T-Mobile has given its wireless plans a major overhaul, betting that lower service prices, the elimination of two-year contracts, and "down payments" on smartphones will trump the traditional subsidy model of other carriers.
Because the pricing model for the new Simple Choice (a.k.a. "UnCarrier") is so different, comparing T-Mobile's new plans with the other major carriers is a little tricky. So let's walk through the plans and how they're different from Verizon, AT&T, and Sprint.
T-Mobile plan basics
With T-Mobile's new Simple Choice plans, the cost of service is always cheaper than the other major carriers, but the cost of hardware is more expensive. Still, when you do the math, T-Mobile remains cheaper in the long run as long as you're comparing the same type of wireless service.
Consider, for instance, Samsung's Galaxy S III on a two-year plan with 2GB of data on the UnCarrier plan. The base service costs $60 per month. The phone itself costs $110 up front, plus $20 per month for two years, for an overall cost of $590. In total, the two-year cost of owning a Galaxy S III on T-Mobile is $2030.
T-Mobile's plans include unlimited talk and text, and the ability to use your phone as a wireless hotspot at no extra charge. The same is true for AT&T's Mobile Share plans and Verizon's Share Everything plans. So let's compare: On AT&T, you'd pay $2240 over two years (and that's with just 1GB of data), for a subsidized Galaxy S III. On Verizon, you'd pay $2600 over two years.
AT&T does come out cheaper over two years if you get a bare-minimum individual plan at $70 per month, but that only includes 450 voice minutes and pay-per-text message. For unlimited talk and text, T-Mobile's plans are cheaper both up-front and over time. And unlike AT&T and Verizon, you save even more money after two years, when you're no longer paying off the full price of the phone.
The savings are even bigger for T-Mobile's Family Plans, which cost $100 per month for two lines with 2GB of data and unlimited talk and text. Each additional line costs $20.
Let's do the math for three lines, each with a Galaxy S III: On T-Mobile, the two-year price is $4650. On AT&T, the same service (with 6GB of data) costs $5280, and on Verizon, it costs $5400. Even if you got the bare minimum amount of data on AT&T's and Verizon's shared data plans, you'd still end up paying more during two years than you would on T-Mobile.
For the data hogs
Unlike AT&T and Verizon, Sprint still offers unlimited data, so it's worth comparing separately to T-Mobile's new unlimited data plans, which cost $70 per month.
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