T-Mobile introduced its new “uncarrier” plans earlier this week, and CEO John Legere wants to make it perfectly clear that T-Mobile doesn’t want to be considered a “typical” carrier anymore. To wit: The carrier is doing away with device subsidies and contracts. You can actually save some cash by switching, too.
Here’s how it works: First, select a phone and decide whether you want to buy it outright or if you want to pay it down across 24 months. This isn’t a subsidized contract, however — for premium phones like the iPhone 5 and HTC One, you’ll pay $20 per month. You can walk away from the actual data plan at any time, but one way or another you still need to pay for the phone.
Here are what T-Mobile’s plans look like: There’s a $50 plan with unlimited text, voice and 500MB of data; a $60 plan that adds 2GB of data (for 2.5GB total) and a “truly unlimited” plan that costs $70 per month. (The unlimited plan caps you out at 500MB of tethered data, however.)
For the sake of consistency, and because AT&T doesn’t offer a 2GB option, let’s compare 4GB of data from Verizon Wireless (most consumers use less than 3GB a month, I’m told), 4GB from AT&T, unlimited data from Sprint and T-Mobile’s unlimited plan.
AT&T will charge you $70 per month, plus the $199 price of a standard high-end phone, plus $40 per month for line access. That’s $2,840 over two years. Verizon, likewise, charges $70 per month for 4GB of data and $40 per month for line access, so you’re paying the same amount. Sprint charges $110 per month for unlimited data, but if you want hotspot tethering (included at no additional cost in AT&T, Verizon and T-Mobile’s plans) you’ll pay an additional $19.99 for 2GB of usage. With a $199 phone and the hotspot option Sprint’s plan comes to $3,320.
Meanwhile, on T-Mobile, you’ll only pay $70 per month for unlimited everything, plus $20 per month for your phone (if you don’t buy it outright). That ends up costing you $2,160, or a savings of $680 over Verizon and AT&T and a savings of $1,160 versus Sprint.
Of course, there are a few things to take into consideration. Your savings will vary depending on family plans or the number of devices on your account. AT&T and Verizon offer buckets of data, which means multiple devices can share that data package for an additional fee per device each month. Likewise, AT&T, Sprint and Verizon have much more expansive 4G LTE networks, while T-Mobile’s is only available in seven markets right now.
To play devil’s advocate, T-Mobile is offering unlimited data at those prices, and I had only added up the cost for AT&T and Verizon’s plans at 4GB. The savings goes up for those carriers as you add more data to the competing plans.
Overall, I applaud T-Mobile’s new plans. I think that anyone looking to save money — especially families — should consider giving the “uncarrier” a fresh look.
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