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Are T-Mobile’s new cell plans really contract-free?

Written by on April 10, 2013 in T-Mobile - No comments

T-Mobile announced a short while ago it’s new strategy for cell phone plans.  No more contract plans, and simply pay $50 for your first line and $30 for an additional line.  Initially it does seem cheaper, until you realize what they have really done.  You still need to purchase a phone from T-Mobile outright for the full retail price that may cost you $600-800 out of pocket, or finance the device with a small down payment, and $20 dollars a month for 24 months.

All T-Mobile has done here is split the cost of the cell service into 2 pieces – the cost of the phone, and the voice/data/text plan of your choosing.  If you can’t (or won’t) pay for the phone in full, you have to sign a 2-year contract to pay for the phone.

IDG takes a look into the details of this deal:

“T-Mobile is the fourth largest U.S. carrier after Verizon, AT&T and Sprint. Last month, the company announced it would place less focus on typical two-year phone contracts in favor of no-contract plans and an option to pay a down payment on a new phone, then pay the rest of the balance off in small monthly installments over a two year period.

Carriers such as Verizon have been offering low-cost, no-contract cellular plans in addition to traditional two-year plans with subsidized phones for a while now, but those cheaper no-contract plans have typically required you to BYOD or pay the full cost of a new phone up front.”

The only time you’re going to save real money with the T-Mobile plans, is when the physical phone is paid off and you’re left with just the service plan.   If you opted for the payment plan, that’s after 2 years.  This is right around the time most people are wanting to upgrade to a new phone anyways, so you really never can get ahead.

The only real advantage is the typical down-payment to purchase a phone for use is typically half of the other major carriers.  A $199 phone on Sprint or Verizon may only be $99 down on T-mobile.

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