When to think about a SIM only plan:
When shopping around for the best deal on a cell phone plan, many customers will typically go for a new contract - complete with the shiniest and most in-demand new smartphone model. But for those of us who are more value conscious, sometimes a new phone - and chaining yourself to a carrier with a two year contract - is an unnecessary financial strain. Instead, a SIM only plan is actually a great option if you have a phone you want to keep using, or if you can afford to buy a phone outright through a retailer and want to find a plan with the best value for money.
A SIM (Subscriber Identity Module) card is a small removable card that stores data needed to identify a subscriber on a wireless network. You can remove your SIM from your current phone and insert it into another compatible device, provided it's either with the same carrier or you've 'unlocked' it from its original network (more on this later). SIM cards make it incredibly easy to switch from one phone to another while keeping the same number, and work in any GSM compliant phone.
A SIM only plan means that instead of purchasing a new cell phone with your plan, you're just buying access to a carrier's network through a SIM card, which can be inserted in an old phone or one you've bought outside of a subsidized phone contract.
The biggest myth about SIM only plans is that they're only available to customers looking for a prepaid deal. This may have been the case in the past, but things have changed - while a prepaid option can be SIM card only, it's possible for customers to sign for a postpaid plan without being tied into a contract or locked into one device.
While many consumers are conditioned to want a shiny new cell phone the moment they're eligible to upgrade, this isn't really the smartest financial decision if there's no need for a new device. Instead, a SIM only plan is actually a cost-effective option if you already have a phone you want to keep using, or if you can afford to buy a phone outright through a retailer and want a plan that offers value for money.
You'll find that SIM only plans still come with all the features you'll find with regular cell phone plans, but will cost you less each month because you're not adding on the price of a new handset. Carriers don't make money by selling cell phones; the profit comes from selling the use of their network through voice and data plans. Often, the cell phone is just the dangling carrot to lure new customers to commit themselves to a carrier's network for the next 12 or 24 months. But, with a little research, customers may find that they can score a better deal by declining an unnecessary cell phone upgrade and finding a new plan for the cell from their expired contract.
Carriers that sell SIM only options usually have the same plan inclusions and exclusions as with their regular, subsidized phone deals. The big thing to look out for - if you're signing up to an unlimited plan, be wary of 'unlimited' data offers. These plans technically give you unlimited access to data, but will slow down speeds significantly once you've hit a certain usage point.
Most of the smaller carriers will only provide SIM cards as part of a prepaid service û meaning you pay for a certain amount of service that cannot be exceeded until you make another payment. However, AT&T and T-Mobile both offer postpaid services to customers bringing their own phones, with access to the same plans and features as customers buying a new phone as part of a contract.
If you're looking at a SIM only plan in order to avoid signing a two year contract, however, prepaid may be a better option, and if you go with a smaller carrier or MVNO, you can often find deals which will give you more minutes, text and data for your money than some of the bigger companies. The downside with choosing a plan from a smaller or local carrier is that their network coverage may not be as extensive as that of the major cell companies. However, if coverage in your area is great and you don't plan on doing any frequent traveling with your device, going small may save you money in the long run.
Unfortunately, not all carriers offer SIM card plans to customers; it depends on what kind of technology each company uses.
US cell phone companies operate under one of two network types; CDMA (Code Division Multiple Access), or GSM (Global System for Mobile Communications). Although GSM is currently the global standard, Canadian carriers still primarily use CDMA - and this is where it gets complicated. Not all the areas handle CDMA or GSM. Rogers Wireless and Fido use GSM. Bell and Telus were previously using CDMA and switched to GSM technologies.
While there are key differences between CDMA and GSM technology, the main difference you need to know is that carriers with GSM networks make it easier for their customers to swap phones, because GSM compatible networks use a SIM card.
While phones running on CDMA networks can be unlocked from a carrier, they will need to be reprogrammed in order to work with a new carrier. Instead of removable cards, CDMA networks use electronic serial numbers to identify subscribers. You can check on carriers website if your current phone is compatible with their network.
The obvious advantage of using a GSM-compatible cell phone is that you can use it on other GSM networks (provided it's unlocked), both domestically and also if you're traveling internationally - a big plus for frequent flyers. Some CDMA are marketed as 'world' phones and can be used outside Canada, but generally most models just don't work with international frequencies.
If you decide on a SIM card plan, you need to check with your intended carrier that your phone's 3G or 4G service is supported by their system. Owning a phone that is 4G capable is pointless if you sign to a network that doesn't support it. And you'll need to make sure the phone itself will be compatible with your prospective carrier - not all carrier networks work with phones from other providers due to differing technology. Again, make a quick search on the carriers' websites to see if your phone would be compatible.
So if you're still happy with your phone from a previous contract, or don't have the means to shell out for a new device outright, a SIM only plan could equal savings (especially if you're thinking of going prepaid), not to mention the benefits of not being locked into a contract.