I recently discovered something interesting. Checking out Aio Wireless, I discovered I could add data-only service to an old iPhone for as low as $15 per month all-in and no contract.
Aio Wireless is the new LTE pre-paid service from AT&T. It's not listed anywhere that it's run by and uses the AT&T network, but this is mentioned in press releases about the service. They offer both recurring and single month services.
Aio Wireless offers a set limit 250MB tablet rate for just $15/month. With additional GB available to add for $10/month. Not a bad deal. To use the Aio service a SIM card will need to be ordered from the site for $9.99 (make sure to order the correct size for the phone or tablet to use). In my test it got to me in just a day.
Once the account is set up and the SIM is registered for the $15/month tablet plan, the SIM will then work in any iOS device that is unlocked and compatible with the AT&T network. Even an iPhone. Voice and SMS won't work, and don't expect it to since this is just a data service. But iMessage will work as well as any other feature that uses the data connection.
The downside, and it's not a big one, is that the service provided for pre-paid cell phone services like this is never first-tier. Meaning it isn't prioritized on the host network like contract services. Aio Wireless specifies that the LTE service is capped at 8MB. Still a great speed, but well below the 30-40Mbps I have seen on AT&T LTE. So data rates will be slower, but still very usable. Especially considering the price.
I'm guessing this little loophole will be closed eventually, but until then it's a great way to give access to an old iPhone or iPad for an extra device for a relative, to use as a hotspot, or to have a device on another network.