I’m trying to make sense of T-Mobile’s new wireless contract pricing plans. And I’m having a hard time.
If you didn’t hear, T-Mobile got rid of the two-year contract system that every other major carrier locks its customers into, instead opting for a month-by-month payment system. Plans start at $50 for unlimited talk and text, plus 500 MB of 4G data for one phone. A second line costs $30, and each additional line costs $10 more. For each phone, you can add 2 GB of data for $10 a month, or bump up to unlimited 4G data for a total monthly fee of $70.
The biggest part of the phone market that this plan changes, though, is the way phones are subsidized. When you go to a Verizon store or AT&T, you can get a new 16 GB iPhone 5 for $199 when you sign up for a new two-year contract. The phone itself costs $649, which is the price you’d pay if you weren’t eligible for an upgrade. Verizon, AT&T or just about any other carrier eats the $450 difference because it knows you’re going to pay close to $2,000 over the next two years for the data and service that hardware requires.
With T-Mobile’s new plans, you have two options. You’re able to buy an iPhone 5 from T-Mobile for $579 up front, which is $70 less than just about any other carrier, which is awesome. Or, you can essentially lease your phone from the company, for $20 a month for 24 months, after forking over a $99 up front cost.
As I have previously written, wireless contracts and plans are obscenely expensive. T-Mobile’s new plan theoretically would save me several hundred dollars over a hypothetical two-year phone cycle when compared to Verizon’s Share Everything plan or an individual plan on AT&T.
But the problem is that I live in the middle of nowhere, New Jersey, and know for a fact I don’t get T-Mobile coverage out here. When I drove cross-country last summer, I bought a T-Mobile prepaid 4G broadband card to give me internet access in places I wouldn’t otherwise have access to Wi-Fi. It was cheaper than the Verizon one, Best Buy had a promotion on it at the time, and (when I was in a coverage zone) it would be significantly faster than the Verizon 3G prepaid devices offered to me.
When I tried to set it up, I was barely able to activate it. I had to move the device all around my house until I found a place that had juuuuuuuuuuust enough reception to get the device turned on and my first month of service started. Once I hit the road, the device was again pretty hit-or-miss (with the emphasis on miss.)
While coverage was spotty, I have to say that when I was in a major city, the service was pretty awesome. It was great in New Orleans, Los Angeles and Kansas City, where I was able to browse the web, upload pictures and check e-mails with almost the same speed I had at home with Comcast cable internet. (And this was before T-Mobile rolled out true 4G LTE, which it also just announced this week.)
But when I was on the road, or in a smaller town, or in a hotel outside of town, the service was barely usable. If I could somehow connect to 3G – forget about 4G service in most of the country – the service was barely usable. I wound up paying for Wi-Fi in a lot of places I thought I wouldn’t have to.
So, no, T-Mobile, I won’t be switching to your service. If I lived in a major city or spent most of my time in one, your plan would make sense to me and I might go with it. But being outside your grid makes your slightly cheaper service a bigger waste of money than throwing an extra few hundred bucks to Verizon over the course of two years.