TextNow Offers Contract-Free Smartphone Service Starting at $19

TextNow has transitioned from being a free app to the "world's first all-IP mobile operator," offering likely the cheapest deal around.

Enflick, the company behind TextNow—the free Android and iOS app that gives users a phone number, unlimited texting and picture messaging, and free calling and voicemail—has moved into the phone business.

On Aug. 6, Enflick introduced a TextNow phone service based on the app, calling it the "world's first all-IP mobile operator."

The contract-free, monthly service rates start at $18.99 for 500MB of data, 750 roll-over minutes, and unlimited and incoming calls. That plan, borrowing from the Starbucks parlance, is Tall.

The Grande is $26.99 for 1GB of data, 1,250 roll-over minutes, and unlimited texting and incoming calls, and the Venti is $39.99 for 2GB of data, 2,000 roll-over minutes, and unlimited texting and incoming calls.

The IP-based service relies on Sprint's 3G and 4G networks where WiFi isn't available.

The TextNow mobile phone service—which for now is Android-compatible only—follows Enflick's release of its MiFi solution for wireless broadband connectivity "from absolutely any location," the company said in a statement.

With the introduction of the mobile phone service, "Enflick now offers a complete family of affordable connectivity solutions ... all without the high price tag that comes with traditional carrier offerings," said the statement.

TextNow is for now offering the service with either the Nexus S, for $89.99, or the Samsung Galaxy S II for $199.99. Both, again, without a service contract (though you can't buy the phones without the monthly service).

The plans work internationally over WiFi (no dice for cellular), and the company doesn't believe in overage charges. If you're nearing your limit, you'll be prompted to upgrade to the next plan before you do. Should you not accept the offer and go over, service will be suspended until the next billing cycle. During a service suspension, the phone can still be used over WiFi.

"From Day One, our biggest priority has been to make smartphone service better and more affordable for everyone," Derek Ting, co-founder and CEO of Enflick, said in the statement.

"The announcement of TextNow mobile phone service—combined with our recent launch of MiFi—marks a big milestone toward accomplishing this mission of making it affordable for every person to have a cell phone in his or her pocket."

Contract-Free Wireless Market

The contract-free wireless market has taken off and become increasingly mainstream. On May 1, T-Mobile completed its purchase of prepaid carrier MetroPCS, and months earlier announced that it, too, was leaving the two-year-contract business model.

Every major carrier now offers prepaid options and most also back a prepaid, contract-free brand. Sprint has at least four.

Sprint said during its most recent earnings call that while its postpaid service revenue was up 5 percent year over year, its prepaid service revenue was up 20 percent.

AT&T also recently introduced a prepaid service and made a bid to acquire Leap Wireless—a move that AT&T Mobility CEO Ralph de la Vega has said is designed to "accelerate" AT&T's entry into the prepaid segment more quickly than it could on its own.

"I think it's a good brand and will leverage our distribution, and that will fuel our entry in nationwide prepaid offerings," he said during AT&T's July 23 earnings call.