How to Save $154 on an Unlocked iPhone 5s (UPDATED)

(Editor’s Note: Clearly there is some confusion around the author’s use of the word “compatible” in this post, and I’ve made some changes below in bold to try to clarify. The commenters are correct about the post being unclear about LTE support, as well, at least based on Apple’s iPhone LTE page.)

Looking for a bargain on an unlocked Apple iPhone 5s? Virgin Mobile, a subsidiary of Sprint that uses its voice and data network, has (for now) the best price on the market for unlocked iPhones: $495 for the 16GB version. Apple, AT&T and T-Mobile charge $649. (Here are details of the offer.)

Buying an unlocked phone means that you are not chained to the usual two-year wireless contract and can use the phone on another carrier – if the networks are compatible.

The $495 iPhones sold by Virgin Mobile are compatible with Verizon’s network, including its fast LTE connections, so you can sign with either carrier, pick a plan, and you’re in business. (Be aware that you might not get LTE support, though.) The iPhone won’t, however, work on AT&T’s or T-Mobile’s networks. That’s because Sprint and Verizon use a technology called CDMA, while AT&T and T-Mobile utilize GSM technology. You can also, of course, stay with Virgin Mobile, which offers an unlimited data and text plan (along with 300 minutes of talk) for $35 a month.

Although the phone is also likely compatible with Sprint’s network, a spokesman for that carrier said “right now a Virgin phone cannot be used on Sprint.” Although Sprint also has no-contract options, if you want an unlocked iOS phone your only option is an 8GB iPhone 4. It does, of course, sell new models – with two-year contracts.

Virgin is selling the unlocked 32GB model of the iPhone 5s for $585 ($164 less than other carriers), and the 64GB edition for $675 (compared to $849 at other carriers). The unlocked 16GB iPhone 5C is selling for $405 and the 32GB flavor for $495, well below what other carriers are charging.

Taking a phone from one carrier to another can be tricky and even people who work for those companies can be confused. Although a Verizon employee at a retail store said he was “positive” that a Virgin Mobile phone wouldn’t work on his company’s network, Verizon spokesman Albert Aydin assured me that it would.  According to Apple’s iPhone LTE page, the Virgin iPhone 5s does not support Verizon LTE, but it may support older, slower data or voice technologies. It’s worth noting, though, that Verizon is the most expensive of the four major wireless carriers.

Despite the complications, the no-contract options are representative of the changes that are finally shaking up the wireless industry and making life better for consumers. Earlier this month, AT&T offered T-Mobile customers up to $450 in credits to jump ship. T-Mobile quickly upped the ante, saying it will pay customers of its three major rivals – AT&T, Sprint and Verizon – as much as $650 per line (in credits) to sign up.

T-Mobile has ended all contracts and early termination fees, moves that put pressure on its larger rivals.

Image: Christian Science Monitor

mage: Christian Science Monitor

mage: Christian Science Monitor