14¢ a minute. I've found (being selective with my use, not stingy) that I am 'topping-up' my GeoSIM about once a month, $15 at a time, or $180 a year. Skype costs me $66 a year for a phone number and unlimited calls to US/Canada. That's it and that is over $950 less per year than what I was paying! Even if I doubled my GeoSIM use, I'd still be about 1/3 of what I was paying. Note: The cost of home internet is not factored into this as I am paying for that with or without a "phone plan".


Pros:
  • I can make and receive calls anywhere in the world
  • I have one US phone number (behind the scenes I have 4)
  • It doesn't cost anyone in the US anything extra to call me
  • It doesn't cost me anything extra to call someone in the US
  • I choose where my calls go and when
  • I have free SMS, Caller ID and Voicemail
  • $20 a month (averaged) vs. $100
  • No contract
Cons:
  • It is complicated, although once you get the hang of it it is actually very easy
  • I do not have cellular data

The over-the-air data was the hardest thing in all of this to give up, but with public wifi becoming so ubiquitous, it is becoming less of an issue. When we were in Spain, pretty much every cafe, bar and restaurant had wifi. It was protected, but stop in for a pint and they would gladly give you the key. Eventually I had almost all of them on our walking route from our apartment to downtown. As we walked I would jump from hotspot to hotspot. I essentially had a (free) data plan at that point. Just make sure your phone has wifi capability

My iPhone was locked to AT&T when I bought it, but unlocking was pretty easy and when I popped the GeoSIM in, it worked like a charm. Recently my iPhone bit the dust, so I purchased an unlocked GSM Android based phone on-line for about $350. GeoSIM works perfectly. I downloaded Skype and GV (both free) from the Android Market. The transition was seemless and even with the new phone purchase I'm still way under what I was paying.

Lastly, I should point out that GeoSIM and most other companies that offer these type of cards are not based in the US. So setting up a pre-pay/auto top-up with them will result in foreign transactions fees on your credit card, if your card charges them.

Happy traveling. Happy talking. Happy savings.

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