T-Mobile Value Plans

Hopefully our subscribers don't know how to do the mathematics...

I haven't really spoken up on this because... Well, at first I didn't think it would catch on.  But more and more I have people inquiring about the T-Mobile Value Plan.  As advertised, the plan gives you unlimited talk, text and web for just $49.99 per month (per phone... assholes).  First of all, dividing the total cost in half and marketing the price with a disclaimer is sketchy, at best.  We have customers coming in several times a day asking if they can convert their family plan to "the $50/month unlimited everything plan."  After a bit of explanation, they generally leave pretty angry.

The real issue I have with the value plan is the phone selection.  Did I say phone selection?  What I meant to say was: "They don't give you a phone.  Unless you buy a used phone, you're going to have to shell out the MSRP for your new device, or pay a sizable down payment and 20 monthly installments."

T-Mobile is (was?) a subsidiary of Deutche Telekom.  So this whole adaptation of the European wireless system where you get a cheap price on your service and buy whatever phone you want is understandable.  But T-mobile has basically just repackaged their plans and hoped that nobody will notice.

Consider this example:

Classic Plan


You buy two Galaxy S II smart phones and activate them on a classic plan that gives you unlimited talk, text and web (actually 2 GB of 4G service, and unlimited throttled speed thereafter).  You pay roughly $150 per phone and your monthly bill is $140.  At the end of your contract, you have paid roughly $3660 for your service, excluding tax.

Value Plan


You buy two Galaxy S II smart phones and activate them on a value plan that gives you unlimited talk, text and web (actually 2 GB of 4G service, and unlimited throttled speed thereafter).  The plan will cost you roughly $100 per month.  The plan includes no phone, so the T-Mobile rep (you'll have to buy the phone directly from T-Mobile, unless you want to pay full price... even though Costco, Amazon, Wirefly, etc always have better deals) takes a down payment of $200 per phone, and then charges you $20 per phone, per month for the next 20 months until the phones are paid off.  So that's $2400 for the plan, a $400 down payment, and $800 to pay off the balance on the phones.  At the end of your contract, you have paid roughly $3600.

A savings of $60 over the course of two years doesn't really sound like a great value.  Especially with all the hassle involved with paying for the phones up front or with monthly installments.  This matter is further complicated when we add phones more phones to the plan.  Another Galaxy S II will cost an additional $200 up front, and $20 per month for the next 20 months.  Conversely, if you don't want a high-end device, you may be able to save some money at the end of your contract.  T-mobile is the real winner, in the latter example, as they buy low-end smart phones for low-end prices.

With that said, T-mobile is still the best value when compared with Verizon, AT&T and Sprint.  While the service might not be quite up to par with the larger networks, we always find ourselves recommending them when pitching family plans with multiple smart phones.  Similar plans with Verizon and AT&T will run you over $200 per month, and Sprint's "Simply Everything" plan is so rife with hidden fees and surcharges, you would be hard-pressed to save any money with it.

If they would just drop the whole "$49.99 per month, per line" garbage, maybe I wouldn't be so bitter...