New T-Mobile plan not right for everyone
The carrier's new iPhone offer still means a long-term commitment, but it could save you money.
T-Mobile this week rebranded itself as the "uncarrier" by doing away with cellphone contracts. The company also announced it will add the iPhone to its smartphone roster in April.
No contract? Really?
If you're buying the phone from T-Mobile then you are under contract, notes Jordan Crooks of TechCrunch, who called the announcement "a marketing move."
"By tying the contract to your phone and not the service, the carrier instantly differentiates itself from the competition," Crooks says.
One major difference: Once the phone is paid off, your cell bill will drop by $20 per month.
Is that cheaper than competing carriers? Hard to say, since consumers' needs and speeds vary so widely. For every gearhead who needs the latest-generation everything and constantly texts and streams video, there's a tech slowpoke like me still using a 5-year-old flip phone for voice calls only.
Apples to apples?
In a post on Wired.com, Christina Bonnington says the T-Mobile plan is "totally comparable, if not better, than current alternatives." The accompanying chart shows total two-year costs as follows:
- T-Mobile, $1,780
- AT&T, $1,640
- Verizon, $2,120
- Sprint, $2,120
This isn't a straightforward comparison because the four companies' plans vary. For example, AT&T's plan is for 300 MB per month and pay-as-you-go texting versus T-Mobile's 500 MB plan with unlimited texting. If you want the phone just for straight calling, then AT&T would look like a slightly cheaper deal -- except that AT&T charges extra for voice.
T-Mobile's biggest issue is probably not price, but coverage. According to New York Times reporter Brian X. Chen, the company has steadily hemorrhaged customers due to "negative perception of its network and its inability (to offer) the iPhone."
Soon it will have the iPhone -- but will it have the network? Currently T-Mobile offers the advanced fourth-generation LTE network in only seven markets but is working to expand the coverage.
Jessica Dolcourt of CNET notes that T-Mobile's backup network, known as HSPA+ 42, is "a very quick network in its own right" and should suffice as T-Mobile rolls out the more advanced LTE coverage.
The writer also commends T-Mobile's offering of unlimited 4G FaceTime (video) calling with its $70 plan, and the fact that the iPhone supports HD Voice.
However, it won't allow Wi-Fi calling, i.e., free calls over broadband. The company's chief marketing officer "hinted that it could arrive later," Dolcourt says.
What works for you?
Negative perception of network coverage could be hard to shake, especially since the other three carriers are so far ahead with their 4G networks. Additionally, consumers who want to buy the phones may consider the "no-contract" concept a bit misleading: If you can't walk away free and clear at any time, then it is a contract.
The New York Times points out that cheaper plans already exist through smaller carriers, such as Virgin Mobile's $30 plan: 300 minutes, unlimited data and unlimited text messages. It also notes that after two years "most consumers" will want to upgrade their phones anyway.
Those of us with aging flip phones or older-model smartphones beg to differ. Some can't afford to replace regularly, and some don't want to: We just want to be able to make calls or do some basic Web browsing.
The uncarrier might save you money if you already have a phone, or if want to buy one from T-Mobile and keep it for a while -- or maybe buy it outright and then head off to a cheaper service provider. Do what works for you, and don't switch carriers until you've done your own comparisons and your own math. Lots of it.
More on MSN Money:
It's interesting that you write an article talking about problems with negative perception yet you do nothing but provide a negative point of view. All the way from the title downward nearly every assertion is phrased in a way to enhance doubt.
For a company that implies they value you and trust you as a customer without you having to sign a contract, their actions says something different.
If you are new and want one of their plans and a new phone, you are required to fill out and have your credit checked. It does not matter even if you want to pay for all of the purchase up front. You do realize that all their plans are prepaid and thus no credit risk. They still want a credit check on all. You can even bring your own phone and they want a credit check.
If you are already a loyal customer and want to upgrade your plan, you can online and at store. If you want to purchase or upgrade a phone, even if you want to pay for it all up front, you have to pass a credit check.
Sounds VERY PREDITORY to me.
We checked on this plan as an alternative to AT&T. The website said we could covert our AT&T iPhone to T-Mobile. When we went into the store, they told us that was not the case and we would have to buy a new one from them for $600+ and the whole 2-year payoff scam that was mentioned in the article. By the time it was all said and done we were getting nothing close to the $50 a phone mentioned in the ad. Needless to say, we are staying with AT&T for now.
I m getting pretty frustrated with my service provide, StraightTalk. I was marketed and sold a plan that claims to be Unlimited. For $45/Month + taxes and fees I was lead to believe that I was purchasing unlimited voice, text and data.
On June 21, 2013 I received an automated call from StraightTalk informing me that I had been categorized as an "excessive user" (I averaged 1.5 gigabytes a month this year) and that my data speeds were being reduced (they meant to say discontinued).
I think that this type of misleading advertising should be unlawful.
I am not a happy customer.
For the past 16 years, I have dealt with At&t (The worst, IMO), T-Mobile (the best service, IMO, and I stayed with them 7 years), Verizon (worst after AT&T, IMO), Metro PCS (a lot to be desired, IMO), Sprint (useless, IMO), and Alltel (they were OK, IMO), and all will try to vice grip you to a two year contract (exception Metro PCS).
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
WHAT IS FRUGAL NATION?
Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.
ABOUT DONNA FREEDMAN
Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.
The popular online program lets you earn Amazon cards, PayPal cash and other rewards.
VIDEO ON MSN MONEY
New rules mean that longevity annuities -- insurance against outliving your money -- are more attractive for retirement savers.