iPhone on a budget: The AT&T GoPhone PayGo Option

AT&T is facing the end of their SMS lifeline. They're responding with innovations -- of a sort. For my family, their latest move is adding $35 a month to our bill.

So we're innovating too - by migrating away from SMS based texting sooner rather than later.

We're also looking at Paygo alternatives; moving the kids' iPhones off of our family plan. My friend Gordon F explained how it works, but see also a TUAW article of 8/11.

Here's the short version of Gordon's scheme:

1. Move your old number to Google Voice ($20 to Google) if you want to keep it.
2. Start with an AT&T GoPhone plan. You'll need any old AT&T dumbphone, borrow one or dig something out of the closet.
   • Pay As You Go Online
   • AT&T GoPhone - Prepaid Cell Phones
3. At the AT&T store get a GoPhone SIM in your dumbphone paying the minimal fee for the 10 cents/min voice plan.
4. Buy a $100 airtime card. This card has a 1 year expiration time.
5. If you want data, buy a $25 500 MB data package. This normally expires in 1 month, but then each month buy a 10MB $5/month on an automatic purchase plan. This causes the data package to rollover. Over two years total cost is $145 for 740MB.
6. If you want texting pay $5/month for 200 messages.

I've yet to way the costs of this plan against keeping the kids on our family plan and dumping SMS in favor of data messaging. I think the total costs will be close.

Update 111111: Must be in the air. Lifehacker did a story on this a couple of days after my post. I found some mistakes there and nothing new, but it's clear there's demand for data-free iPhones.