How to Save Thousands of Dollars on Your iPhone Bill

Apple has manufactured the telecom’s dream: a phone that will rack up a massive bill all too easily.

To begin with, we’ve got a phone that basically sells itself on its ability to surf the Internet and download data. If you’re with AT&T, you’re all good and dandy on that point (unless you’re on international roaming), but for most of us throughout the world—including the Australian company my phone is with, Optus—the included data is a joke and the price per kilobyte is exorbitant.

Then there are text messages, which are arguably more commonly sent and received than phone calls. The iPhone’s user interface for text messages encourages chat-like conversation, shooting the number of back-and-forth “LOLs” and other noise sky-high. I hear that in the US that’s 15 cents a message (25 cents here).

If the average number of text messages sent per user in a month is 188* (source) and we conservatively double that number for iPhone users, we have $56.40 on top of the bill.

$56.40 for a few bursts of text.

*If that figure worries you, just be glad you’re not paying the bill for a Korean teenager (unless you are): apparently they send an average of 60.1 messages a day.

And finally, we have phone calls. The interface is pretty slick and intuitive, so it’s not at all a hassle to whip out your phone and make a call. But on the iPhone, it’s also very easy to fall into some bill-boosting habits that simply aren’t readily accessible on most other phones. For instance, it makes holding your current call to answer another one a very easy and convenient option. Two calls ticking away at once, and you’re not even using one. Ouch.

It’s a great phone, but it sure can run up your bill.

Now for the “Glass Half-Full” Perspective

But it can also significantly reduce the size of your phone bill in ways many other phones can’t if you’re smart about it. If you’re an iPhone user with a big bill problem, let’s look at paring that down.

In this article we’ll look at three problem areas: calls, text and data.

Cutting Call Costs with VoIP

While there is no official Skype app for the iPhone (I’m hanging for one, but doubt they’d let it into the store), Fring is an alternative that lets you make VoIP calls that are much cheaper than regular cell call rates. Fring is an app, not a VoIP network, and serves as a mobile channel for:

• SkypeOut/SkypeIn
• SIPNET
• EuteliaVoIP
• VoIPVoIP
• VoIPTalk

For most people, the SkypeOut/In option will be the most popular option. It’s certainly not as good as having free Skype-to-Skype, but still makes calling people a lot cheaper. You’ll need to:

1. Jailbreak your iPhone. There are extensive instructions on this here, and don’t worry—it’s not as hard and intimidating as it seems. I did it for the first time the other day when I eBayed a first-gen for my wife, and it took about 25 minutes.
2. Download the app using the Fring repository in Installer, which you can do by following these instructions.
3. If you don’t already have a Skype account, get one. If you do, top up your credit.

I’d much rather an option that lets you do free Skype-to-Skype chat, but we’ll probably have to wait until hell freezes over.

If all you want is SkypeOut, there’s a web-based app called IM+ for Skype. It certainly is less of a hassle than installing an app, and has no SkypeIn, but it’s an option.

Cutting Message Costs with Instant Messengers

There are a variety of instant messengers out there and regardless of whether you’re using wifi or data, this is definitely the cheaper option. Of course, if you’re in America it’s the cheapest option no matter what because of the unlimited data (I’m jealous, if you hadn’t noticed).

While I’ve noticed that many Skype users tend to open up the app only when they need to have a voice conversation (I’m one of those guys that keeps it open all the time), mainstream instant messengers are usually a different story. There are two main “camps” of instant messenging networks and each is covered by a different app.

Palringo

The first camp is the MSN Messenger—er, sorry, Windows Live Messenger—and Yahoo! Messenger crowd. The demographic is usually pretty young, but I’ve met 80 year olds through these networks too, so who am I to generalize? If you’re an MSN/Yahoo user, this is the one for you, though it also supports AIM, Google Talk, Gadu Gadu, ICQ (people still use that?) and Jabber. Get it here (iTunes Store link).

AIM

I’ve noticed this “second camp” of IM users seems to circle around AIM and .Mac (now MobileMe), probably because they’re all integrated in iChat. If you’re an iChat user, you’ll be able to talk with your friends from the AIM network, MobileMe, .Mac, and ICQ using the AIM iPhone app. Palringo does support AIM, but iChat users will have a mixture of AIM and MobileMe/.Mac users in their contact list. Get it here (iTunes Store link).

Smart Data Usage Practices

Note: if you’re on an AT&T unlimited data plan, this section only applies to you if you’re roaming.

The iPhone will always look for wifi first and cellular data networks second. Unfortunately, one of the common bits of advice to save battery life on the iPhone is to turn off the setting Ask to Join Networks, which means your phone will no longer actively look for new wifi networks to join.

If there’s a wifi network where you are and you can’t see it because of this setting, you might be wasting money on cellular data. So decide what you want more: longer battery life or a shorter bill, and then decide whether or not this setting should be off.

Another tip for saving battery life that actually does save data usage is turning 3G off. Of course your phone will just jump onto EDGE or GPRS, but since those networks are slower it takes longer to rack up the same data charges, meaning that your frustration will be mixed with a nice dose of frugal satisfaction.

If you travel overseas frequently, make sure you go into Settings > General > Network and switch off Data Roaming. Thankfully Apple included this feature in the 2.0 software—people have racked up thousands and thousands of dollars in data charges while travelling simply because this feature was lacking in firmware 1.0.

Finally, keep a close eye on your usage (Settings > General > Usage). Knowing how much you are using with your current habits is essential to making better choices in the future.

Enjoy your (hopefully) much shorter bill!