Why I paid Verizon $160 to break my contract

Look at all the suckers. I mean customers

I used to be one of Verizon's most loyal customers.  I had service with them for about 9 or 10 years and I didn't leave when AT&T got the iPhone.  Verizon used to have the best phones, the best service, good customer service, and reasonable prices.  However, since smart phones have become more popular the carriers have been offering less and charging more.  It's annoying.  The days of Verizon and AT&T being the only viable cell phone carriers are over.  Low budget carriers, such as Boost Mobile or Cricket Wireless, have typically been viewed as inferior and for poor people.  I generally would have agreed because of their sucky phone selections and lame service.  With that said, Verizon's business model of charging more and giving the customer less has become too irritating and better options are now available.  You can easily buy unlocked phones and service plans without contract.  We are switching to Straight Talk and here is why:

History
At one point we had a Friends and Family plan with 700 minutes, unlimited texting, and two unlimited data plans.  The total cost was just under $140 a month AND that was after the 20% discount I received through work.  $140 was our second highest monthly bill, which is annoying.  I have a work smart phone, so I didn't really need 2 smart phones.  I decided to drop my personal smartphone and switched to a legit slider phone that I used for calls and texts.  That reduced our monthly bill by $30 to about $110 a month.  Since I changed my plan, I lost my ability to ever get unlimited data again.  About 6 months later my contract ended and I decided to port my number to Google Voice.  This allowed me to route my personal number to my work phone and call and text from my work phone.  Texting is free with Google Voice too.  My plan was to keep my wife on Verizon, but get rid of the costly Friends and Family plan.  I was hoping to reduce our monthly bill to around $70, but that was a pipe dream.  I called to change my wife's plan to 450 minutes, 2 GB of data, and unlimited texting.  Our monthly bill dropped to $90 a month, which is not much of a savings.  450 minutes is weak.  Since we were changing our plan, we were forced to drop to 2 GB of data.  Here's the kicker:  2 GB data costs the same as unlimited data.  I don't even remember what texting costs, but it should be free.  There are 100's of apps that let you text for free anyway.  Verizon wasn't done yet, they had one more trick up their sleeve.  The first month after the plan changes started our bill was going to be $125 and then drop down to $90 going forward.  Verizon managed to make me pay more the first month and give me half the service I had before and barely reduce my monthly payment ($90 from $107).  Well Done!

Dilemma
The termination fee on our contract is $160 and we are stuck until June.  However, Straight Talk offers $45 unlimited everything (minutes, data, and texting) on T-mobile's network.  T-mobile's network works great in our area.  You just have to use an unlocked phone, which we already have.  Should I stay with Verizon or switch to Straight Talk?

Cost to stay on Verizon

$124 for the first month and $90 for the next 3 months until our contract ends in June.

Total Cost: $394 until the of our contract

Cost to switch to Straight Talk

$160 early termination fee, $15 sim card, and $45 for 4 months

Total Cost:  $355

Summary
The total savings is only about $40, but that doesn't consider we get unlimited data and no contract.  The savings over a 4 month period isn't that large, but lets play out a scenario over a 2 year contract.

Verizon
Price of Smartphone:  $200
2 Year contract Service Fees: $2,400 (24 months x $100 a month)

Total Cost of Contract:  $2,600

Straight Talk
Unlocked Iphone $600
2 Year Service Fee (no contract): $1080 (24 months x $45 a month)

Total Cost of Service:  $1680

Total Straight Talk Savings compared to Verizon:  $920!

That is a rather large savings for a 2 year period.  This is a high level analysis, but just gives you an idea of how much you could be saving.  You also don't have to buy an unlocked iPhone, which is probably the most expensive unlocked phone on the market.  The Google Nexus 4 is only $300 unlocked or you could buy one off Craigslist for cheaper.  Over a 4 month period it was worth it for us to pay Verizon to terminate our contract and it most likely is worth it for you to terminate your contract.  The average student loan payback period is 10 years.  If you saved an average of $1,000 every two years, over that 10 year period you would have pulled $5,000 out of thin air.  You would get unlimited service, good coverage, NO CONTRACT, and big savings.  The biggest hurdle for people is buying an unlocked cell phone.  You do have to pay a larger investment upfront, but you get that money back on the back end.  I won't go as far to say Verizon will be out business in the next ten years, but if they do not change their business model they will no longer be a dominant player in the industry.