Costco Training Doc Compares Classic Plan Versus Value Plan Pricing For T-Mobile

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T-Mobile’s new Value Plans launch next week and third-party retailers are ramping up with new training docs and guides to help employees with the transition. Given that T-Mobile’s company owned retail stores are moving to Value Plan only environments, national retailers are showing off the cost comparison with the new Classic plans. There are a few discrepancies listed here however, specifically since we learned yesterday the price of the Galaxy S III in company owned stores will be $69.99 and not $99. Second, no two-year equipment contract will be required with T-Mobile’s new Value Plan structure which may or may not be a notable difference to some.

Unless I’m missing something, Costco’s document is pretty convincing that until you pay off the handset, Value Plans and Classic Plans can cost similar amounts. The real advantage may lie in T-Mobile’s trade-in program which will allow customers to put the trade-in amount against the overall cost of the device. Anyway you look at it, a trade-in should offset some of the total 2-year cost as CostCo words it establishing a clear advantage of the Value Plan side. Surely you’ve got a phone lying around you can get rid of to help offset some of the balance, right?

So where do your opinions lie, are you moving into the Value Plan camp?

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  • rjkmadison

    They should point out that the monthly drops to the Value Plan service rate after the 24 months. So, if you don’t need a new phone, you continue at a lower rate. Under Classic (and other carrier plans), you need to get a new device as soon as you get the subsidy or you are throwing away money.

    • gnd

      No, it just depends on current needs. Sometimes a new phone will come out, with features that I want, so I will get a new phone wen the contract ends. Otherwise, I am happy to keep my present phone. Also, I know that I only want to spend $50 a month for phone service. With the new plans,, I will be spending at least $65+ for 2 YEARS!!!! I also know that I am only going to spend x amount on a phone—period. so a phony $X DOWN means nothing- BECAUSE I know I will still be paying money on a phone for 2 years. So basically this plan limits me to an old phone that will probably A) not be upgraded and B) will probably be discontinued very soon( No new parts availably IF I have a problem) Don’t think tthat this will get more customers in the long run.

      • Tmorep

        I think you’re missing the point. It’s not weather or not you need a phone at the end of the contract, it’s the fact that on classic you will still be paying subsidy plan pricing after 24 months where on value you have the liberty to pay off early and be off commitment. And as far as phone life, this is the same for either plan and on any carrier. You’re paying for that 6 month life spam phone one way or the other. When has this been any different?

        • Tmorep

          I meant whether not weather lol

      • Ashley

        Ask Costco to do an upgrade in the first year. You can’t without paying a full unsubsidized price. Value gives you better flexibility every which way as you could pay off what you owe (less than full price because you’ve made payments) and continue paying the same thing you would like on a classic plan. Long and short value is better for most people.

      • Seeyawing

        Amen.
        I’m going through this same situation now. I was using a Tmobile Wing as of 2 weeks ago (out of contract). I was given a Moto Cliq (tmo). I put my sim card in to use it. I get talk and text but no internet. The store clerk told me to call tmo so I did. Tmo said that i have to sign another contract to get new data plan. Why. My contract is pre 2008. I’d like to keep it. Everything I see offered by tmo cost more and I get less. Why sign a new contract when I’m bringing my own phone?

  • Mushdagrt

    Not impressed…

  • HTCJUNKIE

    Oh yes David, the trade in program. Because I couldnt sell my phone on craigslist/ebay/xda and make the same or more. Value plans are a wash.

    • http://tmonews.com David

      Some people will like the immediacy of doing it right then and there, even if there is a little less money involved. For some, convenience will be more important.

      • http://mondegreen2.blogspot.com/ Erik Neu

        Also if you have a phone that works but has issues, you can’t sell in good conscience, but you can trade in.

        • Durandal_1707

          Good point. When I got my GS3, I considered selling my old G2x on eBay, but I couldn’t find the heart to foist that POS on some unsuspecting schmo.

    • Tmorep

      And that’s awesome that you can do that. It is still nice to have the option to trade in as some people don’t feel comfortable selling their phones. When did more options become a bad thing?

  • JustSaying

    Has anyone seen that Dodge Dart commercial where they talk about registering your car (kind of like a wedding registery) online so that friends and family can go on and pay for certain parts of the car so you end up paying less… Maybe T-Mobile should try something like this with a phone since prices are so high for smartphones. Also they could try partnering with retailers. For example if you spend a certain amount of money at a store they could give send you T-Mobile gift cards to help pay off your phone. Just throwing out ideas.. Any way T-Mobile can stand out againt the competition I’m for it! :)

    • Mike

      I just picked up the Nexus 4 from google play store. Price is only 299 and shipping is within a week. This phone is amazing-super fast, smooth screen navigation and it’s yours. You just dont have all of the carrier bloatware. Granted you can’t trade in you week old galaxy s2 for 75 bucks for that new $700 smart phone. Buying the nexus 4 outright from google and putting on a value plan is where the real value is to be found. PS if you bring your own device to the party you don’t have to have the higher end data plan. Now that’s true value.

      • Jake

        why would I buy this phone that has a fragile glass back. non removable battery and no SD card!!! Epic Fail!!!

        • Mike

          Geez Jake, Iphome has a fragile glass back, no SD card and a non renewable battery but continues to be wildly popular – some might even call it one of the most wanted phone. is the Iphone an epic failure because of glass back, no SD card and non-removable battery? Seriously?

        • therealmikebrown

          Yes, that and itunes.
          And I like to download mixtapes from the web, these are sometimes zip files. I can unzip them right on the phone and listen to it right away.

        • Durandal_1707

          The iPhone may be popular generally, but there are many of us who prefer other phone makers for these very reasons (among others).

  • GOGOTMO

    For a single line they may be comparable, but family plans work out much cheaper on value

    • Herb

      Until you start buying phones

      • http://mondegreen2.blogspot.com/ Erik Neu

        Not if you buy Nexus 4 straight from Google. 8 Gb version for $300 is fine.

    • mdosu

      yes, unless every phone on there is a new smartphone. I’m saving crazy money on my value family plan now, but that’s only b/c my parents and inlaws do no require a smartphone.

  • timmyjoe42

    I don’t know why anyone would trade in a phone unles they are lazy. You can get far more for a device on ebay. The value plan is better for anyone who brings in their own device, buys it outright, or buys a cheap device.

  • moises1204

    is the costco 90 plan unlimited everything?

  • CEEverett

    The leak from yesterday about the monthly cost of each phone is not $20/mo for every phone so this document would be somewhat misleading

    • kemikev

      It’s not really misleading. It clearly states in the first section the customer is purchasing a GSIII (Galaxy S3). They are using that particular phone purchase to drive their scenario. I guess if you’re an idiot, you wouldn’t be able to see past that. But then, good luck with your life.

  • trickinit

    So no contract and cheaper upfront cost, combined with the trade in credit. Value really is the way to go.

    • S. Ali

      Even cheaper if you just buy the phone from ebay or craigslist.

      • abc

        .

        • S. Ali

          You pay a higher rate on those phones, with a value plan, once your phone is paid, you don’t pay a higher monthly rate. Seriously though, who pays more than $300 for a phone.

        • abc

          .

        • xmiro

          you realize with Amazon you’re on the hook for their own ETF of $280 if you “materially” change your plan within 181 days of signing a contract

        • abc

          ..

      • Mike

        With the recent imei blocking that’s going on with carriers -Craigslist and eBay may not be the best place to get a cell phone. You could get a nice phone for a reasonable price, however, the imei could be blocked a day, a month or even further out if the person you buy it from doesn’t pay their bill, reports it a stolen or is selling their reported stolen phone to file an handset claim. Craigslist is typically a cash only purchase so you can’t even stop payment or report it to your credit card company. BE CAREFUL or you’ll have a nice new bricked phone.

    • mdosu

      Problem is, I’ve NEVER seen a good valued trade in program. Ebay is the best place to maximize your sale of your old phone. I think T-Mobile will will value the HTC One S at $100, these phones are still selling in the $250 range on ebay. That $50 isn’t chump change (to me at least).

  • JadedNYer

    You also pay tax on the full price of the device with the Value Plan whereas on the Classic you would only pay tax on the subsidized price. At least in NY.

    • Herb

      On Classic you’ll pay an upgrade fee so it’s basically a wash.

      • tmobiley

        I believe in Costco waives upgrade fees, and they offer a $20 worth of freebies like car charger and stuff.

        • chantie

          they only waive activation fees

    • Tmorep

      True but this is somewhat offset with upgrade fees.

    • Ashley

      And in Florida our state tax is 6% (plus some county taxes if applicable) but our cell phone bill taxes and fees equal around 19% when said and done. That means I’d rather pay 6% up front for the phone instead of 18-19% on the bill for $20 a month. Basically unless your state communications taxes are less than your local taxes then value wins again.

      • Ashley

        Let me clarify… I mean the $20 extra of the plan is taxed higher for us. The $20 on the phone is lower taxes up front. And if you happen to choose a phone that isn’t $20 a month another win.

      • xmiro

        actually, not to be a buzz, kill our taxes in Florida are around 21% total when you account for all the fees. If you’re lucky to live in Delray Beach you also get a “pole tax” courtesy of the city.

  • Rick

    I need a new phone and qualify for upgr in April, so I’m probably in for whatever. My current phone is too sick to trade in, but i have an older one I may pimp out for a little break. Unless someone wants a G1 with a fresh battery. Didn’t think so.

  • RaguMaster

    This is a load of crap I’m sorry in the value when your done paying for the phone your value plan goes back down to 70 plus right now its 20 payments not 24 payments of 20$ also month 25 26 27 so on and so forth classic still 90 value back to 70 stupid costco

    • 21stNow

      I don’t think that Costco is being stupid here. The purpose of the training document is for the plans that are coming; I’m sure that they are already trained on the plans that they have now.

      Plus, Costco is concerned more with the customers that upgrade their phones (at least) every two years; they get their money from the contracts, not the service fees like the carrier does.

  • http://theotherlinh.com/ Linh

    I had been excited by this early on, but as I understand it, Value plans are still contractual, right? That doesn’t seem to really help much in the grand scheme of things because phones (aside from the Nexus line, maybe) are so expensive.

    • http://about.me/daylondeon Deacon

      yes and no really … if you want to end your service there’s no penalty .. you’ll just have to pay the cost of the phone remaining assuming you had a phone on an equipment plan .. so if you don’t have a phone you’re paying on, you can just get out with no penalty .. that’s the beauty of going no contract and instead using equipment contracts i guess.

      • http://theotherlinh.com/ Linh

        Wait, so the value plan has no contract on it? Why would I ever do 4g monthly anymore (or is that being phased out?).

        I guess I’m confused because of the current value plan states up to a $200 per line cancellation fee.

        • http://about.me/daylondeon Deacon

          the current value plan is supposedly going to be phased out and moving to value plans with no contracts. so TMO stores will have value plans without contracts. that’s this whole UNcarrier thing .. they’ll have equipment agreements instead .. i don’t think 4G monthly is being phased out not sure so don’t quote me lol

        • mdosu

          current value plan has contract, new one will not. The current one is cheaper for me, b/c I have lines on my plan that doesn’t require extra text or data that’s package together in the new upcoming no-contract value plans. So that’s why I said, jump on the current value plan NOW before it goes away next week. Disclaimer: I believe it’s a wash if you’re a single phone on a single plan, but do the calculation of new plan versus outgoing plan, taking into account of what you need (data amounts, other lines, text, etc.) Again, the new no-contract value plans are prepackaged talk, text, and data, current ones are talk only with text and data added a-la-carte

    • mdosu

      You’ll still need to pay off your phone, if you bought it on the equipment plan. They’re not going to let you walk away with a serverly discounted smartphone. IMO, the cheapest approach would be to buy a gently used phone on ebay and buy the value plan (today, not the upcoming one), and you’ll always save money over 2 years as long as you don’t switch phones.

      • http://theotherlinh.com/ Linh

        yeah, I’ve factored in the phone pricing myself. I will continue to go Nexus so long as google offers a $300 option, heh. Even a $500-$600 phone.. worst case, I don’t save money vs contracted plans, but at least i’m supporting no contracts.

        If these new value plans indeed have no contract tied to them, that would be great. I hope it “no annual contract” is hidden to mean hardware side only.

        • mdosu

          Yeah, good plan. I indulged myself, sold my HTC One S on ebay and bought a Note 2 on Ebay for $500. I have to have LTE and the goodies that come with Note 2. The features of the phone will not be outdated for a good 3 years, based on what I need it for.

  • PiCASSiMO

    David: The second “c” is not capitalized on Costco.

    http://www.costco.com/membership-information.html

    • http://tmonews.com David

      I don’t know why I thought it was, fixed! Thanks!

  • kev2684

    i knew the last 4 months would make value plans seem the same with classic. it was their selling point over classic before the “UNcarrier value plans”

  • Rocco Gallo

    cotsco is a 2 year service agreement, tmo is a 2 year equipment service. that’s the difference

  • JeffreyME

    Clear advantages of Value plan:
    1. You can get a new phone as soon as you want with no penalty. If a great phone comes out in one year — you’ve already saved $240 plus tax and fees to put toward purchase; and you don’t have to buy it from Tmobile.
    2. Keep your phone more than 24 months, and you come out ahead. Like computers, phones are getting to the point where the compelling innovations to get a new on are decreasing. Keep your phone for 30 months and you’ve got $120 toward a new phone.
    3. After 24 months, no need to re-up to a new contract. If you’re unhappy with T-mobile, just leave, or use threat to leave as leverage for better contact, discount on phone, etc. If you’re okay with it, just continue to pay.

  • http://profiles.google.com/mrice.hill Mr. Hill

    Value has the advantage
    - You can choose not to get a new device after 24 months and let your monthly bill fall to $70
    - If there is a device that comes out before the 24 months are up that you want, you can either pay off your remaining balance or trade in your current device towards the new one. With Classic you have to pay full retail price if you want a new phone before the 24 months.
    - If you’re dissatisfied with T-Mobile or your device for whatever reason, all you have to pay is your remaining balance on the device rather than the ETF
    - Also not every phone will be the full $20 per month, just the highest end ones. Value could come out a lot cheaper for those who don’t need the latest and greatest.
    - Taxes on your bill are lower because you’re paying fees and taxes on the $70 and not the installment whereas you are charged taxes on the $90 rate plan for classic.
    The only time I can see people coming out on top with the Classic plans now are if they buy their phones when retailers like Costco have sales like $100 off or $0 upfront.

    • xmiro

      well explained
      $0 promos is about the only time I’ve seen Value vs Classic be worth it. But you still have a contract to deal with because if 10 months in a phone comes in that you want you have to pay full price or wait or deal with ETFs

  • rob dotson

    you don’t pay the taxes on the $20 equipment charge that you pay on the increased classic pricing which can be up to and exceeding 20%… value is a better value.

  • mdosu

    ..and there you have it in a nutshell, T-Mobile’s new marketing concept of “uncarrier”, decoupling phone subsidy from cost of service

  • CompSciPhd

    The real Q is, what will be the ETF charge to get out of the costco classic plan and move to a value plan.

    i.e. is the ETF more than $240?

    • CompSciPhd

      or actually $400-500ish ($i.e. the amount you would be saving by moving immediately to a value plan)

    • chantie

      they start at $200 per phone and go down depending on how long you’ve had your phone.

      • xmiro

        it’s actually $200+state+local taxes & fees

  • mark

    The value plan phone payments will not be for the entire 24 months, but rather only 20 months. Thus, this cost comparison chart isn’t an accurate representation of anything. It will be cheaper over the course of 2 years on the Value Plan.

    • thepanttherlady

      With the new Value plans the EIP’s are 24 months now.

  • JetJam

    This is why all phones should work on all carriers, manufacturers sell the phones, cell company’s sell the service, the consumer buys what they want. win/win/win :)

  • old plan

    I have an old plan. 2 lines. Total $65 including all taxes, 500 shared minutes
    1 line unlimited data and 400 text
    1 line 400 text

    No value plan comes close to this for me. Most Tmobile reps are shocked at my old plan and price. If i use my upgrade I will lose my 9.99 unlimited data and it will go up $15 to $25. Still even at $80 I don’t think these value plans make any sense for me. I will have to get a nexus I guess to keep my plan intact

  • kevinmct

    No more value plans at Costco?I bought a HTC One S at Costco on a value plan for $339.99 on 4/25/2012 . I did have to sign a 2 year value plan contract,but still saved a lot on the price of the phone.

    • xmiro

      no, the new value plan setup cannot support reseller commissions

  • Encino Stan

    So, you pay $480 more for the phone and get $20 cheaper rate on service. Break even in 24 months. Seems like a win-win deal, IF you just have one line.

    BUT, for this math-magic to work on a family plan with 4-lines, then the value plan would have to be $20 cheaper per line. I don’t see the family plan being $80/month cheaper, so what would the break even point be. Or would you ever break even? (And if it takes more than 3 years to break even, then it isn’t worth it because our phones rarely last more than that.)

    • Durandal_1707

      The plans are live. Instead of speculating, why not just have a look at their web site?

      If I spec a four-line plan with 2 GB of data each, the price that comes up is $120. Add four $20/mo EIP payments, and you get $200 per month (it’ll be less, of course, if someone opts for a lower-end phone, but let’s assume everybody gets a GS3 for the sake of argument).

      Per the Costco plans, as listed here (http://www.tmonews.com/2013/03/t-mobile-new-classic-and-prepaid-plans-classic-available-at-all-national-resellers/), a 2-line Classic plan with 2 GB each is $140, and additional lines are $40 each. Thus, a 4-line Classic plan with 2 GB of data each would come out to $220.

      Looks like Value wins.

  • http://www.facebook.com/kristen.beck.79274 Kristen Beck

    Costco offers T Mobile? Since when?
    I’m in my Costco weekly and T Mobile has never been offered.

    • http://tmonews.com David

      For as long as I can remember.

      • http://www.facebook.com/kristen.beck.79274 Kristen Beck

        Must be a N Idaho thing.

  • why

    Once again T-mobile is pitting their 3rd party retailers against their own reps. I was a call center manager for many years and we had to deal with Costco and others deceiving current customers and doing shady business (like reps calling in pretending to be customers relatives and saying they were dead before we required proof) to keep them from going into corporate stores or calling in for upgrades. Now with this change you have two totally separate programs competing for the same customers under the same logo. Talk about confusing the customer Guess T-Mobile never learns…

  • loueradun

    Anyone else think that $90 for 1 line with data is too much? I am still on a grandfathered classic plan and I’m paying $200 for 4 lines, all with unlimited (10GB cap) data and more minutes that I can use.