cheapest phone plan

Which Carrier Should You Choose?

A Breakdown of the Cheapest Phone Plans, Best Coverage, & Upgrade Options

The following article was published in the Spring 2016 issue of iPhone Life magazine. Learn how to get the most from your iPhone by clicking here to subscribe.

When Apple released the original iPhone in 2008, US consumers could only get it through one carrier—AT&T. You may have barely been able to make a phone call or browse the web, but at least you didn’t have to make a lot of choices. Today, there are 40 carriers in the United States alone that support the iPhone. While the competition has led to better prices and customer service, it does make buying an iPhone more complicated. This guide will help you find the cheapest phone plan with the best coverage and data options.


2015 RootMetrics US Cellular performance test results

Which Carrier Has the Best Coverage?

The most important factor to consider when choosing a carrier is coverage. There is nothing more frustrating than getting a brand new phone only to realize that you can’t reliably make calls or browse the web in the city you live in.

Fortunately for us, RootMetrics has done the grunt work to evaluate carriers. RootMetrics is an independent organization that measures cellular performance in the United States. In the first half of 2015, their staff drove over 237,506 miles and performed over 6 million tests to assess carrier performance. Below are their findings:

The Verdict:

Verizon has the best coverage in virtually every metric, followed by AT&T. Sprint and T-Mobile have improved their coverage but are still lagging behind the frontrunners. In general, you should avoid Sprint and T-Mobile if you live in a rural area. Coverage varies a lot, so make sure you ask your friends and neighbors about the carriers they use before making your decision.

Do I Still Need to Sign a Two-Year Contract?

Traditionally, mobile carriers have charged $199 upfront for a base-level iPhone (which retails for $649), and have made all their money by locking you in to a two-year contract with expensive monthly service plans. However, every major carrier has now phased out this model and no longer requires two-year contracts. While the transition has been confusing for many people, this is a positive change for consumers. Rather than subsidizing the iPhone, carriers are now financing it. Pending a credit check, consumers can avoid upfront fees and pay off the cost of their phones in monthly installments. Essentially, carriers have decoupled the purchase of an iPhone from the service plan. The overall monthly cost remains about the same, but you’re not required to keep the same phone or carrier for two years, making upgrading annually a lot cheaper.

The Verdict:

Two-year contracts are a thing of the past, and that’s a good thing!

How Much Monthly Data Do I Need?

Cellular data is what your phone uses to connect to the Internet when you are not using Wi-Fi. All of the major carrier’s plans now include unlimited talk and text and charge you based on how much cellular data you use each month. The activities that consume the most data by far are video streaming with apps such as Netflix and YouTube and music streaming with services like Apple Music and Spotify. Another hidden data hog is photo and video sharing via iMessage. According to mobile analytics firm Mobidia, the average US smartphone owner uses 1.8 GB of data per month. You can also find out your average monthly data consumption by calling your carrier, checking your online account, or downloading a data-tracking app from the App Store.

The Verdict:

Most carriers charge high overage fees if you go over your monthly data allotment, so in general it’s better to err on the side of too much data rather than too little data. I highly recommend avoiding monthly plans with 1 GB of data or less. Unless you are using cellular data to stream a lot of content to your phone, you can probably make do with a 2–3 GB plan.

Should I Buy My iPhone or Lease It?

In addition to announcing the iPhone 6s last September, Apple also launched the iPhone Upgrade Program, which lets you lease new iPhones with AppleCare+ extended warranty coverage directly from Apple. Customers pay Apple a fixed fee each month ($32.41 for the 16 GB iPhone 6s, $36.58 for the 64 GB, and $40.75 for the 128 GB) for the iPhone. Once a year, you can trade in your old iPhone for the latest model. On the surface, this sounds like the cheapest phone plan. All you have to do is pay Apple $32 per month, and you get a new iPhone every year for the rest of your life. All of the major carriers have followed suit, offering similar leasing plans.

If you factor in the $129 value of AppleCare+, the iPhone Upgrade Program ends up being an interest-free plan for financing your phone. But if you aren’t planning on buying insurance, leasing doesn’t end up being a very good deal. What most people fail to consider is that the year-old iPhones they’re handing back to Apple are still worth quite a bit of money.  It’s kind of like renting a house rather than buying one—it’s easy in the short run, but your money isn’t going toward equity.

In the chart below, I examined the true cost of purchasing versus leasing an iPhone. In order to estimate these costs, I had to make several assumptions. First of all, I am assuming that you are buying a new 64 GB iPhone each year (don’t fall for the 16 GB base model, you’ll regret it). Secondly I am assuming that you are reselling your year-old iPhone on eBay. According to eBay, the average price of an iPhone 6 sold on its site is around $500. Finally, I am assuming you are selling the phone yourself on eBay and paying eBay’s 10 percent listing fee and PayPal’s 3 percent processing fee.

As you can see in this chart, the annual cost of leasing an iPhone is $439 per year and the final cost of buying a new iPhone each year (and then reselling your old one) is $314 per year. This means that buying a new phone and reselling your old one will save you $125 per year. If you decide to upgrade your iPhone every two years, the savings are even more significant.  


Some people may be willing to pay an extra $125 per year for the convenience of leasing and for the AppleCare+ coverage, but for me (and I would imagine most people) it’s better to buy your iPhone.

Should I Upgrade My iPhone Every Year or Every Two Years?

With the carrier’s new smartphone plans, you are no longer locked into two-year contracts, making it easier and cheaper to upgrade your phone every year. But even with the new pricing, is it worth it to upgrade each year?

The chart below analyzes the difference between buying an iPhone every year versus buying one every two years. In the projections below, I am assuming that you are buying a new 64 GB iPhone each time and that you are reselling your old iPhone on eBay.

“One of the hidden factors that most people don’t look at is the depreciation rate of iPhones.”

One of the hidden factors that most people don’t look at is the depreciation rate of iPhones. According to eBay, the previous generation of iPhone is worth $500 whereas an iPhone that is two generations old is worth only $300. The end result is that if you buy an iPhone every year and sell your old device on eBay, the phone’s net cost is $314, and if you buy an iPhone every two years the phone’s net cost is $488. That being said, you are of course buying twice the number of iPhones. Buying a new iPhone every year will end up costing you $70 more per year than buying an iPhone every two years. However, if you were able to get the same price selling your old iPhone on Craigslist or in person (where you don’t have to pay fees), it would only cost you $25 extra per year to always purchase the newest iPhone every year.

The Verdict:

While it really depends how much you care about owning the latest iPhone, for me, it’s definitely worth paying an extra $70 to upgrade every year.

Which Carrier Is the Cheapest?

With all of the carriers changing their pricing models, keeping track of the latest offerings can be pretty confusing. Fortunately for you, I’ve spent many hours on the phone with all four major carriers’ customer service lines in order to get to the bottom of their pricing.

The first chart assumes that you are on an individual plan, are purchasing a 64 GB iPhone 6s, and that you require at least 2 GB of data. The second chart assumes that you’re on a family plan with four lines that each require at least 2 GB of data. Rates below exclude the cost of a new iPhone but include monthly access charges. Note: I opted for Verizon’s 3 GB plan as it doesn’t offer a 2 GB plan, so it’s not an apples-to-apples comparison.

“You face a decision between the best coverage and the best price.”

The Verdict:

Family plans are significantly cheaper than individual plans. Even if you don’t have a family of your own, it may be worth splitting a plan with a few people. Sprint and T-Mobile offer the cheapest phone plans for both individuals and families. Carriers have gotten pretty aggressive with their promotions, such as the new AT&T Unlimited Data Plan, so it’s worth calling each carrier before making a final decision to see what they’re currently offering.

What’s the Final Verdict?

I recommend purchasing a 64 GB iPhone each year with a plan that includes at least 2 GB of cellular data.  When it comes to choosing a carrier, unfortunately you face a decision between the best coverage and the best price. If you live in a big city and don’t travel much, Sprint or T-Mobile might be your best bet. Most people, though, should stick with Verizon or AT&T phone plans. If you live in a rural area, I would go with Verizon despite it being the most expensive.


Stock Photo Credit: Mahesh Patil/