For a long time, if you wanted an iPhone, you had to sign up with one of Apple's cellular service provider partners, which in the United States included AT&T Wireless, Verizon Wireless, and Sprint PCS.
You then needed to sign a two-year service agreement, which included a hefty early-termination fee of up to $350.00. In exchange, the cellular service provider of your choice would offer a new subsidized iPhone (the iPhone 5S, for example), typically priced at $200.00 (or less).
If you already have an older iPhone 4/4S or iPhone 5 that is compatible with the AT&T Wireless service (meaning that it's a GSM-compatible iPhone), it's possible to have the phone unlocked.
You can then acquire a new micro-SIM card from any compatible prepaid cellular service provider to add the ability to make and receive calls and text messages, plus access the web via a cellular data connection, yet not be tied to a two-year service agreement.
First, Make Sure that Your iPhone is Unlocked
Most iPhones are sold to consumers as locked devices, which means they're set up to work with only one cellular service provider. However, if you have a GSM-compatible iPhone, you can unlock the device and then be able to use it with almost any cellular service provider worldwide that offers pay-as-you-go or prepaid service.
You can unlock an iPhone by yourself. For example, you can take advantage of specialized and easy-to-use software, such as iPhone Unlocker Pro ($24.95), or follow the directions offered by free how-to videos on YouTube that will walk you through this process. One such video can be found at http://www.youtube.com/watch?v=FB-3Bv660G8.
However, for most people, it's easier to go to almost any shopping mall and visit a kiosk-based business that offers an iPhone unlocking service for about $30.00. If you have a GSM-compatible iPhone 5, the phone may already be unlocked. If not, any Apple Store or participating cell phone service provider can unlock the phone for you in a matter of minutes, typically for free.
Once a GSM-compatible iPhone is unlocked, simply remove the old micro-SIM card from the device and replace it with a new micro-SIM card provided by a prepaid cellular service provider. In some cases, the required micro-SIM card is provided for free when you set up a new account. Otherwise, you may need to pay a small one-time fee (typically less than $20.00) for the new micro-SIM card.
The Benefit of Using a Prepaid or Pay-as-You-Go Cellular Service
The biggest benefit of using your older iPhone with a prepaid or pay-as-you-go cellular service is that there are no long-term contracts. You can activate the phone for one month at a time. This is ideal if you're traveling overseas and want to use the iPhone with a local phone number and not pay a fortune in international roaming charges, or if you want to give your kids the older iPhone and provide them with cellular service in the United States without making a long-term financial commitment.
As you'll discover, many of the prepaid or pay-as-you-go cellular services in the United States are very affordable. For a flat fee of between $35.00 and $70.00, most offer unlimited calling and texting, as well as access to a 3G and/or 4G (LTE) cellular data network for Internet connectivity. (Keep in mind that 4G LTE service is much faster than 3G or 4G connectivity.)
When choosing a cellular service, pay careful attention to the coverage area offered and make sure that service offers voice, texting, and cellular data coverage where you'll be using the phone. Then, focus on the fine print, especially when it comes to wireless data usage. Make sure that the advertised "unlimited plan" is truly unlimited.
You will probably discover that after a predetermined amount of cellular data usage each billing cycle, your connection speed will be throttled dramatically. Also, keep in mind that the iPhone 4/4S is only capable of a 3G cellular data connection, so even if 4G LTE connection speeds are offered by the service provider, the phone itself can't utilize it.
If you're using an iPhone 5, however, look for a cellular service provider that offers 4G or 4G LTE cellular data service where you'll most frequently be using the phone in order to experience the fastest Internet speeds possible from your iOS mobile device.
You'll Need an Unlocked, GSM-Compatible iPhone
Within the United States, a growing number of cellular service providers are offering prepaid or pay-as-you go service for iPhone users. If you want to utilize this type of service plan with a brand-new iPhone 5S or iPhone 5C, you need to purchase the phone at its full price instead of paying the subsidized rate.
For a new iPhone 5S, the price will be between $649.00 and $849.00, depending on the phone's configuration. The nonsubsidized price of the iPhone 5C is between $549.00 and $649.00, again depending on the phone's configuration. Be sure to purchase an unlocked GSM version of the phone.
You also have the option of purchasing a used or refurbished iPhone 4/4S or iPhone 5. Expect to pay between $200.00 and $500.00 for an older model, unlocked iPhone. They're available on eBay.com or from some cellular phone resellers such as GameStop.
Using any Search engine, enter the phrase "Used iPhone 4S" or "Used iPhone 5" to find online-based sellers of used and refurbished iPhones.
A Sampling of Prepaid and Pay-as-You-Go Cellular Service Providers
A growing number of prepaid and pay-as-you-go cellular service providers now support iPhone use around the world. Within the United States, some of your options include T-Mobile, Virgin Mobile USA, Straight Talk Wireless, Metro PCS, Net 10, and Cricket.
Each of these service providers will sell you an iPhone 4, iPhone 4S, or iPhone 5, or in some cases, an iPhone 5S or iPhone 5C, at a nonsubsidized rate. Or you can reactivate your older iPhone with one of these services for just the price of a new micro-SIM card and the monthly service fee.
T-Mobile offers its Bring Your Own Device service. Start by visiting the company's website and choose your device. The website will help you select a compatible micro-SIM card. A one-time $10.00 fee applies.
Next, choose your service plan. Rates start at $50.00 per month for unlimited talk and text, plus up to 500MB of high-speed Internet access. For up to 2.5GB of cellular data service per month, the fee is $60.00. For $70.00 per month, unlimited cellular data is also provided. Once the micro-SIM card arrives, insert it into your iPhone. After the initial setup process, which takes just minutes, the phone will be up and running with its own (new) phone number.
Virgin Mobile also offers a pay-as-you-go, no contract service plan for the iPhone 4/4S/5/5C/5S. Currently, for $35.00 per month, the Beyond Talk plan offers 300 talk minutes, plus unlimited texting and 3G/4G cellular data service. The company's $45.00 per month plan includes 1200 talk minutes plus unlimited texting and 3G/4G cellular data service; the $55.00 plan includes unlimited talk, text, and cellular data access.
All of Virgin Mobile's "unlimited" cellular data plans include 2.5GB per month of high-speed 4G service, after which the service throttles down to 3G connection speeds.
Straight Talk Wireless also offers a Bring Your Own Phone option. From the company's website, select your iPhone model. The prepaid plan offered is priced at $45.00 per month. It includes unlimited talk, text, and data.
Like so many other services, the unlimited data aspect of the plan includes 2.5GB per month of 4G service that, after it is used up, throttles down to 3G connection speeds for the remainder of the monthly billing cycle.
For $60.00 per month, the Straight Talk Wireless plan includes unlimited international calling between the United States and more than 1,000 destinations abroad, including Mexico, Canada, India, and China.
Metro PCS charges a one-time fee of $10.00 for a Metro PCS micro-SIM card and then offers pay-as-you-go plans starting at $40.00 per month. While the $40.00 per month plan offers unlimited talk and text, only the first 500MB of cellular data usage will be at 4G speed. For $50.00 per month, 4G connectivity expands to a monthly allocation of 2.5GB, but for $60.00 per month, unlimited 4G connectivity (with no throttling) is offered.
Net10 Wireless also supports various iPhone models and offers a $50.00 per month "unlimited" talk, text, and web plan, as well as a $60.00 per month plan that includes international calling. Both "unlimited" plans include 2.5GB of high-speed cellular data service, which then throttles down to 3G service once the monthly allocation is used up.
Starting in late October 2013, Cricket Wireless also began supporting several iPhone models with a pay-as-you-go service starting at $50.00 per month for unlimited talking and texting, plus 2.5GB of 4G cellular service (which then throttles down to 3G connectivity). A $60.00 per month plan includes 5GB per month of 4G connectivity; a $70 per month plan includes 10GB of 4G connectivity.
What to Consider Before Choosing a Service Provider
Keep in mind that 4G or 4G LTE connectivity is not yet available nationwide from many cellular service providers. So if you're using an iPhone 5/5C/5S, be sure to look at a service provider's coverage map carefully to determine whether 4G (LTE) coverage is offered in your area. Otherwise, you'll automatically connect to a slower 3G network, or in some cases, an incredibly slow and outdated 2G network.
Each time you install a new micro-SIM chip into your iPhone and activate it, you're given a unique phone number. As long as you keep paying the monthly bill, you can retain that phone number. If you stop paying the bill, the phone number could be lost after between 45 and 90 days.
However, in some cases, if you opt to switch service providers, you can often port over your existing phone number, as long as it's active with another service provider when you want to make the switch.
When swapping the micro-SIM card in your iPhone, be sure to use the small metal tool that came with your iPhone or use the tip of a tiny paperclip. Don't press too hard when inserting the SIM card removal tool into the iPhone, and be sure to handle the fragile micro-SIM chip carefully. Avoid bending, crushing, or getting the micro-SIM card dirty or covered with oil from your fingertips.