T-Mobile’s Subsidy Cuts Are Now Being Adopted By Larger Competitors

T-Mobile’s efforts to cut subsidies amid trim margins have often been looked at it with shrugged shoulders by the larger carriers, at least while they weren’t looking at the same slim margins as T-Mobile USA. Now, Both Verizon and AT&T, the nation’s top two carriers are starting to scale back their own cheap upgrade offers to devices such as Apple’s iPhone and other smartphones.

In the hopes of lessening handset costs, AT&T has doubled their upgrade fees to $36 for existing customers and lengthened the period customers must wait before receiving new subsidies on handsets. For its part, Verizon introduced a $30 fee in April for customers buying new smartphones and Sprint charges an $18 upgrade fee plus an extra $10 monthly smartphone charge.

So why is this a big deal for T-Mobile? It means that T-Mobile isn’t forced to compete with pricing on handsets, as is the case with the Galaxy S III which saw T-Mobile price their own model almost $80 higher than their nearest rival. So what was behind T-Mobile’s decision to hit that price point? Well, it all comes down to dollars and cents as T-Mobile is looking to support their existing margins which have led to costs from handset subsidies dropping 42 percent in the first quarter of 2011. Money that isn’t being spent subsidizing handsets can go back into the network and that’s a good thing for everyone.

What is often ignored by the consumer is the toll profit margins take on company’s bottom lines because of the losses taken on selling customers equipment with two-year contracts. Rest assured, those costs are passed on to you in the form of higher monthly costs, fees and data rates. The flip-side is that smartphones, such as the iPhone are very lucrative in the long run as customers begin to surf the web, email and watch videos which all leads to increased data plan sign-ups.

So what do you get with T-mobile? How about lower up front fees and lower monthly rates — in other words, your immediate costs as a T-Mobile customer are still less than that of their larger competitors, even with higher subsidy rates. The problem is how long can T-Mobile sustain this momentum of lower subsidies if the competition reverses their current fee and cost structure? If the tide suddenly turns against T-Mobile while customers are dropping by the quarter, it would pose a very serious problem for T-Mobile as they work to turn their own place around.

“T-Mobile is probably in the worst position among all U.S. players even if the overall market is getting better,” he said. “Are subsidy cuts sustainable? It only works if everybody agrees to it.”

The bottom line for the industry is they still have a lot of work cut out to explain why subsidies are bad for everyone, including the sticker shock for customers and the slim margins for the carriers. Just remember, higher subsidies equal higher pricing and lower subsidies equal lower pricing. I know it feels like a minority position, but I’d rather much pay more up front for the cost of the phone and pay less per month. How about you?

Business Week

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  • mearsfan07

    I’d rather pay less for a device up front.. I don’t mind a contract.i have to have the service anyway..and Pre-Paid is not a good option-the coverage is worse than post-paid, and you don’t get the same kind of plan options(most carriers don’t allow tethering on prepaid nor do they have visual voicemail)….

    So, bottom line, since i have to have the service anyway, just give me the phone cheaper up front(and NO mail in rebates)

    • Adrayven

      I was paying $110 /mo with sprint. I moved to Tmo and my bill went down to $51/mo with tax. That’s $600/ year in savings.

      Buddy. It’s not just a 2 year contract. Your paying double for that nicely discounted phone. ($1200) over 2 years. I’ll keep $600 of that for myself thank you very much.

      • eanfoso

        Very well said man! That’s the problem with most of these americans, such as the other day I went to a local best buy and asked for the price of a mobile, fucking moron kept giving me the subsidized price, besides, value plans are even cheaper than pre paid, with the benefit of contract customers, look up value plans mate

      • mearsfan07

        Um, you cannot compare just the top line price..  i’m going to assume you had the Simply Everything Plan, with the Smartphone fee.. ($99 + $10)..
        That is Unlimited everything. (Unless you call a lot of landline phones, you would be better off going with Sprint’s plan with 450 anytime minutes, and Unlimited mobile phone calling) that plan is $80… which also gets you unlimited text, and UNLIMITED data…
        now on T-Mobile data is not truly unlimited, like it is on Sprint…
        just sayin.

        • Adrayven

          Noooope.. It’s (450 min plan) $80+$10 smartphone fee ($90) then add TAX, that was easily about $10, then I had the warranty on phone.. came out to $110.. 

          For the UNLIMITED minutes, text, with tax and phone warranty ($4) I’m paying about $51… you should redo your math.. Sprint loves to nickel and dime you.. 

    • bob90210

      The cheaper phone is not cheaper. You pay full price for the phone (and more) through higher priced plans.

    • http://benpike.net/ Ben Pike

      You didn’t do very well in math did you?

      • Rob

         You must not have done well in English class.

    • http://ashn.myopenid.com/ Ash

       Must learn basic math….

    • mearsfan07

      I love how you all gloss over the facts…
       most carriers DO NOT give you a cheaper plan, that is comparable to post paid plans, just for paying full price for the phone.  For example, T-Mobile’s Prepaid plans have less coverage than their post paid plans, also the pre paid plans don’t allow for tethering or visual voicemail.. T-Mobile’s Value Plans still require a contract.

      • http://pharaohtechblog.blogspot.com/ Conan Kudo (???????)

        Monthly4G allows tethering with a $15/mo extra charge. I don’t know about Visual Voicemail though.

  • bydavidrosen

    just wait to start upping the up front price until after i get my new phone in the next month or two. i’ll accept the bigger upfront on my next next phone in 2 years…

  • bob90210

    Subsidises are bad deals for the consumers. They only benefit the carriers. With subsidized phones, the carriers tell you which phones to buy, where to buy them, and when to buy them. With AT&T, Sprint, and Verizon, they even tell you which plan you can have (try getting a smartphone without a data plan from them). Everytime there’s a post on this site about a new phone, half the comments are from people waiting for their accounts to be eligible for upgrades. If you have an unsubsidized phone, you can buy the phone you and upgrade whenever you want. You can buy the phone from the carrier, ebay, craigslist, or your grandmother. No need for permission from the carrier.

    • Dakota

      But for now the other carriers charge you the same expensive rates whether you buy a subsidized phone or not.

      • bob90210

        So don’t use the other carriers. They price the plans the same so that customers think they are getting a deal with subsidized phones. For those with their own phones, they pocket the extra for doing nothing.

    • duscrom

      You have that option even with subsidized phones. Except today I can get a GS3 for $280, not the $600 everywhere else. Heck, smart people end up getting the first one cheap, then trading up via CL or Ebay, that’s what I’ve been doing the last 5 years.

      And FYI, for CDMA carriers, you DO need permission no matter what.

      • bob90210

        Remember, the GS3 is not $280; it’s $760 ( initial $280 with $20 per month for 24 months).

        • tmorepsteve

          the galaxy 3 is 599.99 total. 200 up front and 20/mo for 20 months.

        • bob90210

          For Dustin, it is $760 plus tax since he’s on the classic plan (that’s how he paid the $280 initial cost). The $20 is the cost difference between the classic and value plan.

          But since he can sell the phone on ebay for $550 (and no tax) he thinks he is saving money.

        • guest post

          wrong.  At tmobile, it’s $199 down payment on value, and then $20 for 20 months..

        • eanfoso

          It’s actually 20 months man, don’t talk out of your ass

        • bob90210

          According to tmobile (http://support.t-mobile.com/docs/DOC-1681) it’s 22 months. So that makes two of us.

        • eanfoso

          Eh your link is broken I’m not sure what you’re showing, and I know this bc my girlfriend recenter got in a value plan, they financed her mobile for 20 months with no interest charge

    • duscrom

      Carriers aren’t forcing you not to upgrade… They are just providing you with a better option. 

      As I said in my previous comment, Even with a subsidy, everything you said is still possible, But all those people who are waiting for their upgrades is because they DON’T want to pay $800 for the new device.

      And… Yes, if it’s not a GSM provider, switching to a new smartphone they will still force you into a data plan.

      • bob90210

        You are not literally forced to upgrade but you’re losing out on $20 a month if you don’t.

    • eanfoso

      I got my mum a smartphone (mytouch 4g) and it doesn’t have a data plan it isn’t impossible, and yes this was a year ago when the mytouch first came out lol

  • http://blog.johnruble.net/ John Ruble

    Further, when you pay full price for a phone, you have much less reason to buy it from the carrier, and less reason to sign a contract.

    • Dakota

      but what does that get you on the other carriers.  Dont they make postpaid users sign a contract and pay full rates whether they buy a phone at full price or not.

      • eanfoso

        only verizon, ever since they killed unlimited data they have cut subsidies on mobiles

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (???????)

          Actually, they’ve increased subsidies with the Share Everything plans. Those add a line per month fees are nearly 80% subsidy.

    • http://benpike.net/ Ben Pike

      The Value Plan requires a 2 year contract regardless of where you get the phone…

      • http://blog.johnruble.net/ John Ruble

        Right, so that’s one of the remaining reasons to sign – because the most desirable plans (minutes, megabytes, dollars) are only available with a contract.

        Personally, I’d choose an inferior plan (minutes, megabytes, dollars) in order to stay contract-free – like Monthly4G or even a crappy prepay from an MVNO.

        For now, though, I’m sticking with my old “Even More Plus” =]

  • Bob

    I would rather pay more up front and pay less monthly.  Hell I’d rather buy phones full price off contract that worked all carriers. I know I’m dreaming.

    • http://ashn.myopenid.com/ Ash

       Galaxy nexus, works on all gsm carriers.

  • Dakota

    Expensive upgrade fees suck!  Its crazy.  Its going to keep making it easier for customers to jump ship to another carrier.  Isnt the rule in business that it costs you a lot more to gain a new customer than keep an existing one.  It seems no one does anything to keep customers – higher upgrade prices, longer periods to wait, and more expensive prices for loyal customers vs new ones.  I like Tmobile at least will lower your price if you bring your own phone.  Theres no incentive on the other carriers to pay full price for you rphone (exc Vz I guess that will let users keep their grandfathered unlimited plans).  But one of Tmobiles problems is still no iphone.  If they were releasing the new iphone next month with lower plan rates than the other 3, theyd probably get a lot of customers.  I also wish carriers would give new customers a month to try out their network..that might give more people a risk to try a company like Tmobile that they may not know anything about

  • duscrom

    This is a bad thing. No matter how you try to spin it. It depends on how the carriers HANDLE the reduced Subsidies. If I’m still paying more for a locked phone, you’re killing the entry for new people.Now, the way T-Mobile handles the subsidy is what makes it a little bit of a better deal. Cause they seperate it from the bill, so you know what you’re paying for, and at any moment, have the ability to pay off the device, for a reduiced bill.

  • http://twitter.com/PhoneDog_Aaron Aaron Baker

    Who’s that sexy gentleman in the picture?

    • Edy6401

      They are both sexy. I do think the blue shirt guy has sexier hair.

  • BigMixxx

    Meh…

    I’d pay an INCREASED subsidy price, if I can upgrade at will, but not TOO far over the ‘industry accepted’ subsidy price. (roughly 199 for devices that exist accross networks and 299 for those super devices).

    A perfect example, EVERYONE was selling the Galaxy S III for 199 except T mobile, who was selling it at 279 + the upgrade fee, that’s GOOD, if I could upgrade at the subsidy cost when I pleased.  It is NOT acceptable, when EVERYONE else was selling the device at a subsidy cost of 199 + upgrade fees if applicable.  This really hurts the consumer in the long run and turns them away from T mobile as the source for subsidized devices (Walmart is a GREAT place for upgrades…no frills)

    So my choice from now on?  I’m paying full price for my devices….With the premium device selection being limited RIGHT NOW (vs. where it will be by years end) it would be worth it to pay full price for the devices I want…

    • The_Guest_Who

      You got it.

      I pay for my devices upfront (Newegg, Negri Electronics, Expansys, Amazon), and resell them when I want something new to bring the price of my next device down.  Usually, my net cost on my “upgrade” is close to the “down payment” of a similar phone through T-Mo… and I still have the lower monthly plan cost to save me money going forward.

      Unlike VZW and AT&T, I upgrade when I want. 

  • Dell can suck it!

    When a competitor “Adopts a similar Business Practice ” and that practice negatively impacts 70% of the market place 210 million consumers it is generally called collusion.

    “anti trust ? WTF anyone?

    • MNBug

      Actually, when two or more competitors secretly 
      “Adopts a similar Business Practice”, that is called collusion.  

      When a competitor “Adopts a similar Business Practice” in an attempt to mimic or copy another company’s business practice, it is called the Free Market.

  • The_Guest_Who

    Subsidies have always been the tool of the carrier to get the “average Joe” consumer to buy into a service agreement.  Does anyone remember when those “bag phones” were well over $1,000 up front, PLUS a service contract (and metered per minute calls, at that)? It’s a short-term loss to the carrier to make a long-term profit on monthly service, features, and overages.
    ALL of the US carriers are now trying to defer subsidy costs – it’s just that T-Mo is more obvious about it (notice how many of you got peeved about the Galaxy S III pricing?), and will even reward a customer for taking the non-subsidy route with the Value plans.  None of the other majors are offering better prices for bring-your-own-device – they’d rather have you give them more money in the form of “upgrade fees” and time-to-upgrade-eligibility limits, along with keeping the monthly rate the same whether you took the subsidy or not.
    Instead of tying their advertising to “the fastest 4G network” (a dead-end campaign given VZW and AT&T’s network resources), T-Mo should be shouting their Value and Monthly 4G plan pricing advantage from the rooftops!  Point out that VZW and AT&T’s “upgrade fees” add to the cost of that new smartphone, plus you’ll continue to pay for the subsidy long after the handset is paid off.  Value Plans may have a heavy up-front “down payment”, but you can pay off the phone early and save monthly.

    • http://benpike.net/ Ben Pike

      They did… “2 lines with unlimited Talk, Text, & Web for $49.99 per line!”

      Then we get angry customers who don’t understand why they’re having to pay full cost for the phone…

    • LC

      I wouldn’t necessarily say that there’s a heavy up-front down payment, given that the down payment pricing on the Value plan is less than the in store cost on the Classic plan simply given that there isn’t a rebate to wait for.

  • Tmorep0

    A lot of customers are too stupid to do the math… There I said it.
    They’re looking at the short term and not the long term…Even though it’s cheaper, a lot of customers are offended that they (technically) are paying full cost for the phone – even though it’s interest free over 20 months AND it’s cheaper than the competitors who subsidize.

    • BigMixxx

       We like immediate gratification, thus the advent of the digital camera.

    • William D

      And what TMobile isn’t telling you is that very few customers are credit worthy of the equipment financing option, and those that aren’t worthy are put on contract, with less up front cost for a device than the first down payment of the financing option, as well as not paying more than $200 ETF, making the phone price actually LESS on contract if you breach it, than it would be on the equipment financing or “value” plan way.

      • LC

        I’ve worked with the Value plan since it was launched back last year and have never had an issue with a customer not being qualified for the financing.

        • LC

          And the down payment on the Value plan is always less than the in store price on the Classic plan. You pay less up front, and less month to month.

        • Aaron Tant

          Yes, LC.  William D is just uninformed.  It happens.  You, LC, are right on.

  • JB

    I’d honestly rather pay a higher subsidy upfront to have a lower bill in the long run… I was in the minority of people who were actually sort of okay with the Galaxy S III pricing… I suppose I’m okay with it because the great majority of the time, I pay full retail and avoid subsidies altogether so it’s pretty much a wash for me…

    Think about it: Like the article said, The other companies are charging 30-36 dollars for upgrades. Sprint you might as well say they are charging $28… T-Mobile? $18. If you’re on a Value Plan? $0…

    The problem is the upside of the T-Mobile’s model is not being sold/explained correctly. Though more than anything, consumers just don’t feel like doing the math.

    • BigMixxx

       you hit it on the nose ‘T-Mobile’s model is not being sold/explained correctly. Though more than
      anything, consumers just don’t feel like doing the math’

      • eanfoso

        true because customers are ignorant, stupid, and american (isn’t american the two before?) Lol

    • The_Guest_Who

      B-I-N-G-O…

      The Value plans aren’t that difficult to figure out, if you take the 30 or so seconds to work out the math.

      What seems difficult for most people to comprehend is that with VZW/AT&T/Sprint, you are still paying the full price of the phone, and then some when you compare them against T-Mo’s Value plan.  Your monthly rate drops by $10 to $20 once the EIP is paid off; on the other carriers, you keep paying the same inflated monthly rate… and the cycle begins anew when you get that next upgrade.

      I’m right there with you, JB – I buy my phones direct – and, if possible, non-carrier branded. The savings I get by selling my old phone (which non-branded/unlocked phones tend to get better resale), coupled with my monthly plan savings, means I can “upgrade” whenever I want.

      • JB

        Though I am willing to give some SOME slack on people who don’t understand how the Value Plan works, given that at first glance it can seem a little convoluted and confusing, but this is where the associate and marketing comes in… I think some need to be better educated on selling the Value Plan to customers… I shouldn’t be able to explain the Value Plan better than a T-Mobile associate (which was the case when my mom went phone shopping with me) What I don’t really see when I walk into a T-Mobile store (or online) are plain english charts that break down their plans vs the competition. Though I still put the larger blame on the consumer, because let’s face it, they see a “deal” at $199 vs $229 or $279.

        I’ve been out of contract since May, and I would be hard pressed to actually sign another contract again (at least for another 4 to 6 years based on my sparse upgrade cycle) because I like the freedom of not being tied to a contract (and saving money of course) Unless it’s a phone I REALLY want to keep, I do what you do: sell my phone, and get a new one. 

        More people should do this instead of signing a contract. If you can’t pay full retail up front, Just put some money aside every paycheck in a “Phone Fund” save up $600+ and buy outright. It works for me. Particularly when I buy more than two phones in a given year.

  • http://twitter.com/SParKlngCyaNide SparklingCyanide

    I rarely take the subsidy, I like to buy phones at full cost. Probably I take the discount every 3rd phone I get.

  • None

    Yet another reason to go prepaid. 

  • qpinto

    I buy my phones outright. Not locked into a contract and get then unlocked from T-Mobile. With devices like the sgs 2 and Sgs 3, I can swap to any carrier I want to, with post paid or prepaid. I tend to keep T-Mobile now due to WiFi calling when traveling internationally. However the $30 monthly plan sounds really good right now…

    I have been out of contract for 3 years. If i wanted To i could buy another device and sell the next.

    • Roger

      I would be really nice if tmobile could figure out how to make their wifi calling work on any Android phone (the majority of it is in place with bobsled).  At the moment they do very deep integration with the SIM card, which means the phone’s operating system has to be be modified to provide that access, so they are limited to only a handful of models.

      • qpinto

        if tmobile could figure out a way to do wifi calling from just about any android phone, they could potentially bring in a great amount of prepaid customers. customers bringing in their own devices + just charging the customer for the service = brings in a higher profit for tmobile. its a win win game plan. i would have bought nexus devices and brought them to Tmobile if they would figure out a way to do this. this means less devices for tmobile to order, get branded, and potentially make more money.

    • Roy Harrigan

      Really dummy? What carrier do you plan on switching to that is actually compatible with your phone?

      • qpinto

        you DO realize that the SGS 3 has the same bands as the GSM Galaxy Nexus. It can run on any network that uses the GSM technology worldwide.
        In the USA, i can use :

        Att
        Simple Mobile
        Straight Talk
        Pure talk
        Tracfone
        Net 10
        etc

        you dont have to be locked into a contract. buy a phone outright, get it unlocked and you can save hundreds of dollars over 2 years.

        for $30 a month at tmobile, i get 100 minutes, unlimited texts, and 5GB data.

        cost of phone sgs 3 16GB : 633 after taxes
        cost of plan monthly: 30

        cost of the phone with plan for 2 years: 1353. that comes to 57 a MONTH for a phone and service. tell me where you can beat that?

        • Roy Harrigan

          The 3G bands aren’t compatible. Never mind LTE…

        • Jarrod

          The SGS 2 & 3 have the PCS, Cellular, AWS, European 2100 on it so it is compatible with At&T and other 3G GSM networks in North America.

  • Bronze 6

    Verizon won’t be changing their price structure until they start hemorging cutomers. ATT will copy Verizon. And that leaves  Sprint. Sprint is the one we have to wait and see.

  • http://robert.aitchison.org raitchison

    The biggest threat to the subsidy model is Google and the Nexus phones, sure the Galaxy Nexus is a bit dated capabilities wise but it’s cost is relatively low (unless you get it from Verizon), the Nexus 7 demonstrates in no uncertain terms exactly how cheaply you can make a full featured tablet, with a phone being basically a tablet with a smaller screen and the addition of a cellular radio we’re pretty close to the public figuring out how much top-line phones really cost.

    I’m very curious to see what the cost will be for the next Nexus phone, I know it still won’t be priced reasonably and it will be more expensive than the Galaxy Nexus but I’m guessing it will be a top-line phone priced at least $100 cheaper than any unsubsidized phone of similar capability.  A few more cycles of this and the whole subsidy model will be completely toast.

  • Get_at_Me

    i use a sheet that includes eip into the customers monthly bill. this makes overcoming objections around phone payments alot easier. “adding in” the eip cost on top of the rate plan is not a good way of selling a value plan.

  • Gouv

    yeah… those upgrade fees on vzw and att ruin the upgrading fun that should be had for me!

  • AndroidProfit

    David,
    There are just way too many morons on this site that feel THEY ARE OWED a low cost for the phone AND low monthly service rates.
    These same cry babies probably treat every provider they deal with like this.
    They have a yugo budget with BMW desires.

    • Trevnerdio

      That’s not true, they just went with T-Mo because that’s what they claim to offer: at low cost phone and low monthly service.

  • Udubb

    Its not that people are “too stupid” to figure out the value plans, but more “is T-Mobile worth it?” They are the 4th place carrier with last place customer service and spotty coverage outside of major metro areas nationwide. Value isn’t just paying less money, its also getting the best service for your money.  For people that aren’t living check to check, paying a few hundred dollars more over a 2 year period is no big deal if you value having the best coverage nationwide or having the best selection of phones overall, neither of which T-Mobile currently provides.

  • Roy Harrigan

    You people are dumb! Buying unlocked phones in the U.S. is a waste of money. Phones are compatible between networks, and in the rare chance that they work, they’re extremely gimped. Big waste of money. By buying any phone period, you are locking yourself into a carrier.

    • Guest

       I just spoke with my Galaxy Nexus that I purchased from Google and it disagrees. I can use ANY GSM sim in my phone, but hey, proof is in the pudding.

      I live in San Francisco as well.

      • Savage1030

        Can’t argue with that!

    • chris125

      Your comment is so wrong. Phones aren’t compatible between networks(cdma vs gsm ) and even then sometimes gem carriers lines won’t work or will only work on 2g. Go do some research before you spout ignorance. And buying unlocked does not lock you into a carrier. Idiot.

      • Enoel69

        You are absolutely correct to point out his ignorance on the compatibility of phones and Networks  but WOW such an intense correction with the idiot at the end.

    • Jg

      Sir, please do your reach …if you buy a world phone, it has all the bands required to work on any carrier. However, in the US there are two types of networks, GSM(ATT & TMOBLIE) & CDMA (Veriizon & Sprint). GSM phone will not work on CDMA networks an visa versa. GSM phone are widely use throughout the world, very more than CDMA. So when you buy an unlocked GSM world phone ( that has all the bands) You can use on any carrier in the world. Now having said, there is a push for LTE, which will make things a bit more interesting and flexible.

  • TBN27

    I agree. That’s why i went with the value family unlimited plan. Don’t mind paying full price for my phone for a plan that is up to 60 bucks less than the other carriers.

    • Jg

      I do the same and pay full price. However, since we pay full price without a contract, then the phone should be unlocked and bloatware free ( or have the ability to remove them). If I went to the Sony store, I can buy the same device for less, unlocked and bloatware free. After all, you own the device, therefore you should be able to do  what you want with it.

      • TBN27

        I see your point. For me though, bloatware doesn’t bother me because there is enough space on the phones that i get yo do whatever. But if one is really disgruntled by having bloatware then there is nother bet than a nexus phone that is bloat free and U. I. free. And yes carriers should unlock the phones after the contract is up. It makes sense after you have fulfilled your contract duties and the phone is paid for.

  • Jg

    Sorry, but David, you must work for T-Mobile. What A load of BULL…. “Money that isn’t being spent subsidizing handsets can go back into the network and that’s a good thing for everyone.” . Let me tell you how it works….When someone upgrade their phone, they have to sign a 2 year agreement(which has $200 ETA), the dscount they are given on the phone is added to their monthly plan (and extra $20), multiple that by 24 month, and you see there really isn’t a discount, just an illusion that people have not been smart enough to fogure out. T-mobile just got 8 Billion dollars from the failed deal with AT&T!! Are you telling me that they don’t have money to invest,  Plus, didn’t tmo just sold off some of their spectrum!! and they out source all their call centers to india, laid off 5000 employees…… are you telling me they don’t have money. Wireless telephone companies are on the FTC top 5 most complained about industries for the past 8 years…the greedy just got greedier and they are trying to spin the illusion that its the customers’ fault … yeah ! right !! I really hope people wise up to this game played with us….. can you say SHEEP !!! bahhhh.

    • Guest

      Your argument doesn’t make sense. The ETF exists in any circumstance. How does that apply to wether or not the phones are subsidized? According to your math:
      $20 additionally per month on classic plans over a 24 month period = $480. Also, if someone picks a GSIII on a classic plan, which is 297.99 ( $329.99 + $18 upgrade fee – 50 MIR) before taxes.

      $480 more for service + $297.99 upfront for phone =$777.99  

      A value plan customer pays $20 less per month for service and spends 599.99 for the GSIII

      classic $777.99 > value $599.99 

      Where is the illusion?

      So you are aware, T-Mobile received $4 Billion in cash and roughly $4 Billion in spectrum. T-Mobile had to sell some inorder to raise money and free space to modernize the network. This Value concept was also implemented to raise money immediately. With customer on classic plans, wireless companies usually break even roughly 17-18 months after a subsidy has been provided. We all know TMobs doesn’t have that much time to wait.

      • Trevnerdio

        Not to mention a 2 year contract is actually 22 months, not 24.

        • Guest

          Two year contract are 24 months. Full upgrade eligibility arrives at 22 months. EIP payments last for 20 months.

        • Trevnerdio

          Ahh I see

      • therealmikebrown

        Value paln customers also get overseas call centers.
        You guys seem to love that.
        Besides that I have grandfathered data, 5gb for $20 on 2 of my 3 lines. They said I would need to change my data plan to switch to value, which in the end saves me nothing.

        • JB

          My mom and sis are on Value.. they have yet to get kicked to an overseas call center on a consistent basis.

          My brother is on a Classic Plan, he occasionally gets kicked to an overseas call center, as do I being on what essentially is a Classic Plan (Unlimited Loyalty) 

          I think it has more to do with call capacity, location and a little luck of the draw more than the fact that certain customers get certain call centers on a certain plan gets a certain call center… Maybe except the Monthly 4G customers… but I don’t know anyone personally that is on that plan to say for sure…

        • Jg

          They train the overseas people t speak like us so that we think they in the US.

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (???????)

          It wouldn’t matter. You can generally tell due to the call connection bridging. When you connect overseas, the call quality drops dramatically in most cases and the ringing sound slightly changes to indicate the change to a different telephone system.

          I can generally tell when I’m bounced to an overseas call center, and I can tell you it only happens during high call volumes during certain times of the day. I’ve planned my way around that, and I never get bounced anymore.

          FYI: T-Mobile has no call centers in Asia. It has a few Filipino call centers to replace the ones shuttered in the U.S. and for over-capacity purposes. That’s why the call interconnect transfer sound is so similar. If we were being connected to Asia, the call ring sound would change dramatically.

        • Joseph Tongret

          I have the very same grandfathered prices as you do for four lines, and 15% off in addition to those prices. For longterm customers like us, value plans aren’t the best way to go. However, for new customers it’s an excellent option.

        • Jg

          You are correct….about longterm customers. We are the ones being loyal and they give you very little, only when threaten to leave they step it up. Once they know they have you for two years, they’ll treat you how they like ! There is no loyalty from them to us. I filed a complaint with the FCC about this issue….

        • Joseph Tongret

          I’d say we’re on opposite sides of the table on this, as I’ve always received phenomenal customer service from Tmo, and they have far exceeded what my expectations ever could’ve been! I’ve been one of the fortunate ones, as I haven’t ever had any issues with them in my 10yrs tenure! I’ve seen the occasional billing error, but it’s always been corrected & they’ve always compensated me for any sort of inconvenience.

      • Jg

        Lets say you buy a phone that is $500, I can assure that TMobile cost is about $400 (maybe a bit less because they get volume pricing discounts), then they offer it to you with a $250 discount to entice you. Then they add $20 extra to you plan each month. So that is 500-250 =250. then, 20 x24=480. so, 250+480=$730 is the cost of your phone at the end of 24 months. Not to say, an ETS 200 added if you quite at 22 months, that would give you a grand total of $890 that they would get from you.

        Folks, all you have to do is take some time to do the Maths. People these days sign contract without reading them…don’t be rushed, take some time and read the darn thing.

        • Guest

          Your arguments are all over the place. I stand corrected after Davids post about the spectrum value, however this post show you made shows you don’t understand what’s going on. Add the numbers up and compare the bottom line. Whatever is less, that’s your solution.

    • TMOTECH

      Deutsche Telecom got 4 Billion Dollars from AT&T. T-Mobile got 4billion in spectrum. They are very carefully reinvesting that money back to T-Mobile. But don’t let yourself be fooled. With an Infrastructure as large as the US, 4Billion does not go a long way.

      • http://pharaohtechblog.blogspot.com/ Conan Kudo (???????)

        If they put that $4bn towards extending the 4G footprint to replace 2G only coverage, then it could go a long way. Many of these areas have few towers due to low population densities.

        However, T-Mobile is bleeding customers due to the lack of the iPhone, so T-Mobile has to compete on other fronts, forcing them to invest slightly unwisely.

        • Jg

          You are correct …however, to keep on driving sales, they need to change the technolgy…so that you have buy new devices (keep in mond that carriers get volume discounts when they buy a device). Notice that all the new phones now use Micro sims …the chip on card is the same size as large sim, just size of the card is a bit smaller. Now those people who have two phones ( I do) cannot buy a new phone an use the sim between phones….so you have get rid of all your phone with the larger sim. The main reason is because when you buy the new phone , they activate the new micro sim, rendering old larger sim unusable.

          As for the iphone…Steve Jobs made Apple sing in key, now they are a bit off key ! Don’t think iphone will help things, there are othe rbetter android and Windows phones on the market…. plus i hate that all the music you buy from Apple is DRMed…amazon and google there is no DRM. Anothe thing is that the iphone does consume more data usage. The verdict is not in as of yet about the next iPhone, let me see it first.

        • Guest

          Micro sim card adapter tray. 99 cents on Amazon. Problem solved.

      • Jg

        TMOTECH….thank you for breaking it down for those who don’t know. And as for you David…you were the one who reported it…I read it here on TMONEWS first and then on the other website. I understand you get overwhelmed maintaining this site and can’t rememebr everything.

        • http://tmonews.com David

          It was 4 billion in cash, and the approximate value of the spectrum was 1-2 billion, not 4 billion. Either way, the total valuation was 5-6, as it was stated all along, it wasn’t 4 billion in spectrum.

    • http://tmonews.com David

      Whoa, where are you getting your facts? Barnum and Bailey? 5000 employees? 8 billion dollars? T-Mobile sold off some of their spectrum? Ummmm.

      • Solomonzm97

        hey is that you in the corner

      • Joseph Tongret

        Oh David, please just give up trying to educate anyone on these views, there are apparently too many economic wizards in this forum for anyone to pull the wool over their eyes, lmao!

        • http://tmonews.com David

          A lesson I never seem to learn!!

        • Jg

          Seems that you are kept in the dark too !!!!   Read on and be educted about that darkness. All respects to you.

        • Joseph Tongret

          Oh yes wise one! Teach me your ways, lol!

      • Jg

        Yeah David, they moved all their call centers (all 5 of them) to india and asia, plus laid off a bunch of other staff……. come on David, you reported on this, what’s going on with you?  Btw, I lived near one of their largest call centers. The facts come from Dunn & Bradstreet….which is another competing circus to Barnum !

        • http://tmonews.com David

          They didn’t move ALL of their call centers to India, nor did they lay off the volume of employees you stated and it’s the fact that I reported this that I know you significantly over exaggerated these numbers and facts.

        • http://tmonews.com David
        • klrywuzhere

          I work in a United States call center JG. I assure you, I am an American. People call in every day and complain about outsourcing, I get it, I don’t like it either. I work in the top gen care facility, for the last year running. 7 call  centers were closed. I have said it before I will say it again. The name of this company is not Freemobile. It is a business and is being run as such. This way all of the call centers don’t have to be closed down.  In the end, being a legal adult in this country means you take responsibility for your bill and your own finances. For Tmo to be viable as a company, and to get back to where we came from, changes had to be made. This is in progress, but for some people it is about sticking it to the man. In America, you have lots of choices, this was yours. You still have one. I never want to see a customer leave, I do however, understand as a consumer, you have to do what is best for you, Tmo will continue to be innovative and try new things. Some of those things will work well, some won’t. 

  • http://twitter.com/eespinosa eespinosa

    I think that if they couple this with a pro-rated ETF, it would be more popular.  As it is, I am very happy with my Galaxy Nexus with no contract.

    • Savage1030

      Galaxy nexus is a fine choice for the smart consumer!

  • nd5

    Sorry David.  T-Mobile is #4 and hemorrhaging customers every quarter.  They don’t get to play like the big boys.  They have to take it on the chin and beat their competitors on price.  When they have an LTE network that reaches 99% of the US and they get first rate phones, maybe then they can start trying to raise prices.  In my opinion, this is a losing proposition.  They need to do whatever is necessary now to both entice new postpaid customers to come to T-Mobile and to keep the ones that they already have, and that means sacrifice margins until it almost hurts. 

  • chris125

    Get rid of the subsidy model all together and plans would go down in price. Look outside the US and see how the subsidy model drives up plan prices. If carriers don’t pay that they won’t charge as much

    • jmickelonis

      Yeah, no.

      36 euros (~$45) a month for 24 months gets you an HTC One S, Unlimited data/texts, 2000 minutes, and unlimited mobile 2 mobile.  Not sure how that’s driven up.

      The problem is mobile carriers in the USA suck.  They don’t know what they’re doing, and don’t know how to make money.

      • Trevnerdio

        Verizon has loads of cash to deal with. Partially because they’re basically a puppet of Vadafone, seeing as VZW is 45% owned by them.

      • CSR2

        In Europe networks only have to worry, normally of an infrastructure the size of michigan at most.  Thats why they can provide cheaper rates with phone discounts.  You have companies in the US trying to cover NY to LA think of all the money that is spent on the network, towers, data, so forth and so on.

        No other nation has close to the same amount of land as the US.  Its unfair to try and compare networks from other countries to ours.

        • TMOTECH

          Thank you for recognizing this point. Everyone always complains about how things are done in Europe and Japan but don’t understand that you can fit half of Europe in Texas. 

        • Joseph Tongret

          Eroupe is roughly 10x+ the size of Texas, oh spectrum genius! Please check your ridiculous statements before you throw them around.

          Edit: 14.62 times larger, math wiz!

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (???????)

          It’s fairer to compare T-Mobile Germany to T-Mobile USA, as they have the same number of subscribers. 

          However, T-Mobile Germany fits entirely inside Texas, which is because Germany is a much smaller landmass. That means that the network density is much higher, but at the same time, the absolute number of towers required is many times lower.

          This means that the operating and maintenance costs are lower for T-Mobile Germany than they are for T-Mobile USA, which has to cover one of the largest countries (by landmass) in the world.

          These cost savings get pushed down towards the consumer in the form of lower rates, even with subsidy. Scale it up, and you’ll see horrifically high rates. The fact that T-Mobile Germany sells for $45/mo for 24 months for a “free” HTC One S shows how fat the subsidy is. It’s probably at least half of that $45.

        • Joseph Tongret

          I’m looking at what plans would cost with paying full price for phones. If they’re giving the one s atnatno cost with that plan, there is $500 right there! The plans you’re quoting are VERY similar to US plans. They’re slightly cheaper & involve a completely subsidized device that we would pay usually $99 for, but your correct that in Germany the network is cheaper to operate & that rolls downhill to the consumer. However, it is undisputable that the carriers would be able to offer us a large savings if our devices were not subsidized. Subsidies are a great risk to carriers, so they are forced to make alot of that money back as fast as possible to make up for broken contracts.

        • TMOTECH

          I was being absurd to prove a point. Didn’t get out my calculator. Guess I should have busted out my atlas and done the math.

        • Joseph Tongret

          That’s very far off for being absurd, and one does not need an Atlas or a calculator to take an accurate guess, but it was well worth the laugh! I figured you were being sarcastic, I was just shocked at the extent since it doesn’t help your argument.

    • Savage1030

      Don’t think for one second your monthly bill will be reduced.

      • http://adamusprime.tumblr.com/niccagehead NicCage5000

        Reduced, no.  Go up significantly?  That’s the key.  My bill has been the same price for 4 years now (with unlimited data) because I don’t sign contracts and pay for my phones up front.  A contracted plan today would cost significantly more that what I’m paying.

  • jmickelonis

    So I’m supposed to feel bad that they have no idea how to do subsidies the right way and make money off of it all?  Boo frigging hoo.  They handle it just fine in Europe.

  • Brubaiwl87

     David I am in total agreement with you on this. Thinking long term is what this is doing which in all honesty most Americans are not doing these days. All people want is a free phone and the service provider to kiss there ass when an issue arises. I am in it for the long haul. Spend money to save money long term. And when I break my phone i am making payments on guess what, my fault! Im not just going to stop making those payments cause I don’t have the phone anymore. Try doing that to a car dealer ship. I wrecked my car I didn’t have insurance and now I’m going to stop making my payments that I am contracted to making! LOL. I hope those who think like this end up bankrupt so they cant be approved for anything not paid for up front.

    • Joseph Tongret

      I agree with you that ppl want their ass kissed & want something for free. Most ppl have no idea what profits are like compared to investments in wireless communications. Last quarter it was stated by Android Central that Att made $21 per month, per customer. Imagine the BILLIONS of dollars invested to make this $252 per customer, per year. But, many still won’t get it, and they’ll just see that number & begin whining that they should be charged $200 a year less, and Att should laugh their way to the bank with $52 in their hand. I have a friend(sort of) who I grew up with that complains all the time of corporate greed.He some how managed to be 33yrs old making somewhere along the linea of $8hr? This “old friend”, will watch them make his burrito at Chipolte(that I’m paying for mind you),and have the nerve to complain that they haven’t given him enough of this or that because of corporate greed, lol! I refer to this group with affection as, “dumb founded America”!

      • Spanky

        I have a very similar friend (he’s 2 months away from turning 33), except that he’s worked a total of about 2 months in the 15 years that I’ve known him. All he does is troll conspiracy theories websites and talks about how the government is out to get everyone.

        • Jg

          Their is no conspiracy…things are happening!  and the information is out there, if you willing to go an find it. A conspiracy means that there is a group of people planning something against you , without you knowing….trust me, you know, you just have put the puzzle together. Global finacial meltdown, wars in the middle east, strange illnesses, global warnig ( look into H.A.A.R.P  http://en.wikipedia.org/wiki/High_Frequency_Active_Auroral_Research_Program). Its out there!!

      • Jaymb

         I’m all for capitalism, but don’t act like At&T is barely scraping by after their BILLIONS in investment. Below is their earning for Q2:
        AT&T has announced its second-quarter results, posting revenues of
        $31.6 billion and income of $6.8 billion for the three month period. The
        company sold 5.1 million smartphones, fewer than the 5.5 million sold in Q1
        — but offset the drop by squeezing a margin of 30.3 percent from its
        existing customers. It’s also counted on less than 1 percent of wireless
        churn, due to the “premier experience” available on the network.
        Overall it’s now got 105.2 million subscribers, with 43 million of these
        using smartphones — an increase of 1.3 million in the three months.

        • Jg

          ATT is bit….they will probable send all their call center overseas , if they have not done so already. But have a much better renue stream than tmobile…they do cable, phone, wireless, coprate services ( data centers, cloud computing, both  local and international).  They just put out this lost to lower their stocks. What happens when big companies(that are string) lower their stocks….people buy them.

      • Jg

        You are dam right we want something for free !! have you ever stopped think about the hours we spend calling customer service, then to deal with their BS, which you have to call back in again for. Let me spell this out…WE are PAYING TMOBILE to do this to us…they are getting paid to sit there and take our calls. Anyone paying us for our time…NO !! did I mention that we are paying them for the stress and greif…..you are dam right I WANT SOMETHING FREE….I’ll never get my time back!

        • Joseph Tongret

          You have a choice, and no one made you sign a contract. Your here at your free will, and if you don’t care for the service its your right to take your money elsewhere. However, the grass is always greener, isn’t it? If you truly expect things for free, that makes it very clear that you have very little business experience or understanding. I’m going to go ahead and throw the towel in on this debate with you before it even begins, and without wasting any time or energy explaining business principles and management. So many ppl expect something for nothing, and this sense of self entitlement very much clouds the mind to the extent that they cannot grasp sensibility. Take note that the world is not going to hand you anything for free. All things must come at a cost. Have a great evening, and I do at least hope that your able to get in touch with a competent CSR at T-mobile who is able to resolve whatever this issue is that has apparently infuriated you. If they haven’t solved it to this point, I suggest asking for the retentions department as they have alot more abilities and say so to correct any issues, and they’ve always been able to resolve things for me.

        • JG

          Man you are so misinformed. That’s the sheep talk. These days we all need a cellphone, you don’t know how a company is going to be until you join it. Once you sign that 2 year contact , which they all have, then you really what the company is like. Btw, the way, i don ‘t expect somethi9ng for nothing, i expect to get what they said they would do and the SLAs. I don’t want to pay 100% of the bill for only 80% of the service.

        • Joseph Tongret

          I believe your the misinformed inexperienced one. I’ve told you I won’t get into this debate with you, because based on your outlandish and erratic comments, sensibility would not be part of it. Have a great day young man:-)

  • Joseph Tongret

    I think Tmo’s subsidies aren’t out of line. So many ppl only look at the price next to the phone, and they don’t do the long division! Tmo is the only carrier to offer lower rates when you bring your own device, at least to my knowledge. This is business, and business must be profitable to succeed. I personally appreciate the service that Tmo provides me with, and I feel like they give me an amazing deal! The US is the only country in the world with the subsidized phone gimmick, and I honestly would love to see it gone! So many ppl would be whining about not getting their Galaxy S3 for $200, but I’m more concerned with my monthly costs, then what I have to spend up front. I buy several phones a year, so I’d be spending a chunk of money any way you look at it, but i have four lines & my monthly bill would drop so drastically if based on similar pricing as compared to Europe, and I’m sure I would come out very much ahead financially.

    • Savage

      Subsidies are the only way to put you in a more costly plan. They are not going away.

      • Joseph Tongret

        Well, Tmo has voiced that they’d like to see things conducted similar to the way carriers do in the rest of the world. If subsidies don’t go away, it’s because of the cry babies who couldn’t imagine paying $700 up front for a phone! Most of the ppl who can’t afford it, are the ones who are crying about what carrier will give them the phone they want a little cheaper, with absolutely no regard as to how much that phone will cost them in the long run. This is a classic case of Americans wanting instant gratification! Here in the US that’s all we seem to care about, and these contracts are nothing more then a gimmick. Most ppl won’t even do the math for how much a plan will cost them, all they’re interested in is how much will they pay today! Then they’ll be the first ones to point the fingers and say they’re getting screwed, all because they anxiously signed a contract, just to get their hands on something they normally could’ve never afforded! Oh wow, ppl make me laugh, lol! ;-)

    • Savage1030

      What planet do you live on? Your bill would drop dramatically! Subsidies might go away now but your bill is not going to get any lower.

      • George Thomas

        Yes it will eventually.
        TMO will always be a value leader compared to the big boys in the wireless
        industry. If TMO doesn’t have to spend money on you by subsidizing your next
        phone purchase, they make money on you faster. Most people don’t know this, but
        carriers usually don’t see profit from a customer until the 11th month of a
        contract. Hence the reason that all carriers have 2 year contracts instead of
        the good old days of 1 year contracts. If they don’t subsidize you, they see
        profits faster and you see savings on your monthly. Enter the Value Plans. All
        carriers should do this and just get rid of subsidizing phones. My plan
        currently costs me $180 for two lines and 5gb of data per line. If I switched
        and I will, to the Value Plan, I pay $130 a month for the same plan. That is
        $50 a month savings. $50 X 24 (length of contract) = $1200!! Huge savings.

         

        Basically buy phones at
        full price from an outside source like Amazon, EBay or Google. Or wait till TMO
        drops the price of the full cost. Save up your money now for your next phone.
        You will be happier in the long run. And make sure to take advantage of sites
        that offer trade in deals to recover some of the money you are going to spend.

         

        • Joseph Tongret

          100% accurate Mr. Thomas! When feature phones were subsidized,the carriers weren’t losing much, so one year contracts were profitable. Smart phones on the other hand are EXTREMELY costly to subsidize! Tmo has been burned and bleed money so many times on these cheap, worthless jerks who sign a contract to get a highend phone at a price they can afford on their minimum wage, and that is why we now see the infamous mail in rebate! That way if they bail out after the first month or two, so they can take their phone to Straight Talk, they have at least minimized the loss! This is apparently all too much for many ppl to understand?

        • http://weevil.myopenid.com Weevil


          Basically buy phones at full price from an outside source like Amazon, EBay or Google. ” Just remember that to utilize wi-fi calling, you still need a TMO branded phone. As of today the Galaxy Nexus, for example, doesn’t support wi-fi calling.

        • George Thomas

          Even if you need wifi calling, you can still find TMO branded phones on several sites that sell it cheaper at full cost compared to buying it from TMO directly. The value added plans work for me because the way I look at it, the $1200 I save throughout the life of my contract. I can spend it on phones. Which I plan to do. So the less I spend on phones the more of that $1200 I get to save. 

        • Spanky

          “If TMO doesn’t have to spend money on you by subsidizing your nextphone purchase, they make money on you faster. Most people don’t know this, butcarriers usually don’t see profit from a customer until the 11th month of acontract. Hence the reason that all carriers have 2 year contracts instead ofthe good old days of 1 year contracts.”

          Then why is there a 2 year contract on Value Plans?

        • Joseph Tongret

          I have one more thing to add to what George is saying here. Just try to imagine the the total overhead Tmo has hanging over them of devices that they have subsidized, and have not yet recouped the losses on yet. As soon as they recoup that money from one customer account, then there is another account upgrading to add back to that overhead, so this figure probably never changes too drastically! This means there are a great deal of funds always tied up, and while most profitable businesses require overhead, a great deal of it would be eliminated if we rolled over to the no subsidized plans. It’s natural for us as consumers to want as much of a service or product as we can get at the least amount we can get it for. However, very seldom do we think of it from a business perspective. If we want the product or service that we like and enjoy so much to remain available & also improve, then we must not get too greedy! I said it above, and I’ll state it again, I love the service that T-Mobile provides me at the prices I pay! I feel that I’m just as much a customer of Tmo as I am a patron! I really want to see them thrive as a company, because in my individual situation they have earned loyalty from me by always providing great service and support. I’m probably in the minority by feeling this way, but they’ve always treated me very well & gone above and beyond to keep me as a customer, even when above and beyond wasn’t necessary.

      • Joseph Tongret

        Take a look at what plans would cost you in some European countries, then come back to this conversation with half a clue, and see if you can contribute something useful. Thanks Bud(wink)

  • Savage1030

    I can’t wait to see verizon and at@t monthly plans go down in price now! Are you f’ing kidding me?

    • TMOTECH

      I doubt that will happen. Why would they? They have 80% of the market wrapped up and gain customers every quarter with higher rates.

      • CRT24

        It’s already happened unfortunately. Verizon’s new plan is much less than their previous offerings albeit shared data for family plans….. the risk is still there for overage but the starting prices especially for family plans are very close to classic plan prices. You still can only have unlimited lines with Verizon but if you compared t-mobile’s plans with unlimited lines 3-5 on classic the t-mobile would actually be more than Verizon…..never thought I would see it

    • Mr_kuntri

      I just switched from TMO to Verizon .. there new Shared data plan is Ok.. it’s Ok for me b/c my wife uses the Ipad to surf, facebook, wwfs, etc.  only thin she does on her GNex is talk + text.plus i restricted all background data.  

      I pay about the same price with TMO Classic vs VZW Shared Data  ( +25% Emp Discount )

  • http://cogizio.org/ Jeffrey Borcean

    This is why I love T-Mobile and recently made the switch back to them from AT&T.

    Their “Value Plans” (A.K.A. Bring your own device plan) don’t have ANY handset subsidy, but have significantly lower monthly rates.
    I’ve always purchased my smartphones unlocked and off-contract and T-Mobile rewards you for doing this.
    My data plan of 2GB costs me only $10 per month on their Value Plan, but if I were to get a subsidized phone on their Classic Plan the same 2GB of data would cost me $20.

  • Dusty

    We all want to feel that we are getting value.  If we have lower handset subsidies, thus higher upfront cost, we don’t feel we are getting a value.  Conversely, if upfront pricing is low, it don’t matter that our neighbor paid less upfront for his devices, if his monthly rate plan for comparable or better service is lower, we get angry that we are being ripped off.  Now for those that say save up, try that with your new car, your house, and see how far you get to owning one.

    • JB

      Saving up for a phone is massively different than saving up for huge ticket items like a house or a car… You can’t even compare the two.  Unless you’re talking about saving up for the down payment for a house or new car, in which that is entirely feasible… That’s why we have things like savings accounts and piggy banks. It’s called being fiscally responsible.

    • http://adamusprime.tumblr.com/niccagehead NicCage5000

      You’re going to compare saving up $600 for a device to saving up $10K – $30K for a car or home down payment?  Ok drama queen.

      It doesn’t take a lifetime to have $600 in a coffee can.
      And yeah, some people will argue that a lot of people will put it on credit and end up paying more in the way of finance fees anyway.  But that’s their decision.  IT could be argued that the could pay off the credit balance faster by being able to control the payment amount and still have lower monthly cellular bill.

    • 21stNow

      I didn’t understand the car and house comparison, either.  The price difference is too great for this to be a valid comparison.  I can easily buy a phone without a subsidy or credit cards.  A car would take discipline on my part, but I could do it.  A house (normal price, not foreclosure/auction) would be out of the question for me.

      There are people who buy cars and houses with cash, though.  It’s a matter of prioritizing, fiscal planning and discipline.  I hope to get there one day, myself.

  • therealmikebrown

    I would pay full price for the phone, if my plan were cheaper.
    Instead we are getting less for more, unless you hang on to an old grandfathered plan, which they will try to switch you from unless you are careful.
    T-Mobile is raising prices on the phones and the plans.

    • http://weevil.myopenid.com Weevil

      Have you heard of the TMobile VALUE PLAN? Makes the most sense for family plan customers. You pay FULL (un-discounted)  PRICE for the phone (or buy your own phone) and pay MUCH lower monthly bill.

      from slickdeals.net:UNLIMITED MINUTES WITH DATA VALUE PLAN:add $25 for 3rd, 4th, 5th each for unlimited talk. Add $10 for 3rd, 4th, 5th each for 2GB high speed. Add $25 for 3rd, 4th, 5th for 5GB high speed, $10 per line mobile to/from mobile (skype, google voice is not consider as mobile)

      5 lines for $100: (2 unlimited talk/text/data with 2GB at 4G) + (3 lines unlimited text, 500 minutes each)

      • therealmikebrown

        1. Those plans are not better than what I have. I have 2 lines with 5gb of data. I use at least 4gb every month.
        2. I don’t need unlimited talk, my whole family only uses around 500 mins. a month.
        3. They will also charge me full price for the phone, if I spread it out that’s $40 more dollars a month for 20 months. Me and my wife both have a smartphones.
        Those are not cheaper, grandfathered classic plans always win. Which is my point. I get cheap phones and my bill statys the same as it would if I switched to value and paid full price for my phone, no thanks.

    • http://profile.yahoo.com/BYQ7XT7YGY7QKHO2GZHNCEPUHQ Shane

      you mean like the value plans they rolled out 2 years ago that noone signed up for?  Even though they proved cheaper at the end of the 2 yr period?  They tried it, ‘merica doesn’t think rationally when it comes to dollars and cents.   They are willing to pay much more over 2 years if it means you pay nothing today.

      • Spanky

        I don’t think that it’s necessarily the lack of rationale. The only way I would sign a contract is if I subsidy was offered to me. If I’m paying full price for a phone, why should I have to sign a 2 year contract? T-Mobile wants to have its cake and eat it, too.

        • Chris

          You can always put the phone on EIP if you can’t pay it full on that day. The point is you get much lower monthly on the Value Plans. So if you put the phone on EIP and pay it off in 3 or 4 months. Your still in a better shape than you were when you have your classic ‘subsidy’ plans.

        • Mj73

          Actually that isn’t his point at all.  Spanky has a good point.  If the value plans offer no subsidy, why can’t they be offered month-to-month? Why must I sign a two-year contract if there is no hardware cost to the carrier?  Tmo is trying to have it both ways – no hardware profit loss, and a guaranteed revenue source at the expense of the customer.  

          Also, certain grandfathered plans are still better than what I can get with the best value plan, like mine from 8 years ago that I cling to and fight tooth and nail to keep – even though I still cash in a subsidy every 24 to 28 months or so (think 1000 minutes, unlimited text and data for under $55).  The closest value plan is the 2GB data, and I always go over that data amount, and never come close to my max minutes.  

          Although I’m still saving money over non-subsidized plans.  The day I lose it, I’ll likely switch to the value plan and start buying used phones exclusively.  After all, the person who used a subsidy at full contract price has already suffered the (artificial) depreciation for me.  I can buy a year old device for $200-$300 with no contract.  I do this every other year than when I have an upgrade credit as it is, and stay in a fairly new phone all the time.

        • Spanky

          My thoughts exactly. Not too long ago, T-Mobile used to have the Even More Plus plans, which were essentially the same as the Value Plans, except no contract was involved. A contract and an ETF is just another way to discourage the customer from leaving, regardless of the fact that no device subsidy was involved in the transaction. T-Mobile is hemorrhaging contract customers, and the implementing 2 year contracts for Value Plans is just a Band-Aid to slow down the bleeding. Yes, the savings are there. However, signing a contract in exchange for nothing in return is NOT a good deal. I’m well aware that the contract doesn’t renew after the first 2 years (as long as you don’t change anything about your plan), but it’s still unreasonable.

          Prior to leaving T-Mobile, I had a 2-line grandfathered plan (1000 shared minutes, unlimited SMS/MMS, 5 GB of data on each line) for $130/month. The same Value Plan would cost me $110/month, resulting in $480 savings over a 2 year period. My wife and I upgrade our phones to the latest and greatest as soon as we are able to, and the $480 that we’d save wouldn’t even cover one phone at full price. As such, it makes sense for grandfathered customers who like to upgrade their phones to keep their plans.

          Bottom line is this – the Value Plans are only good for individuals who don’t mind holding on to their phone for more than 20 months. Since the typical installment payment plan is 20 months, the monthly cost of the Value Plan during that time will be equivalent to that of it’s Classic Plan counterpart. In other words, the savings only begin when the plan enters its 21st month. Since Classic Plan customers are eligible to upgrade after completing 22 months of service (and I believe that most do), the savings really aren’t that great in the long run.

        • bob90210

          If you upgrade frequently then value plans are good also. On classic plans you lose money (pay more then you receive) on upgrade unless if you upgrade exactly when you’re eligible. 

          Value plans are also good if you buy used phones. You can buy a used phone a few months and pay a lot less then a new phone.

          Value plans are also good if you upgrade without the installment plan regardless of when you upgrade since the contract will not be extended.

        • T-Mo employee

           month to month postpaid plans are a bad idea, they increase postpaid churn numbers, no carrier wants that.

        • Spanky

          You’ve missed my point. If I walk into a T-Mobile store with $600 in cash, purchase the phone outright and sign up for a Value Plan, why should I have to sign a 2 year contract?

          Here’s another interesting point. T-Mobile has always stated that an ETF for breaking the contract early is not a penalty, but a way for them to recoup the device subsidy. In that case, how do they explain an ETF for a Value Plan? If a Value Plan customer is using EIP to pay for his/her phone, then the remaining balance of equipment cost will be charged in addition to the ETF. Everyone complains about VZW/AT&T fees, but T-Mobile is really no better.

        • T-Mo Employee

          if you have the $600.00 to spend up front, why would you sign for the value plan? just sign up for the monthly 4G. if you want that $600 phone, but don’t have the full amount up front then you sign for value with EIP. it’s very simple actually.

        • CRT24

          If you need a family plan…that’s why

        • Cory Corrupted

          Or insurance! The Monthly 4G plans don’t have that yet.

        • T-Mo Employee

          Yes they do, it’s $7/month.

        • Darkwingduck0429

          Even paying upfront for the phone being on a two year contract yields better benefits for the consumer. Handset protection is now offered for prepaid plans but the consumer has to send their phone into the manufacturer and wait to have it evaluated and replaced. This process could leave you without a phone for over a week. With contracted protection you get next day service via UPS. Second, is access to Customer Care. With monthly4g your calls will be out sourced to India where the majority of Contracted customers will deal with reps here in the United States. Let’s not forget about the Advantage Discount Programs that give you a monthly discount on your bill that prepaid customers do not get. Oh, and then there is the issue of call priority which all major carriers use. Prepaid gets to fly coach while contracted customers enjoy a more seamless experience. So, if you’re willing to pay more upfront and in a lot of cases more monthly for a prepaid account then be my guest, there is always going to be someone willing to pay more for less. Just to prove they can while we all set back and laugh at them.

        • Spanky

          There is absolutely zero consumer benefit in signing a 2 year contract when said consumer purchases the phone outright.

        • JB

          Spanky, I do know where you’re coming from. If I bought a phone outright, I shouldn’t be suckered into a contract, but at the same time with the value plan, you’re pretty much paying for the option of EIP among other things. So if I have an option of wanting to pay off a phone in monthly installments, with zero interest then ABSOLUTELY I should be bound to a commitment. For those who don’t, that’s why they have Monthly 4G…

        • Spanky

          “if I have an option of wanting to pay off a phone in monthly installments, with zero interest then ABSOLUTELY I should be bound to a commitment”

          Not if T-Mobile charges the ETF in addition to the remaining EIP balance (which it does).

        • JB

          However, as far as T-Mobile’s ETF’s are concerned, you’re still coming out on top, being that their ETF’s are MUCH lower than the competition.. at whatever point you decide to cancel service.

        • Spanky

          Regardless of whether or not T-Mobile’s ETFs are lower (they certainly are), they shouldn’t be there to begin with for unsibsidized plans. It’s unreasonable and inexcusable.

        • Spanky

          In the interest of full disclosure, I am a former 7-year T-Mobile customer who transferred his service to AT&T due to an ongoing data issue to which T-Mobile decided to turn the blind eye.

          Handset protection is of no interest to me. I got my first cell phone in the summer of 2000 and have never had PHP. With regards to access to customer care, take a quick look at T-Mobile’s support site and countless complaints from postpaid customers regarding outsourced customer service.

          There’s no need to be an apologist. If you’re happy with T-Mobile, great! However, I firmly stand by my opinion that requiring a 2 year contract for Value Plans is just another way for T-Mobile to control the churn. There is no justification whatsoever for a contract (and the ETF that comes with it) when no subsidy is provided.

  • http://weevil.myopenid.com Weevil

    You gotta look at the total cost of ownership over x number of years, usually two, the term for a typical contract in the US. Prepaid should also be considered. TMO has less national coverage compared to Verizon and AT&T, so they can’t charge Verizon rates. TMO offers lower total cost of ownership and Wi-Fi calling, so if a signal is not available or of low quality, wi-fi can be used to place and receive voice calls. For people that  live in in good coverage areas, which includes most metropolitan areas, TMO can be the among the lowest cost options. TMO also offers “free” roaming – with limited data roaming, but ymmv, and roaming can change dramatically (usually for the worse) over time.

    TMO is facing competition from the bottom – Cricket, Simple Mobile, etc. The biggest game changer is VOIP. Wireless companies and plans as we know them today may not be around for much longer…

  • http://adamusprime.tumblr.com/niccagehead NicCage5000


    but I’d rather much pay more up front for the cost of the phone and pay less per month. How about you?”

    I have been saying this for 2 years now.

    I also cannot stand how people think their phones are only worth $200.  Contracting and subsidies have successfully devalued the hardware from the consumers POV.

    • Joseph Tongret

      Amen! Nothing to add, because you hit the nail on the head about how devalued our $600+ devices are here!

  • http://profile.yahoo.com/A43V4QKWIR2CPD3QF7GMLQ2GYE bumrocky

    “I will gladly pay you Tuesday for a Hamburger today….”

  • fixxmyhead

    meh i always buy off contract. damn u cheap ass people

    • bob90210

      Paradoxically, the cheap people end up paying more.

  • GwapoAko

    Yesterday I went to a Tmo Store in the rep was explaining to a guy the Value Plan vs the Classic Plan and he explained it very well!. I just wish they have their comparison or a table that shows the cost and savings when they explain it to a customer :0) Go Tmobile!!!!

    • http://cendigital.com/ Nick

       I can’t wait to get my value plan in November, all you have to do is some “really” simple math and it’s a way better option.  It’s kinda sad really.

  • GinaDee

    It’s a lose lose strategy for T-Mobile.  They will be slaughtered next month when VZ and AT&T sell the newest and most popular iPhone yet for $199.99

    I’ve said it once and I’ll say it again.  Customers will pay more per month if they get the hardware cheaper up front.  It may not make sense but it doesn’t have to. That’s just the way American’s do business.  

    AT&T for example hides the extra fees by tacking the activation fee to the bill instead of attaching it to the hardware.  

    • adim

      Did you read the article? Its less upfront, and less per month!

  • Joseph Tongret

  • Joseph Tongret

  • Winski

    Buh…bye..

  • Justlee7

    I was with you until this part:

    “What is often ignored by the consumer is the toll profit margins take on company’s bottom lines because of the losses taken on selling customers equipment with two-year contracts.”

    Of course consumers ignore that. Consumers don’t care about a companies bottom line or profit margins. Consumers look out for their own best interest, not the companies, and that kind of mentality is what drives people to a better deal with a different company.

    I am a T-Mobile subscriber, and mainly because they have the best deal on plans. If T-Mobile goes above one of the other carriers, you bet I’m going to consider moving to someone with a better deal. Loyalty is only good as long as it benefits both parts, and when it doesn’t, then both the company and the consumer will look out for their own best interest.

  • Enzowned

    That is a great point that I did not see before. The fact that you’re signing up for a 2 year contract with no subsidy. We should get something in return right? – I get this argument, and sure it mostly benefits Tmo, however…

    I don’t care. It’s still the best alternative for me. I have to pick what has the most value at the end of the day right? So they’re screwing me a little, that’s still better than getting screwed non stop on the bigger carriers. If you do the math, I’m saving way too much now on the value plan, It allows me to splurge on a $600 phone if I want to. However I’d rather buy a 1yr old device at $100-200 price, and save that much more. Note, I am saving $90 a month by switching from AT&T. That’s over 2K in 2 years. 

    Oh, and I thought of one benefit of being post-paid and on contract that you don’t get with prepaid (even though in a family plan, value plan comes out cheaper than prepaid for me), that is free mobile to mobile. Calling other Tmo users is free, I don’t think you get this with prepaid. With prepaid, every minute counts correct?

  • Edy6401

    Dude, that was rude. Keep those comments. To yourself. He’s a fine looking guy. That’s it.