This last year while in London we’ve done prepaid phones. We have Wi-Fi at home and I have Wi-Fi at work so the amount of data we need is really small. Data plans are cheaper in general here in Europe but even in the US, prepaid plans are better if you can fork out the money up front for your phone.
The iPhone with a two-year contract on AT&T, for example, costs $200 for the handset and then upward of $90 a month for the plan; over two years, including the cost of the phone, customers pay at least $2,360. With a prepaid plan on Virgin Mobile, which is owned by Sprint, the iPhone costs $650 for the handset, and then $30 a month, including unlimited data (the type of data plan that people are happier with, according to J.D. Power). Over two years, that would cost about $1,370.
The biggest drawback until recently though is that you couldn’t get a decent smartphone under a prepaid plan.
Finally, until recently, prepaid phone companies haven’t offered handsets that are as compelling as the ones you can get with a contract. Only in the last few months did the iPhone and some big Android phones become available through prepaid phone companies.