As we told you earlier, AT&T wasn’t budging on their upgrades this time around. If you are in the middle of a current contract, AT&T wants to charge a $250 early upgrade fee, a $36 activation fee, and the price of the actual subsidized iPhone — in my case the $199 16GB version.

After doing the math, that totals over $500 for a new iPhone 5 with a two year contract, which is ridiculous. Why pay that much only to be locked into a contract for an additional two years? Instead, I decided to take this approach, and purchased an off contract iPhone 5…

Since Apple wasn’t planning on selling any off contract pre-orders just yet, going through a carrier like AT&T or Verizon is the only choice at the moment.

The process, as you saw in our previous post, is really straightforward. All you do is select the off-contract iPhone 5 of your choice, select the cheapest month-to-month plan, and order the device.

Here is a screenshot of my final results:

In a nutshell, I was able to score an off contract iPhone 5 for only a little bit over $150 more than a two year contract version, due to AT&T’s silly early upgrade policies this go-round.

Once I get my phone, I’ll cancel service on this new line, and the iPhone will be mine, since I paid full price for it. No ETFs, or other ridiculousness. They should also, technically, waive the Activation fee involved, though I’m not holding my breath. After that, I’ll have them unlock the phone (if not already), and use my current AT&T sim card (which I will cut) that’s in my iPhone 4S, in my new iPhone 5.

Why am I so adamant on having an off-contract phone, when going with a contract would save me a few dollars? Well, for one, it’s principal, but more importantly, it sets me up nice for next year’s upgrade, presumably the iPhone 5S. The fact that I’m not locked into AT&T is great as well. Just the feeling of not being locked down is a good feeling to me. I’m free to roam where I choose, though, admittedly, the options are a bit limited in the States.

Sound like a solid plan to you?

  • I’d be interested to hear what prepaid options are available. Straight Talk told me they’re not supporting iPhone 5 right now. Cricket is but it’s locked to their CDMA network.

    • If the sim can be cut straight talk will work, but i don’t think they offer LTE.

      • englishmike

        You cant cut the Straight Talk sim down as the actual “chip” is to large, they use the old style Micro Sim cards. Red Pocket have the new Micro Cards that can be modified.

  • Shouldnt it be a nano sim though?

  • Jay

    Wont you need a nano sim?

  • Your gonna have to cut your sim to fit the new iPhone then

  • VATekMan

    You also seem to be assuming that they will unlock the phone… They have only recently starting unlocking the iPhone, so I would not assume that they would do it right away wit the iPhone 5, but here’s hoping…

    It would just be nice for apple to just go ahead and release the unlocked version, make this all a lot easier…

    • Even if they don’t, I can get it unlocked by myself at the drop of a hat, so I’m not worried about that.

      • Blake

        Yeah. You can get an iPhone factory unlocked for around 12$ jeff!

  • should just wait for them to release it unlocked, less hassle signing forms and heaving some headache Jeff, I sell my used phones and my 4S and get the 5 once they offer it factory unlocked

    • Blake

      You can get an iPhone unlocked for only 12$ if you know where to look!

      • I think you got it wrong, I know and I do iphones unlock, but the iphone 5 is not even for sell yet, so if the company don’t even have it for sell, how can I unlock it??? once they have release it on the stores, how can you be so sure that “cellphone guys” will be abke to unlock it at the first glance? so once the apple offer the new one unlocked I will buy it.

      • Blake

        Because they are universial IMEI unlock codes. ATT does the same thing with them every time, and the iPhone uses IMEI’s so obviously the unlock will still be available as soon as you get your phone

      • hum, sounds great! but with LTE shouldn’t it be a little diferent? still 15 digits?

  • NotJustin

    But will your current sim card fit in the new iPhone 5?

    • I have the same question, can we just cut our current sims?

      • no, the apple site states your current 4S sims will not fit/work in the new phone

      • Yes because they are too big and too thick. But that’s nothing a pair of scissors and sandpaper can’t fix. Wait for it.

      • yeah, I was thinkin if it still gprs, 2g, 3g and 3g+ just triming those sim card in the right shape should still work, right? I just cut a sim for my customer, but it needed a little bit more of trimming, so I started wandering, I had to sand a little cut the sides to fit right on the contacts on the board

      • let’s wait to try :0

  • Sounds solid except that iPhone 5 uses nano sim so you can’t just put your 4S sim in it.

  • NotJustin

    Nano-SIM
    iPhone 5 is not compatible with existing micro-SIM cards.

    • I will show you how I do it soon.

      • surely you can just trim the edges down, like converting a Mini SIM to a Micro one, only closer still to the chip…

      • No, I don’t believe you can cut it down. You’d be cutting into vital connectors. But I could be wrong. Jeff is the man.

      • gunther801

        You will have to cut it and make it thinner, presumably sanding it. But it is possible…

      • Blake

        Did you get a chance to look at the video of the iDB app I put together Jeff?

      • This app would be great specially if it has push notifications!

      • Blake

        They wont even look at it 🙁

      • Blake

        watch?v=iN6FtxNvyUk

  • Kok Hean

    $36 activation fee?!

  • You can’t just cut your sim. Nano sim is also 15% thinner. So even if you cut it down to the correct shape, it won’t fit because it’s too thick.

  • kumar714

    no need to cut sim’s people, just go to nearest att store they give you free nano sim

  • The Great Konja

    I am not going to lie, I went to Verizon’s online website, started a new line and paid 300 ill cancel after my 14 days then i will pay the ETF which is 350 saving myself 100 bucks off full retail which is $750.

  • chjode

    I tried to do the same, Jeff, but AT&T couldn’t figure out how to let me purchase a full-price iPhone without adding a new line of service. I could upgrade my current phone for $200 (w/ 2-year contract) or start a new line and get the iPhone at full price, but not simply buy the iPhone without adding a new line. I even called in to AT&T and the customer rep couldn’t do it. I’ll try at the local AT&T store.

  • Joao

    I bought an out of contract iPhone 4s last year (cause there was no factory unlocked versions yet), then I put a T Mobile sim card and it unlocked automatically. The attendant at the Apple Store told me that this happened cause the iPhones from At & T were coming “pre factory unlocked”.
    Do u think this is going to happen with the iPhone 5?

  • englishmike

    AT&T are complete dicks!

    They promote a “non Commitment” phone but to buy it you must make a commitment! JOKE!

  • I always purchase off contract and directly from Apple. Then when my upgrade comes around, it’s an extra bonus and quick flip on Craigslist to recoup my expensive off-contract purchase!

  • Jerry

    If you do this once you receive the phone AT&T won’t charge you a month in advance like they usually do? That’s all I need to know before I go ahead with your route Jeff let me know!

  • Guest

    Will AT&T bill you for the first month in advance like they usually do? I need to know because if not I am going to do this exact thing. Let me know jeff thanks

  • JerseyD

    AT&T usually gives you new sim cards for free

  • Will Walker

    Jeff, that’s exactly what I did back in July when I purchased my Galaxy S III. I had it unlocked a few weeks ago and like you, next year I will be in great shape for the next iPhone.

  • Maru_The_Cat

    Jeff,

    I don’t see an advantage of having an unlocked phone if you are an AT&T customer and plan to upgrade to a new iPhone every year. The cost savings are minimal. You also are still locked into your current iPhone 4S contract. So you are not really out of contract. And since you will upgrading when the new iPhone 5S comes out the contract begins again……Am I missing something, thanks.

  • steve

    I just talk to ATT to confirm this. Yes you will not charged if you cancel the new phone in 30 days and did not use the new sim at all.

  • Jerry

    so I went ahead and did this method. thank you jeff! ill be waiting for your instructions on how to cut down the sim card

  • Starting in december the iphone 5 will be fully functional on LTE on T-Mobile
    Unlimited truly for way cheaper then any other carrier let the war begin!

    • How do you figure? TMOBILE still hasn’t even finished the refarming of thier 3G network to work with the iPhone? That would be great, but don’t hold your breathe. I gave up on TMO last year, getting only Edge was getting unbearable.

  • Emre SUMENGEN

    Will cutting a micro-sim work? That seems to be the important question for me now 🙂

  • I bought an off contract iPhone 5 with Verizon.

  • Titombg

    Hey Jeff, did you get your off contract iphone and did it come unlocked?