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How Pre-Paid Phone Plans Can Save Your Business Money Paying for minutes in advance can help you cut mobile costs. Here's a roundup of options for business owners.

By Jonathan Blum

Opinions expressed by Entrepreneur contributors are their own.

For many consumers, the desktop telephone is going the way of the dinosaur. With unlimited calling plans, dumping your land line can make sense. But for small businesses that still depend on such phone service, finding the right balance between service in the office and mobile service for employees can be a challenge.

As staff and customers become more mobile and travel picks up during the warmer months, demands for mobile business phone service grow. However, two-year mobile contracts force firms to commit to paying for minutes they might need this summer but maybe not this winter. What's more, business phone contracts run for several years, but most employees don't. Just one disorganized or disgruntled worker with a company cell phone can run up a large bill or fail to return the device, pushing a business into a credit-dinging spat with its wireless carrier.

But there's now another option for mobile phone service for small firms: prepaid phone plans.

In the past, cell phone plans for which the buyer pays for minutes and devices in advance have been lousy ones, usually reserved for people with poor credit or no credit. Typically, the minutes have cost more, the calling features were sparse, and email and Web access rare.

Not anymore. Prepaid phone packages are now a hot niche of the cellular market. All of the major mobile operators can offer solid value for small businesses -- including quality phones, convenient payment options (some of which let you pay in cash), and business-friendly features like email and Web browsing.

Here's a roundup of prepaid options for small businesses:


Plans: Starting at the top -- in terms of both feature sets and costs -- Verizon boasts a broad line-up of devices ranging from plain-vanilla flip phones to BlackBerry models and other smart phones. But, as usual with Verizon, you're going to pay for the privilege of superior network coverage. The most affordable monthly plan starts at $45 per month for 450 minutes -- and that's just for a basic phone. Unlimited talk and text will cost you $75 per month. The same goes for a smart phone, where data and email are included for $65 per month. Top-end plans run $95 per month.

Hardware: If you can get past the pricey plans, there are some great phones to be had, including more than a dozen BlackBerry and Android phones that start at around $200. I'm partial to the Motorola Citrus. At $195, it's economical, sleek and comes preloaded with plenty of business-friendly apps like sticky notes and calendars.

Inside tip: Mobile-to-mobile calling on the Verizon network is unlimited, so if your company's phone use is mostly within your group, sign up for a low-end plan. Daily use rates are a little better -- $2 per day -- but you'll have to add a texting bundle that runs between $10 and $20 per month. The only data option costs $30 for unlimited use.

Don't make this mistake: Don't even think about exceeding your minutes, or you'll be looking at charges of around 40 cents per minute for all but the premium plans (an unlimited plan for a smartphone runs about $95 per month).

Related: A New Conference-Call Tool Makes Group Calls from the Road Easier


Plans: If your employees use their phones a lot, AT&T has several good offerings with unlimited talk and text. There are two basic plans, and both are $60 per month or $2 per day for unlimited voice and texting. The top-tier plan, which runs $75 per month, comes with 200 Mb of monthly data usage.

Hardware: If you're on a budget, AT&T offers at least a dozen sub-$100 no-frills prepaid phones. It also has many feature-rich phones, including smartphones like the HTC Freestyle GoPhone ($299), with its touch screen and full HTML Web browser. But few of those are likely to knock your socks off. For small businesses, I recommend the LG Thrive ($179), which sports Android 2.2, which means access to plenty of useful apps through the Android Market. The phone also syncs with your Google Apps account, including Mail and Google Talk.

Inside tip: AT&T has a unique feature: Its per-day plan charges only on days the phone is actually used. So if you're strictly a Monday-through-Friday operation, you can bring your expenses down. There's also a 10-cents-per-minute plan with text packages available (unlimited texts cost $20 per month).

Don't make this mistake: The pay-per-use data rate, at one cent per 5 Kb of data, has the potential to ding you if employees do much more than check their email on their phones. Data packages for smartphones are separate and cost $25 per month for 500 Mb, which is a far better deal than the pay-per-use rate.


Plans: T-Mobile offers a good range of plans with options to pay by the month or by the minute. But they're far from inexpensive. While pay-by-the-minute plans get more affordable the more minutes you buy, you may have to spend $100 to get the reasonable rate of 10 cents per minute.

Hardware: If you need an affordable phone, T-Mobile's prepaid phones retail for less than $150. The T-Mobile Comet Black costs $130 and has Android, so it syncs with your Google Apps account. Another good buy, at $105, is the Nokia X2, which sports social-networking apps like Facebook and Twitter and can be ideal for on-the-go email with its QWERTY keyboard.

Inside tip: Overall, T-Mobile offers good value for monthly plans. The midlevel plan is $50 per month for unlimited talk, texting and Internet. If your business happens to be big on texting but does less voice, $15 per month buys unlimited SMS, plus 10 cents per minute for calling, which is about as good as you can get in pre-paid.

Don't make this mistake: Be realistic about your data needs. If you're on the pay-per-minute plans, an unlimited day pass for data will cost about $1.50. That can add up fast.

Related: Four Ways to Save on Calling When Abroad

Virgin Mobile

Plans: If you're looking for a pure-play, prepaid mobile provider, make Virgin Mobile your pick. The company, a unit of Sprint Nextel, offers inexpensive plans that come loaded with features. All of Virgin's "Beyond Talk" prepaid plans, which start at $25 per month for 300 minutes, include unlimited texting, email, Web surfing and data -- all stuff you'd have to buy as add-ons with plans from the bigger players.

Hardware: Virgin goes for quality, not quantity. It offers only about a half-dozen phones to pick from, ranging from about $80 to $200. But they're all feature-rich, web-enabled and social-networking-friendly, with even the most basic phones pre-loaded with at least a Facebook app. For businesses, I like the BlackBerry Curve 8530. At $180, it's got just about everything you may be looking for: email, Web browsing, Wi-Fi access and the BlackBerry app store. However, BlackBerry service will cost an extra $10 per month. Also, look this summer for the Motorola Triumph (not yet priced). It's a first-tier Android device, expected to meet the needs of the typical small-business user.

Inside tip: If you're looking for basic phone service, Virgin's "payLo" plans offer plenty of cheapskate options. The plans top out at $30 per month, including 500 texts plus 10 Mb of data, which is a good deal.

Don't make this mistake: With Virgin, mistakes won't cost as much. Virgin prices its plans so additional minutes cost just 10 cents each. If an employee goes only slightly over their allowance, it won't ruin your budget the way it would on a Verizon phone.

Related: A New Option to Save on Web Access for Overseas Travelers

Jonathan Blum is a freelance writer and the principal of Blumsday LLC, a Web-based content company specializing in technology news.

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