Editorial: T-Mobile’s New Plans Are Awesome For Everyone

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Earlier today, T-Mobile held an event to show off the new plans and payment schemes for service and phones. There weren’t many surprises given all the leaks we’ve had in the last few weeks about T-Mobile’s “Uncarrier” offering.

Like John Legere promised back in December, the new plans are very simple and pretty easy to understand once you grasp the basic concepts behind the plans. When looking at them on the website, you can see that the plans are far less complex than the traditional plans that AT&T and Sprint offer (and that Verizon used to offer). It certainly offers more than Verizon’s shared plans to families for much less.

However, I’ve been reading many of the comments that you, the readers, have been leaving. Some of you guys appear to be less than pleased about it. A lot of you are also the same people that want T-Mobile to expand HSPA+ coverage and deploy LTE. At T-Mobile’s current subscriber levels and state of business, it is not feasible to retain the previous offerings and turn a profit.

For example, the fourth quarter of 2012 was one of the more successful quarters, but T-Mobile still lost money. In fact, the total expenditures exceeded total revenues by $700 million. That’s a net loss for the quarter. And T-Mobile’s expenditures are going up for the next year, not down. The new plans nominally raise the base cost of the plans to help pay for these upgrades and expansions, and it simplifies the plan configuration. Most importantly, it separates the phone cost from the plan cost. This makes it easier for those bringing or buying phones separately to save money, and for T-Mobile to save money by not taking on the hit for the device.

We all want T-Mobile to upgrade its vast 2G network to HSPA+ and LTE, but T-Mobile can’t do it with no money. Sure, the contract has been secured for Nokia Siemens Networks and Ericsson to upgrade the entire network, but T-Mobile has to pay for workers, labor, individual parts, and support management resulting from upgrades. All that is very expensive, and T-Mobile needs money to get it done.

That said, I think T-Mobile is being very fair with its plan changes. The vast majority of people signing up for service vastly prefer the peace of mind from having unlimited talk, text, and web plans. There’s a well-known psychological effect caused by the knowledge of the possibility of overages. People will reduce their usage to ensure that overages are never incurred. By offering affordable plans that are unlimited in all the respects that people care about (while adding flexible data options for those who need it), T-Mobile is attempting to reach the widest possible audience to pull in customers to become long-term subscribers.

I’m even preparing to switch to the new plans because it is much better than my current plan configuration. Not only are the plans substantially cheaper and offer more for my money, I no longer have to worry about wasting money on a subsidy that I’m not using. Frankly, I prefer to acquire my phones without a contract, if possible. Being able to SIM-unlock and switch providers in areas where service may not be ideal is something I need to be able to do, as I visit areas where T-Mobile does not yet have HSPA+ service somewhat often.

And it isn’t like T-Mobile has totally given up on its cheaper prepaid offerings. They are still available, just less prominent. The $30/mo prepaid plan options are still available, but T-Mobile is clearly pushing the more expensive plans. Additionally, the Pay-As-You-Go and the Pay-By-The-Day options are still there, though the $1/day option (which lacked data access) is gone. This reflects the reality that data is what people want. More importantly, unlimited web access is an important differentiator for T-Mobile.

In the end, I feel that T-Mobile is making the right choice by launching these new plans and purchasing options. T-Mobile will certainly experience some issues due to initial confusion on how it works, but after that is all dealt with, it will be smooth sailing from then on. These new plans truly exemplify the best value in wireless, and I’m sure that I will not be the only one to see that, going forward.

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  • Aaron Peromsik

    The saving grace is that people who want to pay less for less service have a nice variety of T-Mobile-based MVNOs to choose from.

  • wheelman13

    You left out the phone payments. For 3 lines that is $60/month bringing the total to $210 just like Verizon and AT&T. Maybe I’m too addicted to tech, but I can’t imagine someone being ok using a 3 year old phone to avoid the monthly payments.

  • wheelman13

    I’d pay $120 for a value plan or $110 for my current family plan with 700min/400txts/5gb each. I don’t need unlimited anything and would miss out on ~$900 in subsidies on two Galaxy S4s. I don’t see the value.

  • rip ham

    Not really so great, I actually expect it to go a little
    lower since they are actually making more profit on this than the
    previous promo.

    Since the old Value Plan was $100 for 5 lines 2 unlimited talk/text/data 2GB at 4G, 3 lines 500 minutes each.

    The minutes and texts costs them next to nothing, what you are really paying for is the data.

    So in effect on this plan you are paying $10 more for 1.5GB less data.

    You should expect them to provide a better deal providing an additional
    10-15% of value, unless somehow they have amazing success.

    The best thing for the consumer would be for them to bump the data up to
    750MB on the base plan (coincidentally that’s exactly what I need). I
    expect a small savings on the device side instead.

  • Ransh

    It’s actually 110 with the device cost, so same as Sprint on monthly payments, you save 100$ on the upfront device cost and you can switch plans at any time if you want to go to some other GSM carrier.

    but why wouldn’t you just start with those MVNO packages (or even T-Mobile’s own prepaid plans)?

    • Joseph M.

      The $90 monthly figure includes a $20 device payment. The plan is only $70 ($50 base charge + $20 for unlimited data). You can shave $10 off that if you limit yourself to 2 GB of data. Not too bad, is it?

  • Spokker

    My T-Mobile bill is $58 per month for 500 minutes, texting blocked and 5GB of data. Why would I pay for something I do not need? What I want is data. You can bump me down to 250 minutes if you want.

  • yoshi

    I love the new plans… Before I was paying on tmobile 165.00 after taxes for 2 phones unlimited talk, text and throttled unlimited data after 2gigs.. Now my bill will be $118 pre phone purchase after taxes for 2 phones unlimited talk,text, 2.5gigs of data with mobile hotspot . I bought the galaxy s3 so add $20 to make it $128 and im still almost $40 cheaper. I checked all the big carriers and and tmobile is cheapest.. The 2nd cheapest I could get was thru verizon with a similar plan it came to about $165 after taxes with a corp. discount, but the phones for verizon where free with 2 years. So tmobile still came out about $20 cheaper

    • yoshi

      I forgot to add im also loyal to tmobile. My wife lost her phone last year with a year left on her contract. I contacted tmobile and they replaced the phone with a full discount without a hassle.I dont know how the other big carriers work but, being treated very well by tmobile adds to the value of staying there costumer.

  • Spokker

    The plans are not awesome for people who do not need more than 500 minutes and block texting. If someone blocks texting, why would they then pay for something they block?