T-Mobile today started accepting pre-orders for the iPhone 5, as part of their new contract-free wireless plans. The T-Mobile plans require you pay for the phone over a span of 2 years and requires a down payment. In the case of the 16GB iPhone 5, that’s $99, with a $20 monthy payment for 24 months. The total outlay is $579, not including your wireless charges. If at any time you decide to leave T-Mobile, you are still responsible for the cost of the iPhone, but they will at that point unlock the phone.
For an individual plan, the first line costs $50 for unlimited talk, text and 500MB of high-speed data. That last number is woefully insufficient, suggesting that most customers will pay an additional $10 for 2GB of data, so a net cost of $60 per month for unlimited talk, text and 2GB of data. To go unlimited data, it’s $20 additional, or $70 per month.
When you bundle this with the cost of the iPhone, it breaks out to $80 for the 2GB option or $90 for the unlimited plan. Both seem very competitive. Carriers make it increasingly difficult to compare plans, since they all offer different options. Wouldn’t it be great if there were standardized plans across all carriers, so consumers could easily make their purchase decisions. AT&T offers a 3GB data plan for $30. They break out their voice and messaging into two different services. Unlimited voice will set you back $69.99. Unlimited messaging is $20. An AT&T plan with unlimited calling, text and 3GB of data is $119.99. Your initial outlay for the 16GB iPhone is $199.99. Your 2 year cost for wireless service (not including assorted taxes, fees and activation charges) breaks out to $2879, combined with the $199 for the iPhone and you are in for $3078. The comparable T-Mobile plan is $99 plus $80X24 for a total cost of $2019. Granted, you are getting 2GB of data vs 3GB data, but the savings is over $1000.
Verizon uses a similar pricing structure as AT&T, whereby the iPhone 5 is also heavily subsidized by your wireless agreement. Verizon plans require a monthly line access, which is before any talk, text or voice add-ons. For individuals, it’s $40 for the iPhone. A comparable 2GB data plan, with unlimited talk and text is priced at $60 for a total of $100 per month. This is in direct comparison to the T-Mobile offering of $80. Let’s see how this breaks out over the span of 24 months. Verizon will cost $2400 for the plan, plus $199.99 for the iPhone, totaling $2599.99. The comparable T-Mobile plan is $2019, so it’s roughly a $600 savings.
T-Mobile’s CEO used plenty of brash language and a circus like atmosphere to introduce the company’s new uncarrier plans. In reality, customers are faced with the choice of an iPhone subsidized by a 2-year wireless contract vs a 2-year payment plan for the hardware. The latter gives you the freedom to leave, but in actuality, you can leave Verizon or AT&T early by paying an ETF. We’ll leave the math of that equation for another article or perhaps a lengthy discussion in our forums. T-Mobile plans will no doubt save you money, but the elephant in the room is service. T-Mobile offers support for HD Voice, something not currently available on the others. Both Verizon and AT&T have the advantage of wide-reaching LTE data networks, with T-Mobile offering support in just a few cities. That will take time for them to rollout and data speeds are important.
T-Mobile plans cost less, offer an easy out, but your overall experience will be dictated by the service available in your area. Are you making the switch to T-Mobile?