So, you want a cell phone, but you don't want to go with a particular carrier. You dread the idea of contracts, and you despise the idea of "prepaid" services. That, or you just want to go as inexpensively as possible...like I did. What I did may be considered a bit "extreme" to some, but to those on an "extreme budget", this is the way to go.
First off, you are going to need a smartphone. I am going to use an Android device in this example. Any Android device will do, actually. Whether that be a phone, tablet, or the Samsung Galaxy Player. An iPhone or iPod will do, as well, but in this example we will stick to Android. You will also need a Google Account. If you are using an old Android device, you would have set one up initially anyway, so use that account.
Next, you will need to go to the Google Voice page and get your free phone number. Now, keep in mind when doing this that you will need to have a working phone number to start off. The reason is to ensure that a real person is signing up for this service, and not some random bot. Once that is all set up, you will want to tinker with the settings a bit. I would recommend unchecking your actual phone number/service as to not allow it to ring through to that number, as you will either not be using it, or be turning it off soon.
You may want to check your chat settings through Gmail, as well. Seeing that Google Talk setup is required, you need to go to the "Chat" tab, and select "Enable Outbound Voice Calling". At this point, we are set up for the most part. Once the next couple of steps are completed, you may wish to go back to Google Voice to fine tune the settings for optimal use.
Now, on the Android device, you will need to install two apps. First off, install Google Voice for your device. This is the base application from Google. You will want this as it is your access to Text messaging (SMS only, MMS is not supported "officially"). This will also give you access to your voice mail in a very easy to use method. After this is installed, you will need to install GrooVe IP. I strongly recommend the paid version, but there is a free version worth trying out first.
Now, once both are installed, Google Voice is a very simple method of setting it up. Just follow the prompts. Once you get to the Voice Mail setup, I recommend that you skip it, as it will try to make your old number forward to Google voice. Now that that is done, we need to set up GrooVe IP. Again, this is a manner of selecting the options that best fit your liking.
Now we are at a point that you should have finished tinkering with the settings in Google Voice on the webpage, and the app, along with GrooVe IP's settings. At this point, you will want to connect to WiFi. After doing so, I would recommend that you give a friend or family member a call. GrooVe IP is set up to look identical to your standard dialer, so it will function quite normally. Once you connect to the person you called, you will notice that the quality is better than cellular. I dare say it sounds better than a landline even.
Now, the restrictions you will need to keep in mind. This set up will work only as long as you have a data connection. That being either 3G/4G data services, or WiFi. As you can not get just data on a phone, and you probably want to turn off service, you may still be fine. Larger cities tend to have hotspots virtually everywhere. Because of this, you can save these spots to your phones WiFi settings so it will automatically connect to them when you are in range. In smaller communities, you won't have nearly as many hotspots, but I have found it isn't as bad as you may expect.
If you really want to have connectivity all the time, but you don't want voice service, you could always look into mobile hotspot devices. FreedomPop is a nice option for those living in major metropolitan areas. Netzero is another option. Please check availability in your area first.
I have this method of service going on three different Android phones with three different Google Accounts. I also have it set up on my ASUS Transformer TF101. I use it regularly, and have yet to find a way to justify the need...no, the want for paid service.
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