T-Mobile Moving New Postpaid Customers To Billing In Advance

Effective May 20th, T-Mobile is making some sweeping changes to their current billing methods for new postpaid customers. Customers are now billed in arrears, meaning you pay for usage after you’ve actually used it. Now, effective May 20th, new customers signing up on the T-Mobile network will be billed in advance for reoccurring charges.

This change will only affect new customers to T-Mobile — there doesn’t seem to be any indication existing customers will be moved to “Bill Current.” Upon new activation, new customers are assigned to the next possible bill cycle end date. Usually the bill cycle date will fall without four days of the activation date of service.

This isn’t a surprising change, considering most of the nations wireless carriers have billed in advance for some time. In all honesty, I’m actually surprised T-Mobile has waited this long to make the change. For the first month of service there can be a bit of sticker shock, but overall, you don’t spend any more money than you would in arrears.

There’s a bunch of details below, but for the most part this is exactly what those of you who have spent time on other wireless carriers have come to expect. First bills include a prorated charges, the full monthly recurring charge and the activation fee.

No word on what happens to existing customers upon changing rate plans.

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  • Mr P

    I understand other companies do it, but T-Mobiles postpaid activations are at an all time low…telling a customer they have to pay full price for a phone and put a down payment up front and than receive the first bill a week later with all these charges at once is gonna hold some people back from activating or cancel within the first 14 days once they see the first bill…think about it, a family of 3 new activations spend $600 on phones the 1st day, a week later they get a $350 bill with all the fees, etc…$1000 the first week is just to much IMO…a lot of people are living pay check to pay check in this economy.

    • ed

      it is too much not to much

      • Ricky

        Really ? Ok grammar police ..

    • Freak4Dell

      Where are they going to go? All the other carriers use the bill-in-advance method, too, so they’ll get the same type of bill regardless. They could go prepaid, but then they have to spend more on devices.

      • X

        customers who are currently with verizon or ATT have a bad stigma attached to TMO. this just lessens the incentive to actually make the switch as TMO is the self proclaimed “value” brand, now a customer is just going to loose the value of not having to pay that money up front, like the rest. forget where else would they go, the question is why would they come to TMO now?

        • UMA_Fan

          I think ‘how long till my first bill’ is one of the last things people consider when switching carriers.

          It’s not so much they are paying up front, but it looks like they will GET a bill ten days after they activate. That bill would MOST LIKELY not be due until a few weeks later, if not a month.

          Traditionally on T-Mobile when you set up an account, you finish out the partial month you are currently in, THEN use up a whole new month, only then do you get a bill a few days after the end of that cycle which won’t be due until around a month AFTER that.

        • randomnerd_number38

          UMA_Fan has it right. It’s not that they’re paying for their service up front, it’s that they’re getting BILLED for the service up front, and it’s due the traditional 22 days after the bill date. The way it is now, it’s true that a lot of customers don’t get their bill until 2 months after activation, but that bill is huge because it’s for 2 bill cycles. So the real-world effect of this is actually LESS bill shock for the customer because it’s 2 smaller bills instead of 1 huge bill.

        • Freak4Dell

          I honestly doubt very many people are concerned about that. Most people probably have no idea that T-Mobile did it differently from other carriers up until now. I certainly didn’t know until I got my first bill. Even if I had known, I wouldn’t have cared either way.

          Oh, and randomnerd is correct. My first bill was pretty large compared to what my subsequent bills have been, since it included a partial month and a full month. I just got it later than I would have gotten it with other carriers, is all.

        • kalel33

          Can’t anyone online spell “LOSE” correctly?

    • UMA_Fan

      Getting a bill ten days after setting up service isn’t too bad. It still likely wouldn’t be due until a few weeks after I receive the bill at the very least. Paying a bill a month after I set up an account sounds pretty reasonable to me.

  • AnthonyRyan

    i dont understand any of it to be honest

    • randomnerd_number38

      Check out my post below and please ignore the snark meant for the other guy :)

  • jimbojambo

    i dont want this company to be cheap anymore..it is very frustrating as a sales rep not knowing what direction this company is going!! i am drained and you the company need to pick what direction you are going in and god dam stick with it. this company sucks!!

    • randomnerd_number38

      I generally agree that T-Mobile needs to find it’s core values again, but the company doesn’t suck. But um, why are you bitching about this for this particular policy change? How does this minor change affect “what direction” the company is going? How does this change seem “cheap” to you?

      • yupisaidit

        This change affects us being able to SELL the “post paid” product where we make our money. What is the incentive as a customer to sign a contract to pay full price for your phone, and pay in advance. Might as well do PREPAID where we ultimately lose the customer profit and loyalty… and we make squat.

        • Freak4Dell

          Sounds like you have no understanding of what this change actually does (pretty much absolutely nothing important). Most customers probably wouldn’t buy from a sales person who is as uninformed as you appear to be, so you shouldn’t see any change in your sales.

        • yupisaidit

          I actually have won several awards for sales with this company and am clearly informed since I am reading the same information as you dingbat. You obviously are not a sales person though who understands this is our Paycheck.

        • Freak4Dell

          T-Mobile gives out awards for being a retarded sales rep? That’s cool, I guess. Most companies do rewards a bit different, but whatever.

        • yupisaidit

          Yeah, Your cool.. Hope you get your thrills from calling people retarded over a commment board. I’m sure you could do my job better than me too. Good luck with that.

        • Freak4Dell

          No thrills…I just call them like I see them. Maybe I wouldn’t be as good at your job as you, though, considering I’m a “dingbat” and all. Actually, nah…I think my basic reading comprehension skills would all but guarantee that I could manage to do your job better than you.

        • randomnerd_number38

          Fair enough, I’m not a sales rep. But I gotta say, I disagree. And about the whole paying for the phone in advance thing, are you required to push Value plans now or something? There’s still the Classic plan option …

        • T-Mobile sales rep

          They do require us to push Value Plans. Company wide Value Plans have to be at like 60%. And like Yupisaidit said our subsidies suck compared to Verizon, AT&T and Sprint. While I don’t think this will kill us it will hurt significantly. Our customers used to get a very small bill the first time plus their activation fees. Now they’ll be paying for a full bill + 35(x amount of lines) etc. T-Mobile customers go for value nothing else. I’ve never had a new customer come to T-Mobile for anything except saving money

        • RealityCheck

          You guys have to keep in mind that while you sit in a store and have a narrow view of the big picture (no offense, just the truth) and only know about how sales go at your store, and maybe some in your areas. Tmo has researchers and analysts that calculate this.

          While sales reps don’t see the back end of this, what happens is a sales rep is likely to setup a postpaid with the idea that the customer wont have to pay for at least a month and a half. Then , many customer don’t pay their first bill. Take the new phone that tmo subsidized, and sell it on amazon ro ebay or take it to another carrier, and then default on their first bill because by the time they get the first bill they cant return the phone anymore. Meaning a large revenue loss. The dealer doesn’t see this issue, because it is outside the buyers remorse, and we all know that sales agents don’t give a shit about customers once the buyers remorse period has ended. After all, cant cancel outside buyers remorse and still have any big impact on a dealers commission.

          So what tmo has done is try to set it up to be more up front with their customers, push it to make sure that people that really cant pay their bill are not starting service and then making a run to another carrier when they cant pay the first bill. (there are people that do this, and go from carrier to carrier in quick spurts) Instead those customers will get their first bill in time to cancel within buyers remorse. meaning tmo gets the phone back and can sell it refurbished, and can cancel services before customer has a chance to use those services that they are not paying for, meaning no wasted network usage or provided services that are not paid for.

          All sales people care about is how big their commission check is. I know first hand how uninformed and untrained in actual policy and big picture stuff the sales teams are. (If any sales rep wants to challenge me, Ill be happy to pose a few questions to you that I am sure you will get wrong). For example: Customer care agents get 8 weeks of initial training, then time on a training team with direct support, and then monthly trainings lasting hours, and time each day to review any policy changes, and team meetings on top of that to go over other issues, and weekly one on one meetings with their boss to review performance and quality test calls, and thats only a part of what training and instruction reps get. Other departments like tech, rsl, clt, etc may get more. Whereas a sales agent gets about 1/50th of that training.Mainly because sales reps need to be on the sales floor, and any time spent reviewing policies is less time on the floor selling. So a sales rep trying to convince me that his view of the direction a company should go in is more informed then the many others who actually know more about the company and the big picture….well that’s just asinine.

        • Lansky

          While i don’t agree with these “reps” comments on t-mobile’s direction as i don’t see whats the big deal with this change, i will have to disagree with you when it comes to us “sales people” not caring about deacts after buyers remorse. after the first 14 days (or 30 in some states) we still need to make sure the customer is satisfied and doesn’t deact on the first 6 month if not everything we made on commission on that sale is taken away on the commission for the current month. doesn’t matter if you activated that line 5 month ago that money is gone if the customer doesn’t stay with us for at least 6 month. on top of that the store has a “deact quota” if we surpass that amount of deacts on that month the whole store also gets penalize 15% off of commission even if you had nothing to do with those deacts.

          so while i do agree that some reps just care about their big commission checks..chances are that they’re not making any money at all if they don’t call their customers once a month and make sure everything is fine and dandy because god forbid they call customer care…but that’s another story on its own.

          just wanted to clarify that so that most customers have a Real idea of what we go thru and don’t think we’re just like car dealers and try to suck as much money as we can for our benefit…its just not that easy but hey i love my job :)

        • angelo

          ive always wondered how that works, seems tuff but glad that above all else you love your job..good to know theres sales peoples like you out there

        • RealityCheck

          There are good reps out there, and some stores that have policies in place to keep fraud to a minimum.

          However, there is a reason that store managers for branded and corporate stores, and development reps for indirects and other stores, have to call in past the buyers remorse period to cancel a line or change certain features or contract info or other things outside buyers remorse.
          This is because many stores get commission based on the buyers remorse period. Past the buyers remorse period they could care less.

          Now keep in mind that many stores have different policies, and your store, or region, may not be the same. This is why I made the point that many sales reps know only about what goes on in their store or stores nearby, but not in the broad picture. Take a look at the escalated sales requests policy the next time you access community.

          I could make a very long list about little tricks sales agents try to play on customers and on the company itself. T-Mobile, as a company, tries to keep things honest and up front and keep the “car dealer-like” sales agents from working for them. however, many agents find loopholes or tricks and exploit them.

          There are trackers on hand that tract this, and I have seen many reps, both in sales and in customer service and other departments, get fired for these actions.

          Some example of actions:

          When a customer wants to move a line from Monthly4g to Postpaid, many dealers will actually start up a new postpaid line with a new number, and then request a specific form to have their old prepaid number moved over the replace the new prepaid. They do this instead of following the in place conversion policy. Why do they do this? Because they get a commission for a new activation instead of letting the activations team take credit for a conversion. The drawback is that to do this a customer has to cancel their prepaid. Lose any funds paid to prepaid. Then wait for 24 hours while their prepaid number is moved over. The conversion process doesnt have these drawbacks. Not to mention that sometimes customers cant even keep their old number. So many customers have to start a new number because of the dealer trying to work the system instead of doing policy. This is especially difficult if the old number was a business number and it results in customers having to get new business cards and everything.

          Some dealers will also start a new line. Call in within business remorse, have the line cancelled, and the activation fee waived. They will then call in within a few minutes later and have the line turned back on, stating that the customer changed their mind about cancelling. They do this because many times the agent on the phone forgets to reverse the activation fee credit, and then they tell the customer they waived the fee in order to get their business.

          Other dealers may actually sell customers used phones that were opened up by other customers and returned, but the agent just did a factory reset and repackaged everything. Ive seen it happen. Its particularly bad when the agent forgets to wipe the sd card that was preinstalled and the factory reset doesnt reset the sd card, so the new customer, expecting a new phone, gets random pictures and files of some other customers. I have even seen this happen where an underage girl gets pictures of some guys junk on her phone,

          Some dealers will also tell a customer that they have to keep their old sim card. This is especially a problem with the new UICC sim cards that are required to upgrade the sim for wifi calling and other features. However, because many stores dont want to purchase a stock of sim cards from tmobile for their store, they will take the new sims out of customers boxes and actually tell the customer they have to take it and that the customer has to use their old sim card.

          You also get agents who will sell a customer a smart phone. Like the HTC Amaze. Which requires and internet feature to be on the account for the length of the contract. however, the dealer doesnt tell the customer anything about this data feature because it would ruin the sale. So instead, they sell the phone and the plan. Then call in the tmobile and tell the agent that the customer changed their mind on the smart phone and give the “new” serial number to replace the old one. This new serial number is typically one from a random box or even a demo phone. This causes the agent on the phone to have to remove the internet feature, without the customer actually returning the smartphone, and causes revenue loss for the company, and eventually higher costs for customers.

          You get the idea. This is why I hardly ever buy into the idea that a sales agent has more insight into the company than to make a sale, or cares enough to actually want to see the company do well. Most care just to get a big paycheck, and if the company fails, they can move on to a new company.

        • Dominicanfoxxy

          I think you are talking about indirect dealers. they,will do anything to get one over on the customers. my store in particular gets about 100 customers a day complaining about indirect dealers. sales reps make money on the features they sale so taking it off makes no sense. it just leads to a chargeback.

        • TMoNinja

          Actually, yes. We are required to push Value plans. They actually track our Value Mix in our metrics and we’re held to a standard. Classic plans have become a “no-no.”

        • JBrowne1012

          I do believe the point of t-mo doing all this is to get people to start realizing that prepaid is ultimately better and get hooked off of the idea of contracts i don’t believe there is any confusion after alot of the recent changes in the past year.. It has been pretty consistent if you ask me.

    • yupisaidit

      I completely agree. First lower our plans, then our pay, now punish our customers, and us sales reps in the process. You think we have enough reason to believe it will soon be “Prepaid Mobile” instead? Time for everyone to start looking for a new job because this company clearly doesn’t care about its customers and its employees.

  • http://twitter.com/wdfichtel W. Daniel Fichtel

    This won’t affect any current customers unless they (for some odd reason) choose to switch over, or do anything that requires a new account such as splitting a line off an exiting account. Rate plan changes will have no effect.

  • Get_at_Me

    The only way an existing customer gets migrated to this is if they: add extra lines beyond 5 (requiring a new ban or if they voluntarily wish to set up a seperate ban)….

  • taron19119

    looks like they are doing a lot hope that means new phone high end phones

  • http://twitter.com/timmyjoe42 tim bennett

    Prepaying for postpaid sounds like prepaid to me.

    • randomnerd_number38

      That’s just because you’re too simple-minded to get how this works. It’s okay, I understand. I’ll even try to explain.

      You get billed at the beginning of the bill cycle, but the bill still isn’t due until 22 days later. Extra charges during the month(roaming, paid app downloads, etc) still appear on your next bill. Prepaid means you don’t get service until it’s paid, postpaid means you’re billed and can pay after the fact. Hope you understand now.

      • randomnerd_number38

        “OMG this guy corrected me in a less-than-nice way! Time to -1 him and get a buddy to do the same!”

      • http://twitter.com/timmyjoe42 tim bennett

        Too simple minded? Get off your soap box. To me, it sounds like they are moving up the billing due date by a month. (Aside from the additional fees for overage, apps, and usage outside the plan.)

  • yupisaidit

    T-mobile is going downhill in a hurry people. Time to jump ship. When you get coverage like Verizon, Less drop calls and more products that appeal to customers like AT&T, then you can start making customers pay MORE for their service and devices. Customers come to Tmobile because they are tired of draining their pocketbook for cell phone service. I understand AT&T, Verizon, and even Sprint billing in advance because they offer great handsets, and subsidies to their customers to make it easier to sign up.So, Lets have our few “qualified” postpaid subscribers pay over $300 to get started with a phone in store, then hit them upside the head with a huge bill 10 days later. Great idea for a greedy corporation to line their pocket books. Yet another huge Fail for this company in the past year.

    • bobby

      ha. ”
      Less drop calls and more products that appeal to customers like AT&T”? Seriously? You think ATT has a better network. lol. I think someone owns an iphone lol.

      • Chris123

        I just left T-Mobile after 9 years because of poor signal. I am now with AT&T and very happy. My bill is postpaid not bill in advance

        • cellularcrazy09

          Actually I was with AT&T and they do the same thing! You are delusional.  They bill you for your bill cycle at the beginning of your bill cycle.  You bill is due at the end.  Any overage charges aren’t accumulated until the next bill cycle.  T-Mobile was the last company to bill you after your bill cycle was over.  Have fun on AT&T.  My wife and I used to call them SUCKULAR (cingular) back before they changed their name…

  • randomnerd_number38

    It’s startling how many people seem to think this a big change. If this seems so much like prepaid to you(even though the bill STILL isn’t due for over 3 weeks), why do you let other carriers get away with doing it and still allow them to be called postpaid? Expecting T-Mobile to continue business practices that landed them where they are seems illogical. You really think receiving 2 smaller bills instead of 1 huge bill at the start of service HURTS their value image? Mob mentality is scary.

  • 21stNow

    You said that most of the nation’s wireless carriers bill this way. Was AT&T the carrier that doesn’t do this? My last AT&T billing cycle ran from Mar 17th-Apr 16th. The bill is generated on April 17th and due on May 14th. That’s not billing in advance.

    • Freak4Dell

      I’ve never been an AT&T customer, so I can’t be absolutely positive, but I’m pretty sure they do bill in advance. Let’s say your recurring charges are $90. When that bill generates on the 17th of April, it’s charging you $90 for the cycle of April 17th through May 16th. However, if you happened to rack up any extra charges during the previous cycle, that will also be on the April 17th bill. So, say you racked up $10 in overages because you went over your data allotment on March 30th. Those charges will be on the April 17th bill as well.

      Like I said, I can’t confirm that AT&T does actually bill in advance, but they probably do. Sprint does for sure. I’m making these dates and numbers up because I don’t remember for sure, but the principle applies. I signed up for Sprint in October 2010 (it was actually many years earlier), let’s say on the 9th. So, on the 9th, I paid $100 for my phone, plus whatever taxes. Then, about a week later, I open my mail and see a bill for $90. So, that bill I just got was for October 9th through November 8th. Usually it’s due 20 some odd days later, so let’s say the 29th. I cancelled my Sprint account on January 7th, 2012. Because I was billed in advance, they didn’t send me a bill after I closed my account (I was let go ETF free). I had already paid for December 9th through January 8th with the bill that was generated on December 9th, 2011.

      With T-Mobile’s previous way of doing it, the only difference is that I would have received a bill on November 9th instead, asking me to pay for October 9th through November 8th, with the bill being due on November 29th. Then, if I had cancelled in January, I would have received a final bill for December 9th through January 8th, due on January 29th.

      • 21stNow

        I included the billing dates in my previous post to show that the bill is for the period Mar 17th- Apr 16th, so the example that you gave for Apr 17th-May 16th wouldn’t apply. My bill specifically states that no charges for any activity after Apr 17th are included on the bill.

        I have heard that some customers are billed differently from other customers, so that may be why my bill is different from the norm. I have no idea if this is true.

        • Freak4Dell

          Then it’s possible that:
          1. AT&T doesn’t bill this way,
          2. By charges they mean extra charges rather than monthly recurring charges, or,
          3. They now bill this way but you were grandfathered into the old way much like current T-Mobile customers will be grandfathered into the old way.

          There’s too many variables to be certain, and since I’ve never been an AT&T customer, I don’t know which one is more likely.

  • Pikachu

    One word, Flexpay

    • Bob

      keep in mind. flexpay customers were those that tended to be less likely to pay their bill, and therefore had a higher risk of cancel, delinquency, etc. Current postpaid customers are not that. Not to mention current deposit customers, which ahs taken the place of flexpay, as been doing well.

  • tmoEmployee

    They are doing this to get ready(financially) for the Iphone coming sooner than most people think.

  • http://twitter.com/Stylinson_4Life Larry Stylinson

    …. what happened to “print screen”….

    Why take a pic when you can just ss it…..