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T-Mobile Practically Giving Away Phones – Price Comparison with AT&T

July 26, 2013 /  by  
 

good guy t-mobile

Things are rapidly changing in the world of cellular telephones. T-Mobile has really started to shake things up lately – most recently by eliminating contracts.

Read our article about T-Mobile dropping contracts.

So I could walk into AT&T right now and buy a new phone for $200. I’d also be signing up for 2 years of service to get that price. Say I just want 450 minutes, unlimited texting, and 3GB of data… that’s $90/month.

  Phone Service Total
  Upfront Monthly Monthly Details Upfront Monthly 2 Years
AT&T $200.00 $90.00 450 Min, Unlimited SMS, 3GB Data $200.00 $90.00 $2,360.00

Then I take my new phone over to T-Mobile and ask them to beat that price.

“Duh. You can get that same phone for $150 upfront and pay it off in 2 years at $20/month.”

But what about service? Can’t use a phone without a way to connect!

“You can take the SIM card out of your AT&T phone and just use that, or get service from us for $70/month.”

Wow, that’s cheaper than what I pay AT&T… but what do I get for $70?

“Unlimited everything! You get minutes, texting, and data… all unlimited.”

  Phone Service Total
  Upfront Monthly Monthly Details Upfront Monthly 2 Years
AT&T $200.00 $90.00 450 Min, Unlimited SMS, 3GB Data $200.00 $90.00 $2,360.00
T-Mobile $150.00 $20.00 $70.00 Unlimited Min, Unlimited SMS, Unlimited Data $150.00 $90.00 $2,310.00

For the same monthly price, I get more for my dollar, and I saved myself $50 upfront on the cost of the phone by choosing T-Mobile over AT&T.

“Oh wait, we just opened up this new promotion that I forgot to tell you about. We can give you that same phone for zero upfront today if you just pay $5 more a month.”

They’re obviously trying to get more money from me. Whenever the carrier tells you it’s a good deal, they’re lying through their teeth, right?

T-Mobile Upfront Monthly Total Cost
Option #1 $150.00 $20.00 $630.00
Option #2 $0.00 $25.00 $600.00

 

  Phone Service Total
  Upfront Monthly Monthly Details Upfront Monthly 2 Years
AT&T $200.00 $90.00 450 Min, Unlimited SMS, 3GB Data $200.00 $90.00 $2,360.00
T-Mobile $150.00 $20.00 $70.00 Unlimited Min, Unlimited SMS, Unlimited Data $150.00 $90.00 $2,310.00
T-Mobile $0.00 $25.00 $70.00 Unlimited Min, Unlimited SMS, Unlimited Data $0.00 $95.00 $2,280.00

“See! I just saved you an extra $30 on the cost of the phone, and you don’t even have to give me a dime today.”

What just happened?

  Phone Service Total
  Upfront Monthly Monthly Details Upfront Monthly 2 Years
AT&T $200.00 $90.00 450 Min, Unlimited SMS, 3GB Data $200.00 $90.00 $2,360.00
AT&T $200.00 $110.00 450 Min, Unlimited SMS, 5GB Data $200.00 $110.00 $2,840.00
AT&T $200.00 $140.00 Unlimited Min, Unlimited SMS, 5GB Data          $200.00 $140.00 $3,560.00
T-Mobile $150.00 $20.00 $60.00 Unlimited Min, Unlimited SMS, 2.5GB Data       $150.00 $80.00 $2,070.00
T-Mobile $0.00 $25.00 $60.00 Unlimited Min, Unlimited SMS, 2.5GB Data       $0.00 $85.00 $2,040.00
T-Mobile $150.00 $20.00 $70.00 Unlimited Min, Unlimited SMS, Unlimited Data $150.00 $90.00 $2,310.00
T-Mobile $0.00 $25.00 $70.00 Unlimited Min, Unlimited SMS, Unlimited Data $0.00 $95.00 $2,280.00

So it’s roughly $150 more per year to have a comparable plan on AT&T over T-Mobile, unless you get unlimited everything which makes it closer to $625 more per year with AT&T for a similar plan. Also, T-Mobile’s contract is just for the device, not service. If I decided I wanted to go back to using AT&T, I could cancel T-Mobile service at any time without paying a penalty and keep my phone. But you’d still be making monthly payments on the phone, and AT&T won’t be giving you a discounted monthly rate for bringing your own device. In that situation, your’e better off taking a $1 smartphone on a contract with AT&T and then flipping it on eBay to offset the monthly cost increase.

My examples above were calculated using pricing for the Samsung Galaxy S 4. T-Mobile is offering the same promotion across all of their popular smartphone choices. In the chart below, “No Contract” pricing indicates a full price purchase to avoid any type of contract, which is the same final purchase price as if you used their previous payment plan of a down payment and monthly payment plan. For the new T-Mobile promo, you also need to commit to 24 monthly payments to pay off the balance due for the device, but you do not need a down payment. For AT&T, you need to commit to 24 months of cellular service to get the “Down Payment” subsidized price for the device.

  T-Mobile AT&T
Device Previous Upfront Previous Monthly No

Contract

Down Payment Monthly Payment Promo No

Contract

Down Payment Monthly Payment
Samsung Galaxy S 4 $150 $20 $630 $0 $25 $600 $640 $200 $0
Samsung Galaxy Note II $150 $20 $630 $0 $27 $648 $705 $300 $0
Samsung Galaxy S III $50 $20 $530 $0 $22 $528 $465 $100 $0
HTC One $80 $20 $560 $0 $25 $600 $600 $200 $0
iPhone 5 $146 $21 $650 $0 $27 $648 $650 $200 $0
Sony Xperia Z $100 $20 $580 $0 $25 $600 N/A N/A N/A
Nokia Lumia 925 $50 $20 $530 $0 $20 $480 $475 $100 $0
Nokia Lumia 521 $30 $5 $150 $0 $5 $120 N/A N/A N/A
BlackBerry Q10 $100 $20 $580 $0 $25 $600 $585 $200 $0
Samsung Galaxy Tab 2 10.1 $90 $15 $450 $0 $20 $480 $450 $350 $0

As you can see, the new T-Mo promo isn’t always a better deal. Grabbing a GS4 saved me $30 using the promo, but a Galaxy Note II would cost $18 more just to avoid putting $150 down upfront. The promo only saves me $2 on an iPhone 5, but it’s nice to walk out of the store with it having put down zero dollars instead of $146. An HTC One costs $40 more in the end if you use the promo, so it might be smarter to just pony up the $80 down payment when you purchase the phone. Yes, you can actually get an entry-level Windows Phone for $120 brand new. Even the Lumia 925 is begging you to buy it, where the promo will save you $50 by not paying $50 to take it home.

Source: T-Mobile