Prepaid iPhones promise satisfying value—at a high upfront cost

Later this month, you'll finally have the option to buy Apple iPhones from two so-called prepaid carriers—including Virgin Mobile, which received high scores in our Ratings of cell-phone carriers. But the new options for no-contract iPhones, while offering lower monthly costs, will require paying a higher upfront cost for the phone itself.

Virgin Mobile announced this week that it will offer the iPhone 4 and iPhone 4S beginning on June 29, and Leap Wireless will offer the phones on June 22. Plans on Virgin will start at $30 for unlimited data and messaging plus 300 minutes of talk. Leap will offer the iPhones with its $55 unlimited text, voice, and data plan.

By comparison, the most comparable standard iPhone plan, Sprint's unlimited data and messaging plan for the iPhone 4S starts at $70 a month, with 450 voice minutes. (Sprint's postpaid plans don't slow, or "throttle," data, which the prepaid carriers' iPhone plans do—Virgin if a users hits 2.5GB within a month, Leap after 2.3GB—which is more than many people use with these phones, as we've reported.)

But pricing for an 8GB iPhone 4 will start at $550 for Virgin and $400 for Leap. Want the newer (and recommended, in our Ratings of smart phones) iPhone 4S? That will cost $650 for a 16GB version for Virgin, $500 from Leap. Compare those prices with $100 and $200, respectively, for the comparable iPhone 4 and 4S from all the major carriers.

We lacked data to rate Leap in our most recent survey. But Virgin scored well with readers in both overall satisfaction and value for money. Satisfaction with data service, which is key to making the most of a smart phone's apps and Web browser, was only middling, though.

However, the relevance of that score to would-be iPhone users on Virgin is debatable. That's in part because it reflects a population of users of Virgin phones that didn't include the iPhone, whose owners may make different demands on data service. More instructive perhaps, since Virgin uses Sprint's data network, is to note that Sprint subscribers with standard contract service, including many with iPhones, gave high marks to Sprint's data service, on a par with those of Verizon.

Bottom line: While we can't definitively predict how satisfying iPhone service will be with these low-priced carriers, there are some promising signs from past history. And these carriers appear to offer a cheaper way for some people to own an iPhone over two or more years, in spite of their higher price tags for the phone itself. We'll try to confirm that soon by doing the math on iPhone costs from a range of carriers.

Related:
Would all-data mobile-phone bills be a consumer boon?
Most Verizon Wireless customers on unlimited-data plans won't miss them

—Paul Reynolds