jvc21, I switched from Verizon Wireless to Virgin Mobile about a year ago now. I was using a Samsung Fascinate (Galaxy S) on Verizon Wireless which was free to me at the time. My plan included 450 minutes, unlimited text, and unlimited data. With taxes and fees, my monthly charges on Verizon were in the low $80's per month.
I switched to Virgin Mobile and bought an HTC Wildfire S handset outright for $149.99. I use the $35 plan with Virgin Mobile which gets me 300 minutes, unlimited text, and unlimited data. I rarely use my minute allowance in a month, so functionally, I'm getting the same plan on Virgin Mobile for less than half what Verizon was charging me.
With the $45/month i'm saving, the handset paid for itself in just over three months. An iPhone 4S would pay for itself in just under a year and three months.
To explain it another way, I could pay $200 to Verizon for an iPhone 4S, then $80 a month for the following two years, which is $2120. I could also pay $650 to Virgin Mobile for the same phone, then $35 a month, which would cost me $1490 for the same two years of service. For people who don't have around $750 in their pocket to buy an iPhone and their first month of service outright, subsidizing through Verizon is the only option. For people who have money in their pocket and want to save money in the long run, a pay-as-you-go plan is not only cheaper but offers greater flexibility in activating and deactivating at any time with no fees.
I plan on picking up the iPhone 4S on Virgin Mobile at the beginning of July when my next bonus check comes from work.