News by Andrew Kameka on Tuesday March 26, 2013.
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Change can sometimes be confusing or challenging, but it also has the potential to be good. T-Mobile's new subsidy-free calling plans may confuse some, but they actually make perfect economic sense.
The new T-Mobile plans clearly are the most affordable of any major carrier. That's not even up for debate. What matters is if it's truly the most valuable. T-Mobile offers more in services for the dollar, but the quality of those services will vary by market. LTE is available in only seven cities, compared to dozens for Sprint and hundreds for AT&T and Verizon. While HSPA+ delivers quality service to millions of people, performance and worth of T-Mobile will vary by region. It's not just about download speeds; upload speeds, network reliability, and call quality also determine the quality of a network.
For the sake of comparison, let's say all things are equal and you live in a city where T-Mobile service is as good or at least comparable to other services. A look at the math shows how the new "Un-carrier" stacks up against the competition. Imagine you wish to buy a BlackBerry Z 10 at T-Mobile:
- Retail price: $531.99
- EIP price: $99 upfront, plus an additional $18 for 24 months ($531)
- Payment plan: $70 per month for Unlimited Talk, Text, and Web ($88 with EIP)
Over a two year period, the total cost paid to T-Mobile will be about $2,211. Compare that to ATT, which will charge about $3,078 for two years of owning a BlackBerry Z10. The comparable AT&T plan for Unlimited Talk and text will cost $110 per month with 4GB of data if you opt for a MobileShare plan. AT&T doesn't offer a price discount after the 24 month period expires, so AT&T customers will always pay an additional $40 per month. Attempting to end service prematurely can cost up to $325.
T-Mobile's new plans have the potential to save customers nearly $600 over a two year period. When factoring in service plans only, the savings can reach $960. T-Mobile's new service plans have plenty of pitfalls and stipulations, so the notion that the company is making its service simpler is not entirely true. However, strictly from a cost perspective, there are clear advantages. Here's a comparison of T-Mobile's new calling options in relation to other major U.S. carriers.
Carrier costs for 24 months (Equipment Installment Plan)
|iPhone 5 cost||$99||$199||$199||$199|
Carrier costs for 24 months (device costs paid upfront)
|iPhone 5 cost||$650 (est.)||$199||$199||$199|
Carrier costs for 4-line Family Plan (device costs not included)
Andrew is based in Miami, Florida.