Guest Post: Explaining The “Value” In Value Plan

Editor note: This guest post was written by a T-Mobile employee with hope of encouraging T-Mobile customers to select a Value plan by seeing the real “value” in your choice. With Saturday’s sale focused on Value plans we hope that this post will better explain to you what a Value plan is, why you might want to select it and if you can save money by choosing it. Standard Disclaimer: The views expressed in this guest blog do not necessarily reflect the views and policies of TmoNews.  

There has been a lot of skepticism when it comes to T-Mobile’s Value Plans and I believe part of the blame falls on a lack of advertising and explanation. This lack of advertising and explanation on T-Mobile’s behalf has caused Value plans not to be shown as a great value.

To get straight to the point, Classic plans are the standard industry way rate plans have been done for years. With a classic plan you select a rate plan and receive a phone at the a discounted price, generally somewhere between free and $200. The following examples will all be examined using up to date plans and pricing, using nothing grandfathered as there would be too many options and too many plans to compare.

T-Mobile(Classic)-This is what all customers are used to. An HTC Sensation 4G on this plan costs $199 up front and is your overall cost for the device. With an unlimited everything plan(2GB Data) the plan is $79.99 per month.

T-Mobile(Value)-Now this one is where it gets tricky. The same phone costs $199 as a Down Payment and $499 total. Now before discovering the phone costs five hundred dollars, let’s try to see the other side of it. Value Plans lower the cost of your price plan and features.You also finance the full price of your device with no interest. The payments are split into 20 months that range from $5 to $15 depending on the price point of the phone. In the case of the sensation it is $15. The same Monthly rate plan as above but on a Value plan is $59.99 per month. When you combine the monthly plan and the price of the phone on the installment plan you end up at a total of $74.99.

BUT WAIT THE PHONE STILL COSTS $499. That is true but if you do the math, you are saving $5 per month for 20 months. At the 20th month you will be done paying off the phone and your price point will lower to $59.99 saving you $20 per month for the last 4 months. The total savings over the 2 years is $180. To some people this might not be worth paying the total cost of a phone over time, but every dollar counts.

The example that I use is just one phone example. That is the highest end phone T-Mobile has with the highest EIP. If you purchased a mid end phone with an EIP of $10, then your savings over two years would be $280. If you purchased a low end phone with an EIP $5 then your savings over two years would be $380. If you choose to do a family plan the savings double.

Comparing Data and Family plans from classic to Value- Family plan add a lines on classic can be either unlimited or 500 minute line. A 500 Minute add a line is $10 per month with the 2GB data for $20, making a total $30 for the additional line. With Value it can either be the same price or lower depending on the phone you are looking to purchase. If you are looking to add a top of the line phone as the Sensation then you would be looking to pay $5 per month for the line, however the same data feature is only $10 instead of $20 providing another reason why Value plans are great. Plus the installment payment of $15 bringing your total up to $30 maximum, once again depending on the phone you purchase.

The savings are there plain and simple…but not for everyone. Due to the migration fees.

Migration Fees- These are assessed based on contract tenure NOT upgrade tenure. This is like a cancellation fee. To go to a Value plan you are essentially canceling your current contract to switch to a different one. Although I believe it should not be viewed as that or represented as that, it is what it is. Anytime after 9 months into a classic plan one may switch to a Value plan, at 9 month tenure one would have a $200 migration fee. Every 3 months that migration fee will be lowered by $50. At one year to 15 months left you have $150, at 9 months to a year left $100, at 6 months to 9 months you have $50, anytime under 6 months you are free to switch over with no penalty. Anyone on Even More Plus plans automatically qualifies to switch over to a Value plan. This is where you would have to do the math, is paying that migration fee worth the savings?If you are paying about $100 per month I would say yes definitely because the savings would out do the cost in 8 months maximum(if you had a $200 migration). For others who are paying less the savings would take longer and not necessarily benefit them.

Not only is T-Mobile more affordable but I can speak from experience from working for all 4 carriers at some point, T-Mobile treats their employees the best and has by far the best customer service, you don’t have to agree but there are awards out there proving so. *Cough* J.D. Power & Associates  *cough*.

There you have it folks, hope some of you come out to the stores this Saturday the 19th for amazing sales, to save some money and get some great deals on the best phones and tablets T-Mobile has to offer.

This is a reprint of a post done in September for another Value Plan sale

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  • Edin Dzeko

    I have the unlimited plan for $79,I’m planning to combine a line with my wife she is eligible for upgrade so how much will the Amaze cost if she gets the same plan as me if we combine the lines? Should I shop at Walmart or T-Mobile store tomorrow?

  • MF

    Tmobile needs to stop being shady!!!! Im not signing a two year contract and pay full price for my phone…..anyone who does is severely retarted!!!! It is just a creative way for Tmobile to make more money by not having to foot the bill for handset subsidies….and as a former employee i
    I can tell you all Tmobile cares about is money….

    • Maryjan

      Then get the Classic plan. It’s still cheaper than AT&T or Veriozon by a huge amount.  The classic plan is an old way that discounts the phone.

      • JadedNYer

        I would LOVE to go on a classic plan and upgrade my three lines but since I am on the EMP plant T-Mobile won’t let me. I don’t have any outstanding EIP and the original contracts expired many months ago.

        • Giraffe

          You already understand why buying the phone full price is a boon.  Why would you go classic?

      • Edin Dzeko

        If I get the classic plan will I still get the discount on the phone and how much will Amaze cost? If you have 2 classic plans with unlimited data,text and call how much will it cost per month together is there a discount with 2 lines?

    • Anonymous

      Then go ahead and subsidize that $500 phone and pay $200.  It will take you 15 months to fulfill that $300 subsidy by overpaying on your plan rate by twenty bucks and then after that you will continue to overpay on that plan indefinitely.  

      On the other hand you could pay $5 LESS per month for twenty months and then underpay on your plan by twenty bucks a month indefinitely.

      Either way you’re paying full price for that phone.  

      • http://littlebigideas.tumblr.com/ JakeMG

        However, those of us with wicked grandfathered plans will stick with getting the traditional subsidy.  I’ve got 1000 minutes for $49.99 on a family plan, then $10/mo for unlimited texting for all lines, then $20/line/mo for loyalty data (a 5 gig soft cap). So $99.99/mo for two lines (about $110 after taxes).  I’ll gladly pay the full subsidy to keep that plan.

        • Anonymous

          Can’t beat that!  But let’s not confuse the fact that the topic is about current plans.

        • http://littlebigideas.tumblr.com/ JakeMG

          I absolutely agree.  I just wanted to put it out there that stuff like this won’t benefit longtime customers.  No biggie.  It was a good explanation anyway. :)

      • Minority

        This is by far the most logical explanation. I tried to explain it to my wife some time last year on why we should use switch from the classic to the value plan but she didn’t quite get it. I just explained it again this way and she gets it :) 

    • Edsonzapata

      totally agree with you…where has it been seen that a company slams you with a two yr contract and you end up paying upwards of 500 dollars for a phone

    • Bee_hopes

      The real savings is when u just pay the phone off sooner or two weeks after u purchased like I’m going to do!! Woot woot!! Don’t care about a contract…. I’ve had a cell since I was 17, never cut off, now 26 yrs of age. Just got get away from Boost! I’m coming back T-Mobile.

      • Bee_hopes

        Was going to get the Monthly4G with the GS2 so i was going to buy phone outright anyway but the value plan will allow me to have insurance on my $529 phone! Perfect.

  • JamesLM584

    As a T-Mobile employee the Value Plan is the most annoying thing to deal with because most people are in a current contract and refuse to pay the $200 migration fee. I plan on quitting soon because it seems corporate doesn’t care anymore. 

    • A_fkn_comedian

      I can’t stand the offerings you guys have now, I’m so glad I’m still on my Even More Plus plan… No off-contract option that isn’t prepaid? Suck me, T-Mobile. Suck me.

      • Anonymous

        I went with a prepaid carrier for $45 a month for unlimited everything, was thinking of switch back once the new Nexus launches. The lack of Even More Plus is a no go, that was the best deal for people who can’t stand contracts.

      • Anonymous

        I went with a prepaid carrier for $45 a month for unlimited everything, was thinking of switch back once the new Nexus launches. The lack of Even More Plus is a no go, that was the best deal for people who can’t stand contracts.

  • Jimkenobi

    If you have to explain the “sale,” you have a problem. If most of your customers can’t participate (classic plan) then you have another problem. If you have to mail in a rebate to get the discount then you have a third problem.

  • A_fkn_comedian

    Repost? I remember seeing this story on here before…

  • Edin Dzeko

    If I want to buy htc amaze tomorrow with a classic plan how much will it cost?

    • http://tmonews.com David

      Regular price, this deal doesn’t apply to Classic plans.

  • Kaj Kandler

    Simple explanation:
    * Classic plan = phone line + phone rental + additional services (text, data, international, …) + break up fees
    * Value plan = phone line + phone on credit with down payment + additional services (text, data, international, …) + break up fees?

    I over simplify, because it is not really a phone rental, you are still responsible for loss and damage.

    Comparing those two outright, there might be value in the value plan, but only for (the small) group of people that can plan long term and intend to keep their phone potentially longer than two years.

    However it alienates the folks that have had a similar deal but w/o the 2 yr contract.

    Anyhow, if T-Mobile wants to be successful, they should break up the elements of the plan and allow people free combinations. Offer bare phone lines on 6-12 mo contracts, post paid, + services and family discounts. In addition offer phones to rent and phones to finance over time.

    Then target advertising to typical people that want the hip phone every 2 yr (The combination that is the Classic plan now) or those that want the savings but don’t mind to pay upfront (The classic plan with bring your own phone – market to people that don’t want to learn a new phone so they stick with the old one until it breaks, market to customers that want reliable/robust phones with long battery lives) and then the in between that can’t afford the up front cost so finance their fancy phone.

    That should also cut down on a lot of support costs, because the people have never to ask support or the T-Mobile store for eligibility of phone upgrades/conversions. If you break your rental deal, you pay the residual value of the phone and move on. If you walk away from the phone line that is fine too. Allow swapping the phone even to a pre-paid SIM card (swapping in the family ?). Just make it simple.

    • Giraffe

      Which would you rather spend?  200 upfront and 80 a month, or 200 upfront and 75 a month?  Safe to say the value plan actually makes upfront savings.  You’re not doing your math right.  Also, your complaint on how all of the charges add up on a value plan stands in contrast to “pay for every feature separately” that you offer immediately afterwards.  Either you’re a good troll… or you don’t know what you’re saying.

  • Dude Lebowski

    Who ever stayed on Even More Plus/FlexPay with or without EIP, and whoever is on Monthly 4G are the REAL winners here! I understand the mechanism and intentions of Value plan (which is cheaper than all plans from Tmo), but its still too confusing for the average customer. Its basically Even More Plus with a 2yr agreement. FAIL on T-Mobile’s end lol. 

    And so what if people defaulted on EM+ with EIP plans, people default on their contracts all the time. A loss is a loss and T-Mobile takes plenty of them on a daily basis. Lol…

    • Giraffe

      Less likely to default with an early termination fee.

  • Cashman

    I wish people would stop trying to sell me on this “value plan”. I like my account the way it is and I don’t mind paying an extra $10 a month. But if T-Mobile is going to do a special or 1 day sale, it should be for ALL customerss. Not just the ones with a certian plan

    • ValuePlan_Fan

      Why would you care?  You don’t mind overpaying for the same service.  T-Mo has recognized there are people that are fiscally responsible and they are trying to build more business with them.  Sounds like smart marketing to me.  Market a sale to those that want to save a buck.  Yup, I get it. 
      It would be interesting to get the sales numbers from both the September sale and the November sale since each was targeted to two different segments (Classic vs. Value Plans).

  • Dpro

    It used to be every carrier offered an upgrade once a year. Now they all try to shove a 2 year contract down our throats. Most phones being made right now either crap out or are severely outdated at or around the 1 year mark. There are a few exceptions phone wise but overall this is the current nature.
    Now given this, why the hell would I want to purchase a phone on 20 month of payments under contract. Sure the Value plan gives a slightly better deal but it still ties you down.

    If T Mobile offered a value plan with a 1 year payment agreement that would work. Maybe its to much to ask. It would be more advantageous for me to just buy a phone outright with my credit card and get a value plan without a phone and without contract.

    I think the carriers sticking it the public is getting out of hand and T Mobile is just finding more creative ways to do it and make you feel good about it.

    Not sure what I am going to do as I am completely eligible for an upgrade. That is if I stick around, of late T Mobile has not been impressing me.

  • Stu

    Sorry TMO, but as a long timer, you will have to pry my grandfathered plan out of my hands with something pretty damn good and this isn’t it.

    • Giraffe

      I don’t think they’re trying to get it out of your hands – they’re happy you’re a T-Mobile customer still.

  • Nexus Time

    If the Galaxy Nexus get announced soon, I’ll switch immediately. Otherwise, no dice.

  • Edsonzapata

    I feel in the past few months T-mobile has tried coming up with way too many marketing ploys to try and retain customers and get new ones through pretty numbers that the “Average” consumer can’t decipher. That’s coming from someone who worked at a T-mobile store where most consumers didn’t speak english and needed things explained to them the way I’d explain the iPhone 4s to my 70 year old grandmother. If I walk into a store I myself being an understanding person want things to melt into my brain, because shopping shouldn’t be a headache inducing process but rather a pleasant break from the monotony of life. T-mobile has made buying in their stores absolutely frustrating. Which is why I jumped ship payed to cancel both my lines and moved onto Sprint. The iPhone was a major decision factor, but their plans are laid out straight forward, there is no you can this 2 yr contract or this 2 yr contract pay this much save this much now then save this much and pay this much. Their equation is too long it’s the reason most people hate Algebra.

    • Giraffe

      T-Mobile should be telling you, your payment today is x, your monthly payment is y… and a store will do that for you.  While I think value plans are kind of misleading to the current contracted postpaid consumer, try telling someone who’s become accustomed to prepaid that an unlimited plan is $100-somewhat at Verizon, and they’ll never go back.  T-mobile’s trying to attract those customers with the Value plan.

      • Bee_hopes

        Yes. That’ll be me.

  • Plankton

    Plus the phone will be a brick in a few months. Why would you do that?

  • Plankton

    Plus the phone will be a brick in a few months. Why would you do that?

  • http://twitter.com/SocalFrank1 Frank Alvarez

    I’ve been with T-Mobile since they launched in California. I was on an old “Loyalty” plan which was pretty good, but I recently signed up with the value plan and couldn’t be happier. I have a 2 line plan and the 2nd line is for my mom. She loves her “dumbphone” and doesn’t want a smartphone, so we took a 2 line unlimited everything plan for $49 per line and knocked data off her line so for $90 per month we both get unlimited everything we want….including hotspot tethering on my HTC Sensational!
    The only down side is data throttling after 2GB on my line, but I have yet to hit that.
    My old plan was running me $135/month, so after taxes, I am saving $35/mo.
    Compare that to my business line which is with Verizon on an iPhone. There I pay $99 per month for unlimited voice + 10/mo for limited text +25/mo for data and that bill runs $140+/mo for 1 line – no tethering.

  • boricuamixn216

    What is there that is confusing? I understood this completely. Maybe it’s because I graduated college though…Basically, say you get the Samsung Galaxy S2…on a classic unlimited everything plan it will cost you $329 up front plus tax with a $50 mail in rebate, and your plan will be $79.99 a month plus tax…calculate the monthly price for two years($79.99 x 24) = almost $1,920 BEFORE tax, plus the $279 you paid for the phone makes total cost of ownership over $2000.

    Now the value plan…you pay $529 for the full device BUT ONLY $230 plus tax in the store that day so it already makes it more affordable than forking over $329 plus tax on the classic plan. Then the unlimited everything plan is only $59.99 a month for two years (the rest that the device costs goes into your bill so basically it’s actually $75 a month instead of $60). So over two years for the plan alone that ($59.99 x 24) = $1440 before taxes. The rest of the phone ($300) makes that total cost of ownership only $1740 for two years (before taxes again).

    So kids…$2000 for a Classic Plan minus $1740 for a Value Plan = $260 saved over two years on a value plan versus a Classic plan, AND with the cost of the phone rolled into the bill you would be paying close to, but still LESS THAN, a classic plan on a monthly basis. Plus after 20 months, you dont pay that extra $15 a month so your bill will go back down to the original $59.99 a month before taxes…Also on a value plan, if you don’t want data, you don’t have to get it so the plan will be $10 a month cheaper, plus the phones have wifi that you can use data for free anyways :-/ BUT was told on a Classic plan you MUST have data and it is $20 compared to $10 on the value plan.

    Now I am not a math major, but how is that so hard to understand?

    Now excuse me while I enjoy my Galaxy S2 on my value plan. 

    • Bee_hopes

      I’ll have my GS2 on my value plan Dec 22nd!! Can’t wait…. had T-Mobile for six years and made the mistake of switching to Boost in May…. I’m coming back home! Lol.

  • boricuamixn216

    And if you REALLY want to compare plans, take a look at Verizon, AT&T, and Sprint and see what they charge for a similar unlimited everything plan. I wasn’t going to pay more than $100 a month for unlimited everything like they charge. T-Mobile is way more affordable and my service is great now compared to how it use to be 6 or 7 years ago when I first had the iPhone on AT&T and was paying $140 a month for 450 minutes, unlimited text, and only 2 GB of data that cut off once I hit that limit.

    Some people are just stuck on stupid or on crack. If you want cheaper go to Revol or Virgin Mobile or Boost Mobile and see what shitty service is really like. So it’s either the cheap route, or the over priced route, or T-Mobile that is in between!  And not to mention, if you have to have a security deposit, I paid no security deposit at T-Mobile while Verizon wanted $300, AT&T wanted $500, and I think Sprint also wanted $300 for me to sign up that I had to pay THAT day on top of the cost of my phone PLUS activation fees! 

  • wheelman13

    I would pay $120/month for the new value plan or my grandfathered plan with 700min/400texts. I never go over so unlimited isn’t a benefit. By going with the new value plan, I miss out on ~$900 in subsidies when upgrading the two phones on my plan. Not seeing the “value” in switching over.

  • wheelman13

    I would pay $120/month for the new value plan or my grandfathered plan with 700min/400texts. I never go over so unlimited isn’t a benefit. By going with the new value plan, I miss out on ~$900 in subsidies when upgrading the two phones on my plan. Not seeing the “value” in switching over.