T-Mobile USA's new plans compared to competition

T-Mobile USA's new "no contract" plans compared to competitors

Associated Press
T-Mobile USA's new plans compared to competition
.

View photo

T-Mobile Chief Marketing Officer Mike Sievert holds brochures if competitors' plans as he speaks during a news conference, Tuesday, March 26, 2013 in New York. T-Mobile will start offering the iPhone 5 on April 12, filling what company CEO John Legere said was "a huge void" in its phone lineup. The company is currently the only major U.S. carrier not to offer Apple's popular smartphone. (AP Photo/Mary Altaffer)

NEW YORK (AP) -- T-Mobile USA has revamped its pricing plans, the latest move in an industry that's still experimenting feverishly with various ways of luring customers and getting current ones to pay as much as possible. Here's how T-Mobile's gambit compares.

T-Mobile USA

The most significant change is that T-Mobile is breaking the cost of the phone away from the monthly service fee. Instead, the company will sell the phone on an installment. It's making a big deal out of the fact that it will no longer have two-year service contracts, but it's replacing them with two-year financing contracts. To buy an iPhone 5 from T-Mobile, you'll be putting $100 down and then paying $20 per month for two years to pay off the phone. That's on top of service fees that start at $50 per month for unlimited talk, text and 500 megabytes of data. An additional $10 per month gives you another 2 gigabytes of data. Add $20 instead, and you get unlimited data. If you leave T-Mobile within the two-year period, you'll still be charged $20 a month until the two-year contract runs out.

Pros: T-Mobile's plans are generally cheaper than the competition. If you've paid off your phone, your monthly bill declines. You can pay off the phone early if you want, with no penalty. You can also buy "unlocked" phones, or bring them over from AT&T, and get a good deal on monthly service. T-Mobile's "4G" service is relatively fast — at least, faster than Sprint, in places where Sprint doesn't have LTE. T-Mobile also offers unlimited data service, for peace of mind.

Cons: T-Mobile's data network coverage is poor in rural areas. It's only now rolling out an "LTE" network, and it doesn't have access to the low frequencies where Verizon Wireless and AT&T run their wall-penetrating LTE networks. There's no option to share a data plan among many devices, but T-Mobile makes it relatively inexpensive to add a line to the plan: $10, which comes with 500 megabytes of data usage.

Bottom line: The price over two years for a 16-gigabyte iPhone 5 with unlimited calling, unlimited texting and 2.5 gigabytes of data usage per month, excluding taxes, is $2,020.

Verizon Wireless, AT&T

Last year, the two big guns in the wireless industry trotted out "shared data" plans that let a family tap into a common pool of data usage every month. They're betting on a future where phones will be just one of many devices connected to wireless networks.

Pros: The shared data plans make connecting tablets, laptops and mobile hotspots cheaper. Verizon has stellar coverage and the largest high-speed "LTE" network. AT&T has less coverage, but more than T-Mobile and Sprint, and it has a fast "4G" network in most places LTE isn't available.

Cons: For single phones, AT&T's and Verizon's prices are considerably higher than T-Mobile's — you pay for that extra network coverage and reliability. Neither offers new customers unlimited data. The two-year contracts are complicated, with early termination fees and varying periods before you're eligible to buy a new phone at a subsidized price.

Bottom line: The price over two years for a 16-gigabyte iPhone 5 with unlimited calling, unlimited texting and 2 gigabytes to 3 gigabytes of data usage per month is $2,635, excluding taxes.

Sprint Nextel

The No. 3 wireless company has done the least to revamp its pricing plans — they're pretty much the same they've been for the last five years.

Pros: Sprint has stuck to offering unlimited data plans, which is good for peace of mind. It sells smartphone service for as little as $35 per month through its Virgin Mobile subsidiary.

Cons: Unlimited data service is only good if the network is fast enough to serve up all the data you need, and Sprint's network is in a complicated transition period. Its "3G" service is very slow. It's complemented in places by Clearwire's "4G" network, and it's in the early stages of an "LTE" buildout. With unlimited data as the only option, Sprint-branded smartphone service isn't cheap. The two-year contracts are complicated, with early termination fees and varying periods before you're eligible to buy a new phone at a subsidized price.

Bottom line: The price over two years for 16-gigabyte iPhone 5 with unlimited calling, texting and data, excluding taxes, is $2,840.

Rates

View Comments (31)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Enjoy this refreshing Triple Play offer!

    Get FIOS TV Mundo starting at $79.99/mo. w/ no annual contract + 2-yr. price guarantee. Or sign for 2 yrs. & get a $300 prepaid Visa. Click here.

    AdChoicesVerizon FiOS ®Sponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • 1 Tip To Lose Belly Fat

    It's Hollywood's Hottest Diet And Gets Rid Of Stubborn Fat Areas Like Nothing Else.

    AdChoicesagoodcooksSponsored
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • 10 rock-solid stocks for conservative investors

    10 rock-solid stocks for conservative investors Shares with low volatility can beat their indexes with less risk Bloomberg News/Landov U.S. Bancorp is the cheapest S&P 500 stock

    MarketWatch
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Best Womens Wrinkle Creams 2014

    Mom reveals simple wrinkle solution that has researchers very excited. Try this free solution today to look and feel years younger.

    AdChoicesBellaLabs.comSponsored
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…

    Credit.com