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Ditch your smartphone contract as soon as possible, and never sign another one again.
That might mean today. Or in a few months. Or even two years from now. Whatever the best answer is, know it and do it.
I was originally supposed to write an analysis piece on the wireless industry and the future of the contracts we sign to get subsidized phones. Sounds like a fun piece, right?
Well, after hours of research and interviews with a variety of telecom professionals, analysts and scholars, I have come to a conclusion this is best expressed in an op-ed: The wireless industry is a fractured, uncompetitive mess that has hooked customers on subsidized phones.
The only way that is going to change with any reasonable pace is if people recognize that they should never sign another wireless contract, whether for service or to finance a smartphone.
To be clear: This does not mean you should immediately leave for T-Mobile.
That’s a good decision for some people like Business Insider’s Steve Kovach, who is willing to give up his existing phone, buy a new one, sell it and then get a new phone down the line. It might be a poor fiscal decision, however, for Jon Brodkin of Ars Technica, for whom the T-Mobile offer just doesn't offer enough of a discount in his current situation.
However, when the time is right, it might make sense to break free of your cell phone contract. Forever.
There was a time when getting a contract made sense. For a two-year commitment, you get a subsidized phone. In return, the wireless company gets to lock you into a deal for a couple years. That was fine when you basically only used your phone for voice and text, and the amount of use probably stayed pretty constant.
That model is illogical in today’s smartphone market, particularly as data use continues to rise and phone technology improves rapidly. Still, consumers are acting like it's still 2009. About two-thirds of all cellphone users still on contracts, according to data from Recon Analytics.
Fortunately, the stars have aligned. Barriers that previously made it pretty much impossible for customers to move quickly between carriers have begun to break down. They include:
Phone technology: Years ago, if you wanted an iPhone, you had to get it through AT&T. Now, all the carriers have an iPhone and Android models like the Samsung Galaxy S4 and the Moto X have achieve parity. Good smartphones are everywhere (see slideshow above), and they're starting to become cheaper.
Consolidation: Years of consolidation have left only a handful of major players in the industry, meaning companies can no longer grow by purchasing customers via mergers and acquisitions and must now seek to convert customers from competitors. That means they will compete harder. For you.
Network development: As companies race to build out networks, competitive advantage based on network speed and coverage will decrease and offer less of a selling point for higher-priced competitors.
Data: Escalating usage is proving lucrative for companies, but consumers need plans that keep up with growing use as phones and technology improve, unlike voice calling which was a static commodity. Why get stuck in a two-year plan when your data usage might change dramatically over that time?
As part of this exercise, I took a look at my own plan. Two major factors ended up sticking out: my phone priorities and the data plans.
These are the basic plans that I was presented with when I first went to the sites of each of the major carriers.

Prepaid Wireless Options | Create infographics
At this point in time, every single major carrier is offering basic plans with unlimited voice calling and text. And with new smartphones operating on faster networks, the free voice and text only highlights that it is really all about data.
Armed with this knowledge, I went on the hunt for the best no contract plan I could find. I'm currently an AT&T customer, so I chatted online with an AT&T representative who directed me to mobile value share as a way to get into the company's no-contract option.
However after plenty of to-and-fro, I was eventually presented with an $80 plan for a 6GB per month plan ... plus $40 for having my smartphone. That $120 for 6GB is more than I currently pay for unlimited data. It would get me out of my contract, but I'd rather just ride it out.
Now for the T-Mobile math. I have an iPhone 5 that is not perfect but it's working. I don't want to get a 5S since the iPhone 6 is rumored to be coming (understanding your phone priorities is essential when figuring this all out).
My early termination fee (ETF) from ATT is $175. T-Mobile will not pay that because I'm not buying a phone from them. However, with my average bill hovering around $100, T-Mobile's $70 plan would save me $30 per month (both totals are before tax). So it would take me about six months to make up the difference. I have eight months left on my contract. Intriguing...
So there's a decent monetary incentive for me switching - I save money after the sixth month AND I join the non-contract folks (more on why that is important later). The last thing for me to think about is the network.
AT&T's current network in New York City (where I live, another piece to consider) is solid, in my opinion. I've heard OK things about Verizon along with the fact that it's working on a super-fast new LTE network. I am fortunate to live in a place where it seems wireless carriers are somewhat interchangeable, so I consider it a wash.
Each of the major carriers has its own low-cost brand as well, such as Boost Mobile from Sprint and Aio Wireless from AT&T. If you're looking for a no contract deal that is light on data, these are well worth checking out. However, be wary of the word "unlimited" when associated with data. There are invariably limits on how much high-speed data each account can use.
There's also the super low-end carriers. Our own Todd Wasserman had a reasonably good experience with one of them.
My conclusion on switching: Understand what you want in a phone, how much you're willing to drop and how fast. T-Mobile's unlimited data with no throttling is by far the best plan for me. Once the iPhone 6 comes out, I'll almost definitely make the switch, unless one of the other guys comes up with a better deal.
The biggest issue with my plan is that I either need to purchase a new iPhone at retail price or set up an aggressive payment plan instead of going the subsidized route.
Easier said than done. Despite all the necessary elements taking shape for meaningful change in the industry, the new deals being offered bank on the same customer behavior — demand for low upfront phone costs.
T-Mobile and its eccentric CEO John Legere have generated plenty of headlines by offering to buy users out of their contracts. Make no mistake, T-Mobile is in this industry to make money. Legere is pushing this maneuver because he realizes that the current environment has created a market opportunity that will help gain ground on its rivals.
AT&T and Verizon know this, which is why they have been rolling out their own no-contract and rapid phone upgrade plans. AT&T’s CEO even said that the company foresees the end of subsidized phones.
But the end of subsidized phones is leading to the start of financed phones, perpetuating customer reliance on carriers.
The average U.S. customer changes their handset ever 21.7 months, according to Roger Entner, telecom analyst at Recon Analytics. This habit is encouraged by two-year contracts and a steady parade of new phones.
T-Mobile's strategy may be increasing awareness of low-cost, prepaid options, but that does not mean its new customers are avoiding contracts or equipment installment plans (EIPs).
New customers quite literally cannot sign a new contract with T-Mobile, which is a nice step in the right direction. However they can enter financing deals that require a user to stay with T-Mobile until the phone is paid off either through planned payments or in a lump sum. It is a more transparent deal, but still preys on the consumer tendency to avoid big payments.
Whether it's contracts or subsidies, deals signed with carriers continue to prevent consumers from being able to switch carriers, limiting competition between the companies.
In a perfectly efficient market, users would be able to switch from carrier to carrier based on whoever offered the best deal at that moment.
In a realistic market, users might be able to switch whenever they found a better deal through advertising or promotion. This is the system most people in Europe enjoy. Consequently, they pay far less for service. The average monthly bill of a U.S. customer is just less than three times as much as that of a British customer.
The market has evolved so that a majority of wireless customers only come to market once every two years and not all at the same time.
If we were to assume an even distribution to when customers signed their two-year contracts on a monthly basis, 1/24 of the contract market would be able to shop for a deal in any particular month. That kind of stagnancy reduces competition in a market.
This is why T-Mobile's plans, including its offer to buy people out of contracts, are game changers. The company recognizes that this is the time to make its move. The technology is there, the demand is mounting, data needs are increasing and the combination of unlimited high speed data without a contract is a potent combination.
It hasn't meant an overnight change, but T-Mobile is showing signs of genuinely disrupting the market. And a foreign competitor entering the U.S. market could up the stakes even more.
"So far the U.S. carriers have been shielded from intense competition, with the exception of T-Mobile that is now playing an aggressive cost cutting game, which we expect [Japanese telecom company] SoftBank to join in," says Andreas Constantinou, CEO and founder of research firm VisionMobile. (Constantinou was referring to rumors that Softbank plans to buy Sprint; neither have confirmed the rumors.)
I didn’t hate my contract for a long time. There were multiple years where it worked well for me, back in the golden years of voice calling, text messaging, cheap regional carriers, flip phones and new episodes of Friends.
But in the modern market of nationwide carriers and smartphones that are for watching football, the contract is as modern as a Zach Morris phone.
Which is why it is up to us as consumers to break the cycle of contracts and subsidized phones and usher in a new era of competitiveness.
The industry is finally in a place where contracts are on the chopping block. It is up to us as consumers to bring down the ax.
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The iPhone 5c and 5s versions are very carrier friendly.
The Samsung Galaxy S4 is an upgrade on the S3, which was one of the best selling smartphones worldwide.
The Moto X is one of the more economical smartphones, costing $399 with no contract.
A review featured on Mashable called the LG G2 "a better smartphone than the Samsung Galaxy S4."