T-Mobile took the stage today and very much explained its new plans in layman’s terms. There was a bit of confusion as to how unlocked devices will work and how this new “non-subsidy” approach will work out over the long term. Thankfully we took some pretty good notes and can help you work through them all. Here’s how it works:
Pick Your Plan
T-Mobile has several new plans to choose from, but understanding them is very easy. First, you can either choose from a $50 “unlimited plan” that includes unlimited text, voice and “web” surfing per month. Now make no mistake, web surfing isn’t considered “data” in this case, so you’ll still need to rely on data for downloading videos and music, among other things. This entry-level plan comes with 500MB of “high speed” data. That means you can use 500MB of data per month before you fall back off of LTE or HSPA+ and to a slower network.
If 500MB isn’t enough, and we doubt it is for most of you, you can add an additional 2GB, which means you’re getting a total of 2.5GB of data, for $10 extra per month. If you want truly unlimited data, T-Mobile will charge you an additional $10. All said and done, the most expensive plan is $70 per month. Keep in mind, however, that the final “truly unlimited” plan actually limits your tethering to 500MB per month. There is not a limit on the 2GB or 500GB option.
To make it easier, you can choose between a 500MB unlimited plan for $50, a 2.5GB (2GB + 500GB) plan for $60, or a fully unlimited plan.
Pick Your Device
Now comes what seems like the “tricky” part because T-Mobile is ditching subsidies as we know them. But really it’s very simple. T-Mobile will allow you to purchase a high-end device such as the HTC One, an iPhone 5, the BlackBerry Z10 for just $99 at check-out (T-Mobile has not yet disclosed pricing for the Galaxy S4). You’ll need to pass a credit check, otherwise you’ll have to buy the device at its full cost. If you pass the credit check, you can opt to either buy the phone outright, at which point T-Mobile will unlock it, or you can choose to pay it off over 24 months. No, this isn’t a contract. Basically you’re agreeing to pay either at the beginning of each month (prepaid, you didn’t pass your credit check) or when you’re billed (postpaid, you passed your credit check).
So that means you’ll choose your plan above — $70 at the high end — then pay for your phone in $20 monthly installments each month. That means you’ll be paying a max of $90 per month for a single plan. The good part? You can walk away at any point and simply keep paying down your $20 monthly payment, buy your phone outright or trade-it in and pay the difference in “fair value.”
Ok, so stuff changes a bit if you decide to add additional lines, but it’s very easy to understand. Each additional line with the entry-level 500MB plan is just $10. If you add a line to your unlimited account (the one we went over above) with 2GB of data you’ll pay $100 per month total. If you have two unlimited lines you’ll pay $120 per month, total.
Now a little math: if you’re paying for unlimited data ($70), plus your own phone each month ($20), you’re paying $90. If you have a second line with 500MB of data you’re paying an additional $10 for the new line plus $20 for the new premium phone. That totals out to $120 for two lines with two premium phones, one with a fully unlimited plan and one with a 500MB plan. If you want two unlimited plans with two premium smartphones you’re paying $70 for unlimited, plus $20 for your own phone ($90), plus $50 for the second unlimited line and $20 for the second premium phone. In total, an unlimited bill for two people with two premium phones purchased at $99 each would cost $160. Not terrible.
It might sound complicated, but it’s very simple and you can see the prices on your own on T-Mobile’s site.
How about the iPhone?
T-Mobile will offer the iPhone 4, iPhone 4S and the iPhone 5. The iPhone 5 is the only one that will support the carrier’s 4G LTE network, however, and will always fall back to its still-fast HSPA+ 42Mbps network. You can buy it for $99 and pay down $20 each month, or buy it outright. It’s a unique device from Apple that adds support for AT&T’s LTE network too but only if you’re unlocked! That means, however, that it supports many required bands that haven’t been in other iPhones before — T-Mobile said it worked with Apple to make sure of that. So, again, you can buy the iPhone 5 for $99 which is a steal in any market, and pay it down at $20 per month, or buy it outright at the time of purchase.
Apparently Apple will be phasing out the existing version of the AT&T phone in favor of this new version of the A1428, so that may mean that phones on Ma Bell may include the support for T-Mobile moving forward. Do expect, however, for the feature to be dormant unless you unlock it.
The Gist of it All
The idea behind the new plans is that you’ll save money by not being “screwed” by your carrier. T-Mobile wants you to own your device, and it’s doing exactly that. You don’t have to worry about early termination fees because you can walk away from those aforementioned plans at any time. You just need to settle up your bill with them when it comes to the phone. And honestly, it’s not a bad deal, especially because it’s just $20 per month for a premium phone. It also allows you to upgrade more frequently, because T-Mobile, as I said earlier, is willing to give you a “fair value” price for trading it in.
So what about “unlocking” my device?
T-Mobile fully supports the idea of unlocked devices, but like other carriers it wants you to finish paying for your phone first. Unlike other carriers, however, you don’t have to continue paying your data/voice/text message fees each month. No, indeed you just have to finish paying for your phone. You can do that up front by buying an unlocked device right away (full cost and T-Mobile will give it to you unlocked) or whenever you’re done paying for it. Like other carriers, of course, you can always buy a new device without signing a contract. It’s just that T-Mobile is breaking its payments down between your actual plan and the payments you make for your device.
The biggest thing I took away from the event is what I just wrote above: you’re not buying a plan and a device and signing a contract. You’re agreeing to a plan and paying off the cost of your device over two years. You can choose to walk away from the plan, but you can’t always just walk away from the phone. T-Mobile is a business and ultimately you need to pay the price of the hardware you want to use. Thankfully, however, it’s not hiding the price of a subsidy inside its plans. Put $100 down for your premium device, pay $20 a month for 24 months ($480) and you’re done.
Hopefully this clarifies what was going on today. It’s a great idea for people who are worried they’re paying too much from their wireless bills and prefer to pay a monthly fee for a product they own. Think of it, sort of, as an interest-free way of renting your cable box. You pay for Time Warner service, but you also pay a monthly fee for the box rental. Of course, with T-Mobile, you can keep the box and move elsewhere (if you don’t like the service) and continue paying for the “box” while canceling the service.
We’re pleased with the idea and we very much want to see how consumers adopt the new offering.