Print 38 comment(s) - last by danjw1.. on Mar 26 at 2:08 PM

Downsides include up-front costs and sometimes patchy network

T-Mobile USA -- invigorated by a merger with MetroPCS Communications Inc. (PCS), courtesy of the partial acquisition of MetroPCS by parent Deutsche Telekom AG's (ETR:DTE) -- is looking to rock the U.S. cellular market by switching to a mostly subsidy-free "UNcarrier" model.

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.

Starting today 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.

Unsubsidized plans
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. (VZ) and Vodafone Group Plc.'s (LON:VOD) 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. (S), and AT&T, Inc. (T), 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 HTC One by HTC Corp. (TPE:2498) and the Galaxy S IV by Samsung Electronics Comp., Ltd (KSC:005930) incoming, T-Mobile may see a strong pickup if it can properly advertise just how good a deal it's giving U.S. customers.

Source: TMONews

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RE: Total BS
By Motoman on 3/25/2013 4:50:17 PM , Rating: 0
You're full of sh1t. I've been on T-Mobile for about a year and a half now.

The very best I ever get in download speed, regardless of where I happen to be at that moment, is about 300k.

I can absolutely, positively GUARANTEE you that that you will *never* see anything north of 20, maybe 30k while throttled. About this there is no doubt. I hit my cap EVERY MONTH, and I know *exactly* what the behavior is.

You, sir, are either horribly misinformed or simply lying.

RE: Total BS
By Motoman on 3/25/2013 4:59:52 PM , Rating: 1
Oh, and as for the inevitable "well then why are you still a T-Mobile customer?"

...we have little choice. We live in the suburbs of a major metropolitan area of ~4 million people. I can be downtown in about 30 minutes. But we're "rural" - make no mistake. We are on 50 acres ourselves, and have 5 other houses as our neighbors close by. We're also 1.5 miles past the point where DSL ends. And there's no cable here. Satellite...don't even get me started. Did that once. Not going to do it again. And the cellular service that has the best reception here? T-Mobile.

So, we're kind of a captive audience.

For the past few months though, I've been trying EVDO Depot for internet. And yes, the website looks maybe not that great, and I've been taking it with a grain of salt myself. But in terms of putting my money where my mouth is, we're really trying to leave T-Mobile. This appears to be our only option at the time.

For $120 a month we get unlimited data without throttling, served over the Sprint network. You'll note that earlier I said that T-Mobile was the only service that has good coverage here...and it is. The Sprint tower is farther away, and frankly it's pretty spotty. But I'm planning on putting up a huge YAGI antenna, or potentially something else this spring to boost our access to the Sprint network, and then (hopefully) everything will be peachy.

Yes, $120 is a painful amount of money to pay for internet every month...but when your only other option is $80 a month for 10Gb, and then ~10k after that...$120 starts to look pretty good.

Note that I'm not even necessarily recommending EVDO a number of ways I'm unimpressed, like the fact that we got used equipment from them for starters...but the fact of the matter is that we simply have no choice.

And then:
This comment is apparently spam and we do not allow spam comments. the f%ck is that spam?

RE: Total BS
By chick0n on 3/25/2013 9:42:18 PM , Rating: 2
you are full of crap, I've been with T-mobile for over 10 YEARS and I have new and old plan.

Never got as slow as you said.

you might as well stfu and go Sprint/AT&T/Verizon and enjoy their rip offs :)

RE: Total BS
By Motoman on 3/25/2013 9:51:56 PM , Rating: 2
You're a liar.


I've confirmed that data rate with T-Mobile themselves on more than one occasion.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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