What are the differences between the service plans offered by AT&T and Verizon for the iPhone 4? What is the total cost of ownership on each carrier? Which is the best deal for me?

Please note that this Q&A compares the plans offered by AT&T and Verizon at the time the iPhone 4 (CDMA) first shipped on February 10, 2011. Plans may have changed since that time.

It is first important to note that although AT&T and Verizon both offer service for the iPhone 4, these iPhone 4 models -- the iPhone 4 (AT&T/GSM) and iPhone 4 (Verizon/CDMA), are compatible with the AT&T and Verizon networks, respectively -- but neither can be used on the other carrier's network. Consequently, an existing AT&T user cannot switch to Verizon without also purchasing a new phone and possibly paying a potentially substantial early termination fee if under contract, as well.

However, for one purchasing an iPhone 4 for the first time or at a convenient time to consider upgrading to a new mobile phone, it is worth evaluating the service plans provided by both companies in the US. There also are some significant performance differences and feature differences between the iPhone 4 models, and these other differences are well worth reviewing in addition to service plans.

The price for the iPhone 4 on both carriers essentially is the same. AT&T offers the GSM version with 16 GB or 32 GB of storage for US$199 and US$299, respectively. Verizon offers the CDMA version with 16 GB or 32 GB of storage for US$199.99 and US$299.99 (Apple sells the Verizon phone for 99 cents less). Both carriers require a two-year contract for these prices, available only for new and "qualified" customers.

The least expensive realistic two-year cost of ownership numbers for an iPhone 4 on both carriers -- 16 GB of capacity -- and the minimum required voice and data plans (and the minimum text messaging option to not pay 20 cents per text) are:

§ AT&T also includes 5000 night and weekend minutes whereas Verizon charges 45 cents for additional minutes on this plan.

For intermediate users -- interested in an iPhone 4 with 32 GB of storage, 900 minutes of daytime voice use, at least 2 GB of data, and at least 500 monthly text messages -- the two year cost of ownership options are:

§ AT&T offers unlimited night and weekend minutes with this plan whereas Verizon charges 40 cents a minute for additional voice minutes. However, Verizon does allow unlimited text messages to other Verizon customers at no additional charge.

For heavy users -- interested in unlimited voice, at least 4 GB of monthly data, unlimited text messaging, and Internet tethering/hotspot usage -- the two-year cost of ownership is:

§ AT&T offers 4 GB of data per month with additional data billed at US$10 per GB. Verizon, on the other hand, offers "unlimited" data on the iPhone, but charges US$20 per GB after 2 GB on the mobile hotspot (and even counts data downloaded on the iPhone against your monthly data allocation when using it as a mobile hotspot).

* These are the least expensive prices for new customers and upgrade eligible customers.

† No prices include taxes or other applicable fees, which can be quite substantial.

Those hoping that an iPhone 4 on Verizon would be cheaper no doubt are disappointed to see that it is actually more expensive for most users. Taking the total cost of ownership into consideration, it is clear that the majority of the cost is tied to the plan rather than the device itself.

Ultimately, though, light users -- or those who talk a fair amount but use a small amount of data -- likely do better with AT&T and heavier users -- or those who don't talk a lot but use a lot of data (and won't use the personal hotspot capability often) -- are better off with Verizon. Verizon also has the reputation for being more reliable, but data is slower on Verizon, and this is worth taking into consideration as well.