No Contract smartphone may lure 1st time users

The economy is still tight, so for many U.S. mobile phone users a key obstacle to upgrading to a smart phone is price.

It's not just a matter of the upfront cost for the device. If you're feeling insecure about your future earnings stability, it might seem reckless to commit to 2 years of a monthly bill of $90 or more, plus the risk of surprise  charges for overages of various kinds, and hefty early extinction fees if you make a decision to cancel.

This is why no contract discount wireless carriers such as MetroPCS have been doing a brisk business, mainly in non smart feature phones.

The Indulge costs $399 to buy - but there is no agreement necessary, and plans cost $50/month (for up to 1 gigabyte of data) or $60/month (unlimited data). This combination of device class, network speed, affordable bills and flexibility to switch at will could lure many first-time smart phone customers.

The Indulge is a slider-style phone with a full qwerty keyboard and 3.5-inch touchscreen. It runs Android 2.2 ("Froyo") and includes

4-gigabyte memory card, but it will take up to a 32-gigabyte micro SD card.

MetroPCS has LTE networks in 13 U.S. markets: Atlanta; Boston; Dallas/Fort Worth; Detroit; North and South Florida; Las Vegas; Los Angeles; Bakersfield, California; New York; Philadelphia; Sacramento, California; and San Francisco. Tampa, Florida, is coming soon.

Tony Lau, MetroPCS director of handset product management, explained why 4G is critical to the carrier's strategy:

"I think it is through necessity, to be quite honest. One of the reasons we're transitioning to LTE is because of capacity and because that's where the industry is heading. Our core is 1xRT and we haven't really invested in EV-DO. There's an increase in consumer demand. ...We're trying as fast as we can to transition our handset profile and our network."

So in effect, the MetroPCS strategy is to leapfrog straight into 4G network, while the main carriers are having to figure out how to upgrade from much larger existing 3G networks -- and pay for it, mainly by locking customers into 2 year contracts. This approach could help MetroPCS keep its plan costs low and terms flexible.

MetroPCS isn't the only option to get a no-contract smart phone at a low monthly cost.

 This phone costs is  very much more than the Samsung Indulge (close to $600). However, it will run the newest version of Android  and you'll still have a $60/month phone bill, with no contract or early termination fees.

WORLD TECHNOLOGY {WT}