Breaking down T-Mobile's break with contract phone plans
Last month, cell phone carrier T-Mobile introduced a mobile smartphone plan that is a radical departure from what its competitors deliver a plan with no two-year contract.
For years, mobile phone companies have wooed users into two-year contracts by offering huge discounts on the purchase of an otherwise expensive smartphone. The contract helps the company recoup the cost of the subsidy on the phone. Get an iPhone with a contract, for example, and the phone costs $199. Buy one without a contract, and it will cost more than $600. Or if you buy it under contract and then break the commitment by leaving early, expect to pay a hefty fine for early termination.
Enter T-Mobile with its Simple Choice Plan, a way to have cellphone service without being tied down to a contract. Ostensibly, you could start the service, and if it's not to your liking cancel it the next month (although all of the major wireless carriers offer the same opportunity to pay month-to-month if you bring in your own phone).
You can still pay the company full price for a new smartphone, or you can purchase one with money down and a monthly payment over two years.
So, how does T-Mobile's plan stack up to the other carriers? Turns out that T-Mobile's new plans generally are the cheapest. Here's a breakdown of fairly equitable smartphone plans with voice and data, among T-Mobile and the other three major carriers, Sprint, Verizon and AT&T.
Cheapest plan • Unlimited voice and texting, plus 500 megabytes of data, for $50 per month.
Data • To add 2 gigabytes more of data, for a total of 2.5 gigabytes, add $10 per month to the cost of the plan for each line. To go to unlimited data per month, add $20 per month per line.
Multiple lines • For two phones with unlimited voice and texting and 500 megabytes of data, the total cost is $80 per month. Each additional line is $10 more.
Cost per month • For one smartphone with 2.5 gigabytes of data per month, it is $60 per month.
Two-year cost • To buy a new Samsung Galaxy S3 from T-Mobile and the plan with 2.5 gigabytes per month, the total cost over two years would be $1,989.99. (That's $69.99 down and $20 per month for 24 months for the phone plus the cost of the plan).
Notes • Clearly this plan is best suited for someone who already owns a GSM network-compatible phone that works with T-Mobile. If you bring in your own phone, subtract the cost of $69.99 down plus $20 per month for two years to pay for the Samsung Galaxy S3.
Also consider that T-Mobile's so-called 4G data network which is more like 3.5G is slower than AT&T's and Verizon's 4G LTE networks. T-Mobile's 4G LTE network is not yet available in Utah.
Cheapest plan • Unlimited voice and texting and 1 gigabyte of data for $90 per month.
Data • If you want more data, add $10 per month each to go to 2 gigabytes, then 4, then 6 or 8. There is no unlimited data plan.
Multiple lines • For two phones and 1 gigabyte of data, the cost is $130 per month. Add $40 to the plan per month for each additional smartphone. All phones can use the shared pool of data.
Cost per month • For one smartphone with 2 gigabytes of data per month, the cost is $100 per month.
Two-year cost • To buy a new Samsung Galaxy S3 and the plan with 2 gigabytes per month, the cost over two years would be $2,499.99.
Cheapest plan • Unlimited voice and texting and 1 gigabyte of data for $85 per month.
Data • For more data, add $30 per month for 4 gigabytes, another $50 for 6 gigabytes and another $80 for 10 gigabytes. There is no unlimited data plan.
Multiple lines • For two phones with 1 gigabyte of data to share, the cost is $130 per month (adding each additional phone can cost an extra $30 to $45 per month, depending on how much data you buy. The bigger pool of data, the less each phone costs per month).
Cost per month • For one smartphone with 1 gigabyte of data, the cost is $85 per month.
Two-year cost • To buy a new Samsung Galaxy S3 and the plan with 1 gigabyte of data per month, the cost over two years would be $2,379.99.
Notes • AT&T's pricing is the most complicated but also the most flexible because the company offers more of a variety plans, depending on your usage. But the plans listed above were most comparable with what Verizon and T-Mobile offer.
Cheapest plan • Unlimited voice, texting and data for $109.99 per month. (This is the cheapest plan that offers unlimited voice and texting).
Data • There is only unlimited data there are no tiered data plans. The cost of each plan includes unlimited data.
Multiple lines • For two phones with unlimited data, the cost is $209.98 per month. Add $99.99 for each phone.
Cost per month • For one smartphone with unlimited data, the cost is $109.99 per month.
Two-year cost • To buy a new Samsung Galaxy S3 and a plan with unlimited voice, text and data, the cost over two years would be $2,739.75.
Notes • Although Sprint has higher prices in these examples, keep in mind those are for unlimited data. But Sprint also offers lower-priced tiers in which you have limited voice minutes to landline phones that would lower the cost. Be aware that Sprint also does not have a 4G LTE data network up and running in Utah.
Google+: +Vincent Horiuchi