I'm About to Save $800 Per Year By Ditching T-Mobile for FreedomPop

By Markets Fool.com

I'm about to cheat on T-Mobile . That's how it feels, because, honestly, T-Mobile's been a great carrier to me for more than two years. I've had Apple's iPhone 5 on T-Mobile's SimpleChoice plan over that period, and it's been a pretty good experience as far as carrier relationships go. But FreedomPop, a Sprint mobile virtual network operator (MVNO), will give me everything I need from a smartphone plan -- I hope -- for just a fraction of the cost.

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Alas, frugality is a wicked temptress.

By switching to FreedomPop, I'll save hundreds of dollars per year on my smartphone bill and my wife's. I'm giving up some T-Mobile perks for sure, but if all goes according to plan I'll have a little bit more cash in my pocket, all while keeping mostly comparable services.

What is FreedomPop anyway?
As I mentioned above, FreedomPop is a MVNO, which means the company buys wireless airwaves for its own connections, then sells its own phone plans at a discount. The company sells data connections for tablets and computers, and most recently expanded into smartphone plans.


Source: FreedomPop.

To save on costs, FreedomPop's call and messaging services run on Wi-Fi networks when available. That's similar to how Google Fi's new service works, and FreedomPop thinks it's the future of mobile.

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FreedomPop just finished a $30 million round of funding this month (which adds to the $17 million it raised previously). The company recently said it'll partner with an additional U.S. carrier some time in 2016, presumably to expand coverage, and will also launch service in the U.K. this summer.

Plans and pricing
FreedomPop is not available everywhere in the U.S., but I live in the Southeast, and the company offers a number of plans in this area.

I had the choice between three plans in my area, though they may differ in some regions.

Plan Voice Minutes Text Data Cost
Basic 200 500 500 MB 4G/3G $0

Pro 500 MB
4
G Plan

Unlimited Unlimited 500 MB 4G/3G $6.67 per month
Unlimited Unlimited Unlimited 1 GB 4G LTE, then unlimited3G afterwards $20 per month

Source: FreedomPop.

I choose the $7 per month plan. When I first signed up for T-Mobile, I had the 500MB data plan (which was later bumped up to 1GB for free), and I figured I could go back to what I had before without much of a problem. In an era of nearly ubiquitous Wi-Fi I feel fairly certain I can keep my data usage under my monthly allowance.

FreedomPop also offers a slew of different packages and services before and after you sign up. It's a bit confusing how many additional options there are, but here are a few examples:

  • Premium Package: Visual voice mail, hotspot tethering, higher quality calls, and data rollover. Cost: $6 per month
  • Premium Voice: High quality voice-calling, even on poor connections. Cost: $2.50 per month
  • Premium 4 GB: Up to 4GB of 4G data each month. Cost: $25 per month
  • Discount 2 GB:Up to 2GB of 4G data each month. Cost: $16 per month

FreedomPop gave me an additional 500 MB of data for free for my first month, but next month it'll go back to the initial amount. There was no time-commitment contract when I signed up, I can change my plan or add features whenever I want, and I can cancel service at any time.

Farewell old friend. Source: Author.

The phones
Unfortunately, T-Mobile's devices aren't compatible with FreedomPop's (Sprint's) network, so I had to take a few steps to make the switch. After a lot of Google searches, I found a Groupon for a refurbished Samsung Galaxy SIII pre-loaded with FreedomPop's software for just $90.

You can also choose from other Samsung devices, several iPhones, and a few others. You can also bring your own Sprint device, though only certain devices are compatible -- iPhone 6 and 6 Plus users are out of luck for now.

I'm selling my wife's iPhone and my own on Amazon, which will more than make up for the cost of the two FreedomPop phones.

Setting up service
Honestly, I thought this would be a huge hassle. I've switched carriers many times before, and I've had more problems with the big guys (cough, Verizon, cough) than I had with FreedomPop. All I had to do was select my home's Wi-Fi network, select my plan, enter my credit card information, and that was it. I made a phone call just minutes after setting it up and sent a test text message, both of which worked perfectly.

FreedomPop gives you a new phone number automatically during setup. Actually, you can pick from a list of available numbers, which seems odd, but either way you have to accept a new number before you have the chance to port your existing number.

I've initiated the process of porting my number over, but you'll have to wait for a follow-up article to see how that went. The only downside in this process so far is that FreedomPop charges $10 to port a number over. I'll gladly pay the one-time $10 price per phone to keep our old phone numbers, considering my bill will be so low, but I think FreedomPop should list the cost in its porting FAQ (it's currently not there).

Source: T-Mobile.

How much I'm really saving by switching
Right now I pay $50 for my T-Mobile plan, and an additional $30 for my wife's plan. They're both the same Simple Choice 1GB high-speed data plans, and we have the family rate, so it ends up totaling $80 per month before taxes and fees. When I set up the FreedomPop service, I paid for two $6.67 per month plans, and paid for the entire year upfront (there was no option to pay month by month).

So the price for the two FreedomPop plans for a full year came out to just $160 -- or two months of service on T-Mobile. That ends up being a savings of $800 a year, and more if you factor in the extra taxes and fees I'd be paying through T-Mobile.

What I'm giving up
Of course, I'm giving up a few things, like an additional 500MB of data per month and the ability to stream music via T-Mobile's network without it eating into my data allotment. And technically, I could go over my data cap with T-Mobile and use as much data as I wanted, albeit at vastly slower rates. But I've gone over my high-speed cap before, and I can tell you that the slower speeds seemed worse than 3G speeds and they were completely unusable. So the real loss is essentially the 500MB of data per month.

I'll write something up in a few months to see whether or not I'm missing T-Mobile's network or the extra data, or if anything else comes up. I'm guessing there may be a few drawbacks to FreedomPop's ridiculously cheap plan, but at this point I think any hiccups will be well worth the price.

The article I'm About to Save $800 Per Year By Ditching T-Mobile for FreedomPop originally appeared on Fool.com.

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, Google (A shares), Google (C shares), and Verizon Communications. The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.