Saturday, June 22, 2013

Comparing T-Mobiles new pricing on iPhones

Ok so T-Mobile has added a new pricing structure that removes the subsidized cost of a phone.  This doesn't necessarily stop you from paying for a new phone over a two year period but it breaks out the cost of the phone from the plan cost which gives you more information on what you are paying which is still an improvement over competitors who hide the price of the phone in the plan.  And if you, for example, choose not to upgrade your phone, you know your plan costs at non-T-Mobile providers still include a monthly subsidy for a new phone.

The question quickly becomes, for someone like me, that has multiple phones on a single Family Share plan at AT&T, will this new type of plan save me money?

Here we go.

Let’s look at a scenario that actually mimics my current phone plan:

Let's assume you have two smartphones like an iPhone and one basic phone that has no data or texting.

On AT&T currently you would pay monthly:
$69.99 for 700 shared minutes with rollover minutes.
$30 for unlimited texting shared across all phones.
$30 for 3GB of data for your first phone.
$30 for 3GB of data for your second phone.
$9.99 for the non-smartphone.

That’s a monthly cost of $169.98 and remember AT&T does not include a hotspot feature with the $30 a month data plan. 

On T-Mobile currently this same setup would look like this:
$50 for the first line.
$30 for the second line.
$10 for the third line.
Apparently this includes 500MB of data for each phone and no hotspot capability.
Let's add Unlimited data at $20 per line which also adds hotspot capability.
$20 for unlimited data on the first phone
$20 for unlimited data on the second phone.

That’s a monthly cost of $130.00.  $39.98 per month less than AT&T but with unlimited data and hotspot capability.

Now let's add the cost of a phone.

On AT&T's a new iPhone 5 with 64GB of storage has an initial upfront cost of $399.  If you divide that $399 over 2 years, that's $16.63 per month.

On T-Mobile, a new iPhone 5 with 64GB of storage is $349.99 + $20 per month over 2 years, which comes out to $34.58 per month if you divide the initial cost and monthly payment over 2 years.  

So to compare monthly costs, let's take that $16.63 per month for our iPhone at AT&T, and add to that the extra $39.98 per month that AT&T's plan costs then subtract the monthly payments and initial cost of $349.99 for our iPhone on T-Mobile at 34.58 and you appear to save $22.03 per month on T-Mobile's plan.

That's if you buy 1 iPhone.  But we said we needed two.  So let's double the numbers.
AT&T Initial cost:  $798/24 = $33.25 
T-Mobile Initial cost:  $699.98/24 = $29.17

Add in AT&T's $39.98 plan difference so AT&T is $73.23 per month
Add in T-Mobile's $20 per month payments X 2 phones = $69.17

And now T-Mobile is only $4.06 per month lower, although with unlimited data and hotspot.

So what does that mean?
It means if you don't upgrade your phones every 2 years to the latest models, you can save as much as $39.98 per month with T-Mobile.  However, if you have two smartphones, and upgrade them every time you become eligible for an upgrade you actually save only $4.06 per month.

Also that 3rd phone in our hypothetical example was a feature (non-smart) phone.  Looks like you can get a Samsung t159 for $3 a month at T-Mobile.  On AT&T I used an old Razor so it didn't cost me anything for the phone.

1 comment:

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