This is $10 of minutes that I purchased at
my local convenience store.

“How much does your phone cost?”

and

“How do you use a phone there?”

These are fairly common questions I get, and I think it’s worth a response simply because the system here is so unlike the system we have at home in the US – it took a bit of a learning curve (and I still have questions!) to familiarize myself.

RECAP: So basically, in America, you don’t have to bear the entire cost of a new smartphone because they are subsidized by the carriers. In return, you’re limited to their network and most likely locked into a long, expensive, two-year contact, paying anywhere from $50-100 – or more – to provide that phone with service and whatever internet packet you’ve signed up for.

The system in much of the rest of the world is different. I recently bought a secondhand smartphone (my very first capable smartphone!!) and, having lived the dream for a couple months, want to tell you all about it.

Read on for numbers and money, and to learn how much your phone plan sucks!

This system features a higher upfront cost – the entire retail value of the phone – but allows you to change your number via a SIM card and buy minutes as you need them – very convenient features, and almost absurdly cheaper in the long run. Some months you need to text a lot, and some months you don’t – it’s as simple as that. I almost never speak on the phone here, which saves even more money – virtually everyone texts.

This seemingly-lopsided math actually works out in the consumers favor in the long run, as well as being more fair and simple.

For instance, check out these funky maths (Average Total 2-year Cost = number of months*average monthly bill + cost of phone to consumer):

America
Carrier: AT&T
iPhone 5 (One Generation Old)
Phone Status: New
Retail: $549.99
You Pay: $99.99
Contract: 2 years
Average Monthly Bill: $80.00 (low to mid-range plan)
Average Total 2-year Cost = 24($80) + $99.99 = $2019.99


America
Carrier: Verizon
iPhone 4s (Two Generations Old)
Phone Status: New
Retail: $450.00
You Pay: $0
Contract: 2 years
Average Monthly Bill: $96.00 (unlimited data)
Average Total 2-year Cost = 24($96) + $200.00 = $2304.00
Vietnam
Carrier: Mobiphone
iPhone 5 (One Generation Old)
Status: Used
Retail: $549.99
You Pay: $549.99
Contract: –N/A–
Average Monthly Expenditures: $10-15
Average Total 2-year Cost = 24($12.50) + $549.99 = $849.99


That is an average difference of $1312.00 over the course of two years. And this was a relatively low-end plan from AT&T – there are far more expensive ones available.

Let me state the obvious: THAT IS A LOT OF MONEY.

With a SIM card, I retain one local phone number and am tied to a single carrier when I use that card. I then purchase minutes for this SIM card. Many times they offer a deal with 50% off, making it ultra cheap to fill up. You usually get a text when there’s a promotion like that.

The used iPhone model I purchased with a small discount.
I’m in love with it – my first truly capable smartphone.

I also wanted maps on my phone, which meant I needed to use 3G. The employee who set up my used iPhone switched it on for me – data use is a little more expensive if the signal is weak, but texting is still very cheap. Since literally everyone texts here (seriously, I just got a text from my banker about some business last week), this translates into a seriously reduced cost based on how much you actually USE your phone, rather than paying for a subsidized device at a flat rate. To find out how much credit you have left (on my mobiphone), dial *101# and you’ll receive a message.

There are some downsides. My phone accidentally tried to send an email with a huge attachment last week during a class. It tried for 35 minutes, using up all my minutes that I had just loaded up on it that morning – $10 worth! When you’re out of minutes, people can text you but you can’t respond. Fortunately, more minutes are sold everywhere. Fruit carts, convenience stores, mobile phone stores, cigarette stands… everywhere. With the frequent 50% off sales, minutes can get really cheap.

This allows me to only load up the phone with minutes that I’m pretty sure I’ll use – if I’m not going to be in country for a month, for example, I would not buy any minutes for that month and my monthly phone expenses would be $0. They do expire after two months, but if you can’t text 100k of messages (over wireless: 250 VND/text) in two months, we need to talk about your social life. 😉

Of course, the major caveat with this used iPhone situation is that if I break it, I’m totally screwed. This week I had my first attempted drive-by phone stealing happen (two guys on a motorbike whizzed past me while I was parked and the guy on the back made a blatant grab for my phone – and almost had it) – fortunately I keep an iron grip on it when I’m not in a safe place. Still, it was enough to make me reconsider taking it out in public at all.

As with everything, this is an ongoing experiment. I’ll update as necessary!