Cheap Prepaid Plan for AT&T IPhone from $3.33/mo

If you have an AT&T - or factory unlocked - IPhone, then Airvoice Wireless offers an extremely cheap prepaid option. If you use a lot of cellular data, then this is probably not the right plan for you. But if you are almost always covered by Wifi, and only need occasional cellular data, then this could save you a lot of money.

First, you don't need to unlock your AT&T IPhone. Airvoice Wireless is an AT&T MVNO - which means they are reselling the AT&T service. Anywhere that you were previously covered by AT&T you will now get reception with Airvoice Wireless. So here's the steps you need to follow

Buy an Airvoice Wireless SIM for your iPhone

Airvoice are currently only offering regular size SIM cards. So if, like me, you need a MicroSIM for your iPhone 4S, then you have two choices. Either buy a SIM card cutter and cut it down yourself, or buy one already precut. If you don't expect to be cutting down a lot of SIM cards, then it's probably cheaper to buy one precut. You can find them on ebay and amazon. I found one on Amazon for the same price as the regular size one on the Airvoice web site - $4.99.

Install SIM

Pop out the SIM tray from your iPhone using the provided tool, or a paperclip. Remove the existing SIM and install the new one. Your iPhone will warn you that it has "no sim" and this can take a few minutes to go away. It can also be another few minutes before your phone will pickup the Airvoice network. But eventually it will say "AIRVOIC..."

Activate SIM

Unless there are different instructions provided with the SIM you purchased, this basically involves going to the Airvoice Wireless website and clicking "New Activation". It will lead you through a set of steps where you will enter the number off the SIM (also on the card that the SIM came in) and some other registration information. Make sure to select the prepaid/pay-as-you-go option for your plan. At the end of this process you will have a new phone number. You can also transfer a number, but this will take longer.

Add Air Time

Now you need to purchase some airtime. This starts at $10, which is an expensive way to try out the service. Go back to the Airvoice Wireless website and click "Shop > Buy Airtime > Purchase Online". You will enter your new phone number, and then buy airtime with your credit card. Once this is done you are now ready to make calls on your phone.

Configure iPhone for Data

Although your iPhone will immediately work for calling and texting, you will need to do one more simple step before you can use cellular data. While your iPhone is connected to wifi, visit in Safari and click "Create APN". Select your Country, and in the Carrier field select Airvoice and click "Create APN'. This will open the profile settings screen on your phone and prompt you to install a new profile. Click Install. You should now be able to use cellular data on your phone.

[Update: I've heard from someone that was switching to AirVoice that they had to call support and have data enabled, and were told that it was not enabled by default]

Pros and Cons

As I mentioned above, if you use a lot of cellular data, then this is almost certainly not the plan for you. At $0.33/MB, it would be prohibitively expensive if your average monthly usage is 200MB+ and there would be much more reasonably priced plans - such as H20 or StraightTalk. But if you just want cellular data to occasionally read an email, look at a map, or check-in on foursquare, then it's a great plan.

The way I use this is to keep cellular data turned off most of the time. This can be done under Settings > General > Cellular. When I want to check-in on FourSquare while out and about, I switch it back on, do the checkin and then switch it off. After you complete a call or finish using some data, a screen pops up on your iPhone telling you how much it cost. In the case of performing a FourSquare check-in it usually costs me $0.01.

The airtime you buy with $10 has a 3 month expiration. As long as you add airtime before the end of this 3 month period, then your airtime rolls over, and it extends the expiration. So if you make minimal cellular calls (e.g. you use VOIP from your phone with Skype or MagicJack while on Wifi) and use minimal cellular data (i.e. you use Wifi), then it could be costing you as little as $3.33/mo.