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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.

By Donna_Freedman Mar 28, 2013 1:11PM

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?

Sort of.

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.

That's because you're buying that iPhone on the installment plan: $100 upfront and $20 per month for two years. If you choose instead to pay for the phone outright, or if you bring your own phone to the deal, then it really will be a no-contract plan, for which you'll pay $50 to $70 per month depending on the type of service.

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."

Logo: Businessman in car with smartphone (Image Source, Image Source, Getty Images)
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:

18Comments
Jun 2, 2013 5:04AM
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What's a "tech slowpoke" with a 5 year old phone used for "voice calls only" doing writing this article?
Mar 28, 2013 9:15PM
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We had T-Mobile for twenty plus years (before they were Arielle).  We loved their service, always willing to help etc.  Then about two years ago their service started going downhill.  We couldn't get good service even in our own home.  I office out of our home so it's important to have good service.  The only way I could get decent service was to make sure I was on wi-fi calling.  Even then sometimes it dropped.  We kept calling and they were nice trying to help, but nothing they did helped.  We asked to get out of the contract (5 phones in the household) and they said they would charge us $250 each.  We asked our attorney who told us to switch if we wanted, pay the fee, and then they would handle it  We did.  The attorney wrote a letter for us and we were reimbursed $1000.  (One son decided to stay with them on his own).  We were sorry to leave, but we switched to Verizon and have had no trouble at all.  And we were happy the attorney was able to get our money back.  But T-mobile really has gone downhill as far as the types of phones and the network.
Mar 28, 2013 3:11PM
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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.

 

Nicely done.

Mar 28, 2013 10:10PM
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I'm a T-Mobile customer ever since they bought out VoiceStream (now that was a good Company) and have never had a problem with coverage be it on the road, in my house or even in an elevator, still don't have a problem with that. The problem now is customer service. It used to be the best in the business but about three years ago is started to go downhill and now rivals AT&T's. I stay with them because I haven't had to sign a contract after the initial one. They offered me and other longtime customers unlimited calling a couple of years before they offered it for new customers. It made you feel appreciated but it all changed. When AT&T wanted to buy T-Mobil, about 90% of users said they would jump ship if that would ever come about. Now those two compete for being the worst in the business. I stay with them because I don't get it cheaper anywhere else since I always have and always will buy my phones and just insert the SIM card.
Mar 28, 2013 10:21PM
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if you already have a phone and don't plan on getting a new one it's just the same prepaid plans that they've been offering for years.
Jun 6, 2013 9:56AM
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I have WIFI calling with T-Mobile not sure when this article was researched I also have WIF tethering included in my 2.5 gigs?? 4 lines 3 brand new phones $160 a month unlimited talk, text, 500 mb web on 3 lines 2.5 gigs on the other........I think it is an awesome deal!
Mar 29, 2013 1:19AM
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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.

Jun 7, 2013 2:15PM
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I like my Tmobile plan.  Unlimited data with the first  5 GB per month at 4G speeds.  Unlimited text.  100 talk minutes.  All for $30 a month--no taxes, no fees on top of that amount.   I've never gone over 100 talk minutes because I use Google voice or Talkatone instead of the minutes.  I bought the Samsung smartphone up front.  The Tmobile site always has sales running on their phones.
May 28, 2013 3:29PM
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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.

Jun 25, 2013 2:34PM
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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 have reviewed StraightTalk's Terms of Use and although there are statements in section 6 of that document stating that users can be terminated for misuse (it defines misuse) it states no monthly data limit.

 

I think that this type of misleading advertising should be unlawful.

 

I am not a happy customer.

Jun 11, 2013 9:45PM
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dec 2013 my contract (after 5 years being with them is going to end) going to shop around,dont mind then current smartphone subsidised/2 year contract,if no great deal going with 35$/month unlimited talk/text/web virgin mobile
Aug 6, 2013 2:35PM
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why is there a six month old articl on msn ?
Aug 1, 2013 6:46AM
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It's cheaper, and the ball stays in your court if you buy your own wireless phone before signing with any wireless carrier. Once a carrier has you in a "contract", you are stuck.

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).





Apr 14, 2013 9:48AM
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T-Mobile  sent me a replacement phone and when I sent the old one back they said we never got it ,after I proved  they did they played the charge on charge off game for six months. After that long of explaining myself I told them to go to hell glad to see there failing.
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