If you get seduced by shiny adds and buy a brand new cell phone, don't. It will cost you dearly.
So what are the actual costs in maintaining a smartphone?
Let's take a look at Verizon iPhone4.
16GB iPhone4 costs $199.99 to buy on a 2 year contract. 450 minutes a month - $39.99. Mandatory data plan - $29.99. So before taxes we are looking at $270 for the first month, and then $1610 for the remaining 23 months. The total cost of ownership for first 2 years is $1880. I am sure there are taxes on top of all that.
Wow, that's a lot of dough.
How can you do better?
This is what I did. I purchased unlocked iPhone 3GS through eBay for about $300. Then, I purchase T-Mobile prepaid sim card for $100, which gives 1000 minutes. Validity is 1 year.
I am not a heavy user, so 1000 minutes lasts me about 6-8 months. After that I get another $100 worth of minutes. So during a year, I am only out the most $200, plus $300 for the phone. Over 2 years my expenses are no more than $700, usually less than that. That is a far cry from $1880 I would spend with Verizon.
There is no free lunch - my service does not include any data. I can purchase 1 day pass for $1.49 a day, which I would if I am on the road and need internet on my phone. I have not had the need for it yet.
