Crazy Idea: Drop Your Wireless Carrier and Go Contract-Free. Here's How.

A couple of weeks ago I wrote an article titled A Crazy Idea for Wireless Carriers, where I urged them to allow us to upgrade our smartphones once a year without any strings attached.  If you thought that was crazy, then brace yourself, because here is a potentially even crazier sounding idea, that actually may be not so crazy after all: cancel your contract with your wireless carrier or if you don’t feel like paying an early termination fee (ETF) just don’t renew your contract once it’s over.

Wait, cancel my wireless contract?  “But Jeff…” I hear you saying, “how will I make and receive phone calls or get the most out of my smartphone and all the apps it has to offer?” An excellent question, I’m glad you asked.  The answer is threefold: WiFi, apps that offer free calling and texting, and transitional data services.

Now before you stop reading due to dismissing the possibility of this actually ever being a viable option, just hear me out.

It’s Possible to Live Without a Carrier Contract

First, people are already doing this and are having success.

Dawn Mauricio, a yoga instructor from Montreal has been living contract free for 3-4 months now and she tells me, “I love it.”  She didn’t just drop her contract cold turkey though, first she dropped her data plan, which saved her $40 per month, then she found textPlus, a free app that assigns you a phone number that you can use to text and call people, and a week later she canceled her contract.  Now she’s spending under $10/month (she previously was spending $100/month).

Now that I have your attention, let’s talk details.

How Do You Live Free of Carrier Contracts?

I recently had a great conversation with Scott Lahman, founder and CEO of textPlus, about just how viable and realistic dropping your wireless carrier contract actually is.  It’s surprisingly more simple than you may realize — especially if you have the right tools.

WiFi

“People are not as nomadic as we think we are,” said Mr. Lahman.  If you take a look at textPlus usage data, on any given day, 80-90% of textPlus traffic comes from WiFi (Google, Facebook, Starbucks, schools, work, home, etc).  This has been a trend for textPlus since the first day the app launched back in 2008 and now with over 50 million downloads for iOS and Android, it doesn’t appear this trend is slowing down.

When we’re at home or work, our devices are typically connected to WiFi, which provides a great experience on all levels and means we are not reliant on our carrier for service then. The real issue people run into these days is while in transition.  This is where transitional data services will come in or as Mr. Lahman likes to view it, a service that provides you with a “snorkel feeding you the basic data.”  And one thing worth pointing out is that more places are putting up WiFi, parks in NYC have been lit up with WiFi, Google powers WiFi in San Francisco, one local ISP in New York is putting up WiFi hotspots around Long Island, etc.

Transitional Data Services

Transitional data services are actually something that is achievable right now.  Carriers have made it cheap enough for companies to purchase data wholesale and have the ability to resell it to make a profit.  One company that’s doing this is FreedomPop and more may soon follow suit.  Essentially, you would have to carry around an additional device with you for transition data, but you would be saving so much money.

Apps

When you sign-up to textPlus you get a phone number auto-assigned to your account, which you can use it to text people anywhere in the U.S. or Canada for free, as well as any one of the 50 million already existing textPlus users.  Additionally, textPlus also offers users the ability to purchase minutes for extremely cheap, which can be used to make local and international calls.  You can purchase 1,000 minutes for $20 or what essentially equates to 2 cents per minute.

Going back to Ms. Mauricio, she purchased 1,000 minutes back in June for $20 and just recently had to purchase another 1,000.  That’s a total of just $40 in two to three months for something that would typically cost around $100 each month.

Additional Thoughts

This is something I’ve been thinking about a bit myself and while it may seem like an insurmountable obstacle, I have a strong feeling it may start looking more appealing to many people as carriers continue to raise prices and WiFi and transitional data becomes more available.  Another interesting I learned was that Ms. Mauricio found that asking for a WiFi password somewhere worked out okay and that many people were willing to give it to her, especially if she was a paying customer.

If you are planning on dropping your carrier contract, a word of advice from someone who has done it (Ms. Mauricio): be organized, if you have a phone call planned be sure you will be home or at work, or someplace that has WiFi.

Lastly, if you do go this route, you will end up having to pay full price for smartphones, but even then, you’ll be saving money due to not having to shell out $100+ every month to your carrier.  That being said, if you want to save even more money and are living contract free you could actually just purchase an iPod touch and use that as your smartphone.

So what do you think?  Is this something you would be willing to try?