T-Mobile introduces contract-free plans, but will you switch?
Now as far as the plans go, T-Mobile is offering unlimited talk, text, web, and 500MB of "high-speed data" for $50/month. A second line is $30, and each line after that is $10. T-Mobile is also offering 2GB of high-speed data for $10 and unlimited high-speed data for $20. One thing to note with these plans are that you can get tethering but only the FIRST 500MB of tethered data is at high-speed regardless of the plan choice. More on that is here: www.t-mobile.com/cell-phone-plans and you can use a little calculator tool here: www.t-mobile.com/shop/plans/individual-plans.aspx
There are a lot of different ways you can mess with the numbers here, but I'll stick with the iPhone 5 for ease-of-comparison and look at a single line and a 2-device line with the base options (500MB data) to keep this as clean as possible
$20 device charge (iPhone cost per month)
$70 total a month
$40 device charge (same as above)
$69 plan (unlimited minutes)
$20 text (unlimited messages)
$20 (300Mb data)
$109 total a month
Family plan (using the plan that is not data-sharing since it's still offered)
$119 plan (unlimited minutes)
$40 data (300mb at $20 per phone)
$30 text (unlimited text)
$189 total a month and no tethering included
$40 device charge
$50 for the plan (unlimited text, voice and 1GB data)
$90 total a month
$80 device charge ($40 per device)
$50 for the plan (same as above)
$130 total a month
At first glance, there isn't much to be saved when you look at these plans compared to Verizon, especially if you factor in coverage and speed. but if you remove the $20 device charge, the cost savings can add up. Over a year you're talking about $480 for a single line and $600 for an account with two lines.
Keep in mind a huge benefit of this is no contract, so at any point you're free to upgrade to a new device without the issue of paying full price up front -- though if you drop your coverage, you're still liable for the full cost of the phone. T-Mobile is even allowing you to trade the device in for "fair market credit" (www.engadget.com/2013/03/26/t-mobile-if-you-cancel...). Oh, and after the device is paid off you can also unlock it! (www.engadget.com/2013/03/26/t-mobile-handsets-will...).
There is certainly a lot to digest with the new offering and it will be tempting for current subscribers to abandon their contract-laden plans. However, there is the issue of early termination fees. Let's also not forget that T-Mobile is doing this assuming the fair majority of the consumer market hates the current contract market, when I'd wager most just continue to operate under contracts because it has become so routine.
Edit: just came across some info about paying off your phone early: support.t-mobile.com/docs/DOC-1674
- It's assuming unlimited voice for all plans, of which I would use something like 50 minutes per month. That would matter to me, as it means cost savings with ATT/VZW.
- I have a discount with ATT that gives me all I need for $50 per month, so... yea. Still, T-Mo looks like a good option for people without any such discounts.
You could bump your $20/month for the iphone up to $40/month and have it paid off in a year. If you did this you could have the latest and greatest phone every year instead of every 2 years on another network, I gotta say, that's tempting.
If it's the former, you could still pay off the device earlier (in installments) by just ignoring the bill you receive and overpaying every month. Much like I do with my car payment (according to my last bill, I owe $0 this month, and my next payment isn't due until late 2014).
If anything, having you pay off the balance in larger installments would be better for them, since their payment plans have no associated %APR or anything. They're just getting more money up front instead of on the back end (time value of money, better cash flow for the company, etc). Unless, of course, early payoffs led to early departures from the company.
Less than $75/month gets me 450 minutes, unlimited text, unlimited data, and insurance on the phone. Granted my price is knocked down due to an old employee discount from a past employer, but it's hard to beat.
Also, T-Mobile isn't available in my area to tempt me. If they were, I'd jump to test their network for a phone not available on Sprint (of which there are a lot).
Also, I really think the contract thing is overblown. Are you suddenly not going to have a smartphone? If you're planning on living overseas soon then it makes sense, otherwise avoiding a contract is like being scared of big brother. Being paranoid for little reason.
The way you compare the AT&T family plan is dumb. Family share makes sense and allowed my family of four smartphones to decrease our bill by $20 and have a total data bucket of 10GB to share. Our total bill is close to what you show for a family plan ($240), though you don't mention how many phones you have on this family plan.
Wake up, T-Mobile will be out of business soon and fear of contracts is overrated.