T-Mobile Frees U.S. Customers of Subsidies, Provides Appealing Flexibility, Price
March 25, 2013 1:58 PM
comment(s) - last by
Downsides include up-front costs and sometimes patchy network
T-Mobile USA -- invigorated by a
merger with MetroPCS
Communications Inc. (
), courtesy of the partial acquisition of MetroPCS by parent Deutsche Telekom AG's (
) -- is looking to
rock the U.S. cellular market
by switching to a
I. The Rollout
Traditionally smartphones in the U.S. cost anywhere from nothing (free) to a couple hundred dollars. The true cost of these smartphone devices can be $600 USD or more. But carriers have transferred that cost to customers over the life of the plan via higher service bills.
It's long seemed a clever psychological gambit; tricking customers into thinking they're paying less. But it's not one that everyone is happy with. Of late opposition to the subsidy model has been mounting. And T-Mobile USA is
leading the critics
you'll be able to buy an unsubsidized handset from the carrier or elsewhere and then build a service package buffet-style that works for you.
T-Mobile rolls out its new unsubsidized pricing scheme today.
[Image Source: T-Mobile USA via TMONews]
Pricing varies based on the amount of data you select (500 MB, 2 GB, 4 GB, 6 GB, 8 GB, 10 GB, 12 GB, and unlimited options are possible). For the 500 MB option you get that, plus unlimited talk and text for $50 USD/month. For $20 USD you get "unlimited" data (no overages), while for each $10 USD more, you get 2 GB of unthrottled data.
II. What Do You Gain? What Do You Lose?
So how does this stack up to other carriers? You have to remember; you're not getting your handset subsidized.
With that in mind let's consider a 1 GB data contract with unlimited talk and text. On the
nation's largest network
-- Verizon Communications Inc. (
) and Vodafone Group Plc.'s (
) joint-subsidiary Verizon Wireless -- you get this for $90 USD/month on a two-year contract. The same contract is $60 USD/month on T-Mobile. So you save $720 USD over the course of the two-year contract by picking T-Mobile.
Most premium smartphones on T-Mobile fall in the $400-500 USD range, so even with the cost of the phone, you'll still come out a couple hundred dollars ahead. Plus T-Mobile USA does offer financing to essentially lessen the blow of paying for your new phone up front. There's (of course) a small fee (interest) involved, but overall it's not as bad as a subsidized plan.
Also recall that T-Mobile subscribers are now "free" and can leave at any time -- versus subsidized contract customers on other networks who face incremental cancellation fee penalties for jumping ship before the contract's 2 years are up.
Buying handsets like the HTC One may be expensive unsubsidized, but T-Mobile's pricing scheme will save you significantly over the course of your contract.
So the upsides are being contract free, saving money, and having a more clear perspective on what you're paying for service versus what you're paying for hardware.
About the only downsides are that you do have to pay up-front, and more importantly that T-Mobile's HSPA+ 3.5G network leaves something to be desired in terms of coverage and speed. T-Mobile has promised
an aggressive LTE rollout
this year to catch up with rivals Verizon, Sprint Nextel Corp. (
), and AT&T, Inc. (
), but it's premature to assume it will achieve its ambitious goals for that push.
Regardless, if you want the best contract price-wise T-Mobile is the place to be (or possibly one of Sprint's various pre-paid brands). With handsets like the
by HTC Corp. (
the Galaxy S IV
by Samsung Electronics Comp., Ltd (
) incoming, T-Mobile may see a strong pickup if it can properly advertise just how good a deal it's giving U.S. customers.
This article is over a month old, voting and posting comments is disabled
3/25/2013 3:04:27 PM
Well, you can't upgrade your phone and keep unlimited data. You have to pay full price or buy a used phone and still pay the contract/subsidized monthly price. I found a way around it because I am on a business share plan. I took someone else's upgrade, activated it briefly on their number then switched the phone to my number after it was activated. This temporarily deactivated their current phone during the process. This means that my line will be eligible for an upgrade but I can't use it and neither can anyone else. They aren't supposed to do that, so I was told. Luckily I have been using the same sales rep at a corporate store for years.
But we recently changed our business plan to a data share plan, so now we have unlimited minutes and text but share a pool of 50GB per month. We average 30GB usage, and they sell data in buckets of 10, 20 or 50 if I'm not mistaken. So we chose 50GB.
3/25/2013 3:31:27 PM
I always buy my phones outright anyway and you have to think ahead about your strategy for upgrading. I keep all of my original boxes, manuals, accessories, receipts, etc. Those things go a long way in getting an excellent price for your used phone. Also, I keep my phone protected at all times (case, screen protector). I always receive top dollar for my phones, especially when I throw in the accessories.
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