(Update) Editorial: Dear T-Mobile, Your Value Plan Pricing On The Nexus 4 Isn’t Cool

Editors Note: After writing this editorial based on less than perfect information, a new post is available to try and explain why the fault lies with LG, and not with the carriers. You can read that post here

I hope I don’t offend anyones sensibilities, but as I took some time to sleep on the Nexus 4 announcements after spending the better part of yesterday just keeping up with the news, I realize T-Mobile’s Value Plan price on the device sucks. There’s no polite way of saying it, at the end of the day you’ll pay $499 (after your down payment of $199 and 20 monthly payments of $15) for a phone that’s available on the Play Store for $349. That means you’ll pay  roughly 70% of T-Mobile’s price by purchasing it directly from Google. Given that the phone appears to be the same hardware, including HSPA+ 42Mbps connectivity, I can’t imagine why anyone would use T-Mobile’s Value Plan on this particular device?

I’m a T-Mobile champion, you all know that and a staunch defender of the company, but this is one instance in which I think the company is making a bold move, that’s very, very wrong. I can tell you with confidence that T-Mobile is moving to a Value Plan future (more on this later) and that a new-ish rate plan styles is on the way. No new rates dollar wise, but a way of combining Classic and Value plans onto one account to help migrate customers over to the Value Plan life. In many cases, Value Plans are a great offer, especially if you are bringing your own hardware. Even if the case of a non-Nexus device, Value Plans can still present a huge savings over the course of a two-year contract. Just not this time. This time, T-Mobile is making the wrong move and at the end of the day, Value Plan customers will get the short end of the stick. If you’re on a Classic or Legacy rate plan, the subsidized pricing on the Nexus 4 makes a lot of sense. If you’re a Value Plan subscriber, do yourself a favor and buy the Nexus from Google, your wallet will thank you. At the end of the day, choosing the Value Plan method will really come down to deciding if breaking up payments is easier for you economically, and in that case it’s an easy decision.

I’ll end this simply and say its possible T-Mobile could change their pricing between now and the release of the device on November 14th, but given our information as of this writing, the Value Plan offer is woefully overpriced. If you really want the Nexus 4, and you want it on anything but a Classic/Legacy Plan, get it from the Play Store, that’s the easy solution.

The full details are as follows:

  • $199.99 down payment, and 20 payments of $15
  • $499.99 is the full retail price
  • Also, the $199 on Classic is after a $50 MIR.

 

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  • UMA_Fan

    The worst option is clearly the Classic Plan subsidy. On a Value Plan by paying the $200 down payment you are paying less upfront than buying from Google Play and with the $15 installment payment you are coming up $5 cheaper for 20 months over the Classic Plan. (Then you would save even more because the phone would be paid off.)

    Buying from the Google Play store and then going to the Value Plan would be the cheapest option in a full 24 month period but most expensive upfront.

    So if you’re eligible to switch to a Value Plan without migration fees that’s the way to go. There’s no point on taking the Classic upgrade. You save on the Value Plan whether you buy the phone from T-Mobile or not.

  • noelsito

    Well I guess they might be doing this because Google is hardly making a profit from the Play Store sales right, so with T-Mobile there is some sort of profit? Just a thought.

  • Wilma Flintstone

    Can somebody confirm that USBOTG would work for this as a SD Card Slot? Basically, if I use USBOTG and connect a Flash Drive to it, would it work as an external drive? If so, I may buy the 16gb version FROM THE PLAY STORE.

    • J-Hop2o6

      USB2GO will work. I believe any Android 4.0+ device natively supports that.

  • http://www.facebook.com/jaysins Jason C. Monroe

    Unfortunately this price is a necessity as it would otherwise cannibalize sales from every other smartphone they sell and would be a huge blow to the OEM’s and affect future deals with them. This is turn could affect the phones they get in the future and just isn’t a risk they can afford. Imagine being the only carrier without a Galaxy 4.

    • philyew

      I think this a good point that is being largely overlooked. Also we have evidence from the Apple v. Samsung case that TM were paying around $430/unit for the Vibrant back in 2010, so there is no way that the $350 pricing that Google uses in direct sales matches what they will be asking from the carriers for this device.

      Now I have to concede that TM will have known the risks when they chose to become Google’s “premier launch partner”, and so they could have simply treated this as another BYOD. On the other hand, the lack of LTE gives them a clear field with Google’s latest flagship phone.

      Only time will tell whether they have made a mistake, but I don’t really think that greed is what is driving the price point, just questionable risk assessment.

  • Guest

    The only way I can see this price “justified” is if the internal storage is 32 GB or higher…

  • JEM

    The only way I can see this price “justified” is if the internal storage is 32 GB or higher…

  • Wilma Flintstone

    Also this makes me wonder about rumors of other Nexus devices. We know how Tmobile usually gets the second rate devices and for Tmobile to carry the 16gb version of this phone makes me believe that the other carriers will get either an upgraded version of this device or completely new nexus devices altogether.

    I guess I’ll have to wait to see.

    Anyway, I may save my money and spend it on that MeeGo device (WITH AN SD CARD SLOT Most likely) that Jolla should reveal later Next Month on the 21-22nd during the Jolla MeeGo Conference. I’ll make my decision on what phone to buy at that point. Note 2, GS3, Nexus 4 or Jolla MeeGo Phone.

    • http://www.facebook.com/people/Jamille-Browne/1184321457 Jamille Browne

      Theres no other Nexus’s 5 Devices google would have announced them alone side of N73g N10 and N4

  • Secret Shopper #42

    I know this doesn’t factor in to our purchase decisions, but I’m pretty sure Google will sell this device at a loss. Relative to retail prices in the market, 349 is the price of a mid range phone, not a “Super” phone. (I still lol when I hear “super” phone, btw). Who knows what TMo’s actual cost on the device is, but they’re going to have to market it as a premium device.

    I’d also account for the fact that it’s going to be bone-stock. Meaning, no additional revenue from the pre installed (cr)Apps. Maybe this is part of their decision as well. I think it’s more of the latter.

  • kevev

    Will it have WIFI calling? That is the important question. :o)

    • J-Hop2o6

      Its a pure Google device, so no.

      • sagisarius

        isn’t that wifi calling just an app though?

        • psaux

          I believe the T-mo version requires some OS hooks that need to be inserted to work, so I don’t think it’ll go.

    • http://www.twitter.com/Wicked_1 Wicked1

      I have never used Wifi Calling, so thats a non issue for me, I barely use my voice plan as it is. If you root the phone and flash ROMs, you’ll be able to get Wifi calling on it, someway, hahaha. Devs always find a way

  • briankh

    Send T-mobile a message on twitter @tmobile or Google Plus +T-mobile and tell them what you think about their pricing.

    • Josue

      im sure we all know the answer to that lol

  • FlyerR

    I disagree with David that the classic plan is any better for customers. If you assume that on the classic plan, they are subsidizing you every month, then the subsidy in the case of the Nexus 4 is only $150 over 24 month which is $6.25. This is much lower than subsidy on any other phone — so again the customer gets shafted.

    T-mo — rethink this one. You are making many long time customers (like me >10years) extremely irate.

    • J-Hop2o6

      Then buy it from the Play Store for $350 and get a discounted plan. Simple. Doing the same with my GNex, and will with the N4.

  • T-Mobile

    T-Mobile has not officially announced the price of the Nexus, try not to let TMoNews convince you otherwise. There is a reason T-Mobile does not send TMonews invitations to events and conferences!!

    • http://tmonews.com David

      Ummm, yes they have, they answered my email with the price, it was announced via their press release and via their PDF on their media kit site. So, yeah, not really. Also, this is the FIRST event in years I haven’t received an invite to, which is why I joked about it on the blog. I’m sure if I asked to attend, I’d be welcomed. Thanks for playing!

      • zacamandapio

        David,
        I asked above but, do you know if I bought a phone thru google play if it will be covered by my insurance? I always thought you need a T-mobile phone to be covered. Am I right?

        Thank you,

  • kpr

    T-Mobile needs to wake-up and make sure it do not loose customers with their over pricing. This is outrageous to sell a phone almost 80% margin to its core and valued customers. It should rather give discount and lock the phone for year. They need to do better marketing than this stint

    • J-Hop2o6

      Then buy it from the Play Store and get the Value or PrePaid plan, simple. Tmo won’t lose anyone because of the price because they’ll just end up buying it from the Play Store to get a discounted Plan from Tmo. And It’ll sell fine with the Classic Plan.

  • Josue

    so its $499 full price when the 16GB unlocked version is $350 really?

  • Dakota

    Tmo always shoots itself in the foot. They keep saying they want to be the value carrier yet they keep having highest prices– did it with GS3, Note, now this. They’re counting on uneducated, gullible consumers who don’t read blogs like these. Every time I’ve priced value plans, they didn’t seem much cheaper. It took 20 months (out of 24) to break even & by then, many wanna upgrade. Plus if you have your own unlocked phone, do you need a 2 yr contract?? Even the Tmo store rep told me its all basically smoke + mirrors. Andthe store demos & signage all had the value down payment bolded as the price and the ‘real’ classic plan at the bottom with tiny type..tthat’s only going to frustrate and confuse new people walking into a store to consider tmo & used to the traditional subsidized plans. Esp since T-Mobile has done a horrendous jib promoting Value plans (+real unlimited -carly is ineffective) and their unlimited data. Not a single person including employees at other carriers knew anything @ these.. but then the tmo employee couldn’t even tell me differences between handsets except ‘one is made by Samsung & one by HTC”. REALLY? THATS ALL TMO TRAINS YOU TO SAY?

    • Spanky

      “Every time I’ve priced value plans, they didn’t seem much cheaper. It took 20 months (out of 24) to break even & by then, many wanna upgrade. Plus if you have your own unlocked phone, do you need a 2 yr contract??”
      Thank you! I’ve stated many times that Value Plans only result in substantial savings for customers who don’t regularly upgrade their phones and those who prefer to bring their own phones. For those who like to take advantage of upgrading at subsidized price every 22 months, the savings aren’t as significant as T-Mobile touts.

      • northstar7

        I’m confused by this 2 year contract for the Value plan. If I bring my own phone, why do I need to sign a contract? I bought a Galaxy Nexus outright from Google. I plan to do the same with the Nexus 4. Why would I need to sign a contract to switch from Classic to Value plans? I thought the reason there is a contract term was to allow the carrier to recoup the subsidy.

  • dudereally

    and what makes you think the $349 is a cash price?

    • archerian

      because it has a dollar sign before it :)

  • Erik Neu

    I am very intrigued by your comments about the move toward combining Classic and Value. I am a Classic customer with 5 lines and very cheap data for 3 of them ($10/month with no overages–grandfathered, no longer available–which is fine for my teens). So although I like the Value concept, and see how it pays for 1-2 lines, up till recently, my math suggests the value of the contract discount 5X every 22 months outweighs the value savings.
    The recent Nexus pricing has changed that. I was getting interested at the $349 price point. The $300 price point blows me away. I am an Android purist, so I would rather have Nexus anyway. So I have pretty much resolved to not take any more upgrades, and wait out my contract, or at least get close, and then move to Value. It would be great if Tmo makes it easier to migrate sooner. This is a GREAT innovation on their part.
    (The one downside, maybe, for some people is lack of choice. If you take this deal, it makes Android more like iPhone–only 1 flavor available, albeit a *very good* flavor. I.e., if you want a physical keyboard, or smaller form-factor, or must have an SD card, or don’t trust LG until they have established a good track record, then this doesn’t work so well. Not an issue for me, the Nexus line is always about where I want it, at least so far, )

  • IneedAnswers

    IS THE PHONE $300 8GB / 350 16GB WITHOUT CONTRACT THROUGH GOOGLE PLAY

  • PiCASSiMO

    Question to all the tech-people:

    Can I buy an unlocked Nexus 4 and install T-Mobile’s “Wi-Fi Calling” application afterwards?

    • J-Hop2o6

      Highly doubt it. The HW has to be “approved” in Tmo’s system for it to work.

    • sagisarius

      That’s a really good question. If they’re making the app work on that phone anyway, I wouldn’t be surprised if you could get it somehow, and do it. I think right now the google store looks at what carrier and phone you’re on and matches apps to that.

      • PiCASSiMO

        I don’t think the Wi-Fi Calling app is available in the Google Play store. I’m hoping as an alternative, I can download it from another source.

    • squiggleslash

      Nope.

      The Wi-fi calling application requires a custom Linux kernel coupled with radio firmware that supports the feature. In some cases, CyanogenMod has been able to reverse engineer things enough to implement the features for its custom ROMs (I was able to get Wifi calling on my 3G Slide long before the official Froyo update that introduced it on that system, for example, by using CyanogenMod) but thus far the feature has not been implemented on the Nexus range, by T-Mobile, third parties, or anything else.

      The major issue is that if the radio doesn’t support it, it’s not going to work. The radio firmware is generally a “binary blob” – essentially a black box that cannot, without specialist knowledge usually limited to the phone’s designers – be modified in any way. For now, at least, Wifi calling is not going to happen.

      What would be nice would be for T-Mobile to introduce a way to make calls over SIP, so you can just plug in your account details into a bog standard SIP client and effectively get the same functionality.

  • loueradun

    This is a big missed opportunity for T-Mobile to sign up a ton of new Value Plan customers! They could have a down payment of $0, and charge $15 a month for the phone since Google is selling it for so cheap! This would allow people to get in on the value plans at no cost to them for the phones, and T-Mobile would still get the entire cost of the phone from the customer… What were they thinking???

    • rambo bitch

      Hey dipshit your missing the point of value you only pay for the phone over 20 months that would make the phone 200 $ cheaper lol??

  • I loving it

    I believe that you would be paying around the same amount for either phone down that day you would be paying 5 dollars less each month you would end up saving 50 more with the value plan over the classic in this ordeal

    • I work at Tmobile

      I agree with this comment i work at tmobile most the times people dont understand the value plan and think it a bad deal

  • BFF

    Wouldn’t it make more sense to offer for it free or $99 (with a $50 mail in)? Their marketing on this baffles me. They could lock people in for 2yrs instead of driving them to the play store. Makes zero sense.

  • Daibidh

    “Subsidized” pricing is never cool! T-mobile just lays bare what carriers do every day! Wonder why you pay $100/mo with the option to “upgrade” your handset every so often? Tah dah! You’re pre-paying for your next severely overpriced handset every month! I wish every plan on every carrier were this clear and upfront! Value plans rule!

    • Motoki_Mo

      Yes exactly this. It sucks but it’s no different than what all the carriers have been doing for years with subdizied pricing except that here they are being much more transparent about it.
      Most people I know are paying $70-$100 a month for phone service. I pay $30 for 5GB of 4G data, 100 minutes of voice and unlimited texting etc. Just $30. Not $30 plus $20 for this and $10 for that etc. I also have to buy my phones up front so yes there is a trade off but it’s still worth it to me.
      It’s funny, if you give people a cheap phone and then grossly overcharge them for monthly “Services” and add-ons they are are okay with it but if you give them a cheap phone and tell them they are paying the rest in installments (which is exactly what they are doing the other way just hidden from you) they are all up in arms.
      It’s like when Department stores try to do away with inflating their prices to have “sales” and just charge the sale price everyday. People think they are paying more and hate it even though it’s the same thing and but the store is just being more up front with you with the price instead of giving you a false inflated price it was marked down from.

  • Y314K

    Got one ? from stuff I heard posted….

    If one migrates to a Value Plan & one brings their own device(s)… Does that mean that u don’t have to sign a new 2 year contract since u won’ be using the payment contract that requires the 2 years ball & chain ??? Is this hit or miss or is this the actual bring u’r own device to a value plan & avoid the contract policy ???

    • Fredrik Coulter

      If you convert to a value plan, there’s a one time charge to deal with. Go to my.t-mobile.com and see how much they’ll charge you.
      My charge is $350, which may explain why I’m not switching over.

  • missinginput

    Where was the outage when sprint and verizon were selling the galaxy nexus at a starting point of 500 then subsidized while google was again selling a nexus unlocked contract free for 350.
    It just wasnt as noticeable because they dont do value plans and offer a slightly higher subsidy with larger monthly rate plans.

    Also please explain why a classic customer is better off in this situation they are paying 250 with a 50 MIR and are paying at lest $15 a month more in their rate plan vs equal value service

  • http://about.me/daylondeon Deacon

    any resaon to suspect other Nexus devices will be announced from other manufacturers?

  • Huda Kaleem

    theres a small difference between the 2 devices.. the tmobile version will have HSPA+ 42 and google play version will be HSPA+ 21.. which means you may be able to get higher data speeds if you get the device from tmobile..
    i know these speeds are theoretical, but there were some occasions when i got over 21 mbps data speed on htc one s.. so you will definitely get higher data speeds if buy the device from tmobile..

  • Martin Kachev

    T-mobile and their pricing sucks so bad, It’s like they are trying to squeeze almost anything they can out of you every penny – just because their network sucks (YES YOU HEARD ME!) why? because every country that I have been supports the standard frequencies! T-mobile is the only carrier in the world that doesn’t support the regular 3G and 4G frequencies (Yes I know that they are trying to import that) but I’m not so sure about it, may be they are in a good deal to keep it this way that way dumb people will overpay for a simple (regular) device that you could bought international version for less money – Same situation with Galaxy Note 2, I mean what the hell the international version without stupid Logos of T-Mobile on them same specs for less (unlocked) and your version is like $100 or $150 on top? It’s like you are making me pay because you are dumb enough not to support the frequencies. Don’t you think that most of the people would want a phone without making advertisement of your stupid company everywhere? Don’t you think that I would like to hear one – Thanks – from you just because I’m your customer and I chose you? Don’t you think that I don’t wanna pay more for something that doesn’t cost that much? Do you think that all of us are crazy, I think I would be out of here soon because I’m sick of this policies, You are dealing with the issues just like Apple & AT&T this is not the right way. At the end of the day you guys have poor coverage, no big deal data speeds (yes I know that it’s unlimited and that’s the only thing u got, that’s it zipppo. Pull yourself together, because I know that I’m not the only one that thinks like that, pisz off now!

  • JohnnyDJunior

    Im confused are people saying buy it and use a prepaid Sim because thats what im doing after all if you think about it everywhere you go now adays have WiFi, well in NY. So i use that 200mb 4G then 2G but mostly on WIFI so it doesnt hurt that bad. and i can just sell my Factory Unlocked iPhone 4 for 300. I think thats a Win Win

  • http://www.twitter.com/Wicked_1 Wicked1

    This phone not having an SDcard slot may really be the deal-breaker for me. I like everything else, but if Google is gonna be making phones with internal memory ONLY, they need to be making 32GB and 64GB versions. I mean I utilize about 30GB on my G2 right now-32GB sd card thats about 95% full + 2.5GB of internal memory on my phone. On the 16GB version, how much is usable memory? Probably about 12 or 13GB. I’m not comfortable depending on the Cloud for a lot of my data. I experienced the the Sidekick server disaster of 2008, ahaha. So, I prefer an physical sd that I can transfer from phone to phone. I’m just gonna have to weigh the pros and cons on this phone. And considering my contract is up in December, I may just pay the $350 to Google on the Play store, and not sign a new contract. Plus that will be the unlocked version, which could be taken to another carrier.

  • Metal Maniac

    All of this nonesense over pricing. Many of you sound. unrealistic . Deal with reality!! If you remove the google playstore offer many of you who want the device for the specs would get it however you could. Having the Google offer further exposes how were all being screwewd anyway. I don’t hear nobody complaining about the nearly 700$ for the note or the $550 for the Gs3 and. it is not even as highly speced as this phones is. The reality is you have two ways to get this phone. MOST T MOBILE SUBSCRIBERS WILL BY IT FROM T MOBILE. The savings you would get buying it directly from google won’t look like much compared to everything that comes with carrier support. All of you dummies who dont understand the Value Plan don’t subscribe to it! There is very simple fine print that some of you can’t comprehend, like you will save money…and you will buy the phone at full price. The best thing T mobile can do is sell this phone for either $399 or 499. Make the the down payment only $99 and allow the customer to EIP the remaing 3 or 400$.
    Because of the Google playstore offer T mobile needs to do this. There should be one high end phone not jacked up in price. So what if you lose a few Gs 3 sales. As a Value plan customer I’m willing to do $499 for $99 down. DON’T MAKE THE VALUE PLAN CUSTOMER PAY $ 199 down when current $499 devices like the Galaxy Relay only require .$99 down. Doing value at 99 and classic at $199 is the only choice!!

  • Metal Maniac

    Off topic a bit but still related, does anyone know the specific reason why the T mobile launch date this device is 11/14 vs right now or even Googles 11/13 or even right now?? I personally know isn’t anything related to the holiday season. Anyone with an informed answer, lets hear it!

  • Secret Shopper #42

    You know what would be cool?
    Being able to purchase the Nexus 4 through the Play Store AT a T-Mobile store. This idea is about 45 seconds old, so bare with me. Transactions could be run through the play store on a web browser. Accounting for the inventory would be another issue.

    Someone help me out here. I think this could work.

    • Metal Maniac

      Genius, what you are proposing is exactly what will happen. Maybe you are trying to say, both stores sell for the same price….NOT GONNA HAPPEN!!

  • ohh man

    i wonder if tmobile would be carrying both models and how much it would actually cost from them i know the statement above say 199.99 is that for 8gb model?

  • squiggleslash

    Well, people will still use the value plan, they’re just not going to buy the phone from T-Mobile. They’ll get it from Google and stick a value plan SIM in it.

    I’m wondering if Google is subsidizing the Nexus 4 on their own site, as I just plain don’t understand the pricing here.

  • zacamandapio

    In my opinion Tmobile does this because they’re selling a T-mobile phone that you could get replaced if lost, broken or stolen. I don’t think that if you buy the phone thru Google your insurance will cover it. David, can you check on that please?

  • Fredrik Coulter

    I’m on a classic plan, with family shared minutes. If I switched over to a value plan, I would only save $10 a month, and would be hit with a $350 fee due to all of the contracts that would have to be converted.
    If I get the Nexus under my existing plan, I’ll keep paying the $10 difference and pay $199 for the phone. If I get the Nexus under the value plan, I’ll pay $10 MORE a month, ($10 savings and $20 a month phone payment), and the phone will cost me $549 ($199 for the phone and $350 for the switch).
    If T-Mobile is trying to get me to switch, they’re doing a crappy job of convincing me.

  • ohh man

    just to make it clear for myself for the classic plan its basically 250 with a mail in rebate $50 so 199.99 but does it say how which model it is i hope its 16gb because im afraid 8 wouldnt be enough. Im just so use of having a sd slot for extra storage and i could store picture and music on my sd card and not use the phone memory. i have the g2x which is has 8gb onboard storage but after all the software is add its only have maybe 5gb left. so im kinda caution on getting this even if i really want a nexus device

  • OnlineRefugee

    Obviously this is simply T-Mobile taking advantage of an uninformed or cash strapped customer:

    - Most consumers don’t shop around. So 95% of the shopping public will not be aware of the phone being available at Google. For these people, T-Mobile treats this phone as one more choice for the shopper. In other words, the customer walks into the store and inquires: “I saw some new Google phone on TV, called the Next One, Nextus, Nexium, something next, do you have it?”

    or

    - For those aware of all the phone choices among the carriers, the customers simply don’t have the means to pay (whether cash, Visa, or MC) $400 for a phone. (Taxes and shipping included in the price.) For those people, paying over 20 months enables them to get a hot phone where otherwise they would have to pass.

    What My Crystal Ball Says

    Since prepaid companies like Straight Talk are using AT&T and T-Mobile towers (4G, unlimited talk, text, web) for $45 monthly (taxes included), and no credit check, all that “loan shark” post-paid carriers have to entice penny pinching customers: subsidized phones (where the customer pays $2400 “interest” for that $300 “loan”) or a T-Mobile phone payment plan.

    Alas, in these hard times (where Toys R Us is running commercials for layaway; $4++ gas; and product downsizing-but price up; IMO the “free patio furniture with every purchase” come-on is doomed to failure.

    As I said two years ago, the American consumer is wising up. They are calculating the total cost of phone ownership, especially to get the latest and greatest. Consumers are figuring out it it too costly to have the newest, first cabin phone (especially knowing they will be stuck with the phone for two years, but in six months see a TV commercial saying their phone is old and outdated).

  • JayMoney88

    i agree that’s ridiculous if they are going to keep the pricing like that… Hopefully they change it to $49.99 down and $15 a month otherwise it makes no sense AT ALL.

  • niididdy

    All, you are better off buying from google play. No matter how I look at it pricing at tmobile don’t make a lick of sense. Unless you want to spend more for the same phone for whatever reason. I personally hate contracts and my new goal is to phase my contract out. The Nexus line will help me do just that.

  • newwt

    Thats not bad? You get a phone and 20 months service for $500….. Buy it from the play store for 349$ and get ANY plan and you will end up spending alot more than $500 over 20 months….

    • ctfrommn

      Ummmm, service is not included in the 500$, you have to pay for that on top of the phone cost. So in the end you are paying 150$ more for ZERO added benefit!