Telefonica Exec Warns T-Mobile Over Dropping Subsidies

There’s been no shortage of detractors over T-Mobile’s risky decision to move to a Value Plan only world in 2013. Now, Tracy Isacke, director of Telefonica Digital, a large Spanish multinational telecommunications company with more than 313 million customers worldwide is advising T-Mobile not to go down this path.

Isacke suggests taking it from experience as Telefonica decided to undertake the same move earlier this year with less than favorable results. In September of this year alone, Telefonica lost 253,520 mobile users as Vodafone, another large European operator (part owner of Verizon/Wireless) is also seeing negative results from the removal of subsidies.

“It was a disaster,” said Tracy Isacke, director of Telefonica Digital.

T-Mobile’s move would likely see less detractor feedback if more US carriers were to transition away from subsidies, says Omar Javaid, Managing Director of BBO Global and former Motorola exec.

“If someone wants to drop subsidies, that’s an opportunity [for the competition] to go for the jugular,” he said.

As a result, Telefonica competitors like Orange have gained market share at the expense of Telefonica and Vodafone. Fears that T-Mobile may lose customers as a result of this move is matched with the concern that it may attract customers with outdated equipment.

As part of T-Mobile’s Value Plan move, they will continue their “bring your own device” message allowing customers who finish a two-year contract at AT&T to bring their already aging device over. As T-Mobile’s rate plan prices are cheaper, there may be little incentive for customers to drop their two-year old devices and just move over to T-Mobile and save money on monthly costs. T-Mobile’s reputation is already suffering from slow network upgrades, and its place as the last carrier to receive the iPhone — what they don’t need is another ding to their image of being a bottom-feeder carrier.

It’s true that Value Plans allow customers to come out ahead over the course of a two-year agreement, especially compared to companies still relying on the subsidy model ala AT&T, Sprint and Verizon. Still, T-Mobile has their work cut out if they not only wish to avoid the pitfalls that Telefonica and Vodafone, but also to convince customers that paying $650+ dollars for an iPhone going for $199 elsewhere works out in their favor over the long run.

The problem may ultimately be a psychological issue as the US wireless market has ingrained the subsidy model for years that any move away from it could scare customers off. We’ve been trained to expect subsidized pricing even as many of us know the subsidy model is a terrible system. If the results from two mega-international carriers are a precedent, T-Mobile may face more than just an uphill battle selling customers on their new Value Plan only world.

CiteWorld via @kfitchard

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  • Noor Mahmoud

    Unfortunately it is true. It may be better for consumers and the company overall, but as long as there are other douchebag companies(Verizon, ATT) out there that still have subsidies, relying on customer ignorance and advertising, then it will be tough for T-Mobile. However, I do not wish for them to give up. Keep up the good fight!

  • me

    As a former employee the problem with the value plans always came up when someone was having phone issues. The thought of paying 22 installments for a phone that is giving someone trouble after a few months left a bad taste in their mouths. Sure if you keep your phone for more than two years you see some great savings but how many people do that? Either your phone is horribly outdated and need a new one or most of the time phones just don’t last two years.

    • Very valid point you have there

    • Edward351

      I understand your point, and its a valid concern considering how customers perceive and deal with carriers. The problem I have is that there is a disconnect between the hardware and a contract that most people don’t pick up on. No hardware has a two year warranty; I can’t think of one manufacturer who would cover their hardware more than 12 months out. On the subsidy model, I’m still paying for hardware, I don’t have coverage for problems, and I’m still responsible for an Early Termination Fee if I want to cancel my contract before the end of the term. This always rubbed me the wrong way; add that with the increasing complexity of smart phones and possible breaks/failures and I really like knowing what I own and what my responsibilities/rights are upfront.
      I think its hard to get around that at the beginning, but I think that’s better for the consumer in the long run.

    • Durandal_1707

      But it’s the same thing *anyway*, even on the Classic plans. You’re still paying for the phone each month, and you still have to wait two years before you can upgrade.

      Actually, the Value Plan is better in this regard, since you can just pay off the old one and buy a new phone on EIP anytime you want, without having to wait for your old contract to expire first.

    • Kinda like buying a car. If you wreck it with no insurance, you still have to pay monthly for a car you don’t have for up to 5 years. That has to suck.

    • Jason

      What options do customers on Classic have for faulty equipment that customers on Value do not? Your point doesn’t stand up. In fact, if you want a new phone on value there are options to sell off your current device, pay off old device, and purchase a new phone at a cheaper out the door cost than any Classic upgrade would offer. No waiting for upgrades either.

      • David

        Exactly! I agree entirely. Its just a challenge to get customers to understand that sometimes. What we do is actually do the math and show them the savings over two years (the length of any contract) is actually more than the full price of the phone. So yeah, you pay 199 for a GS3 on AT&T but over the course of the contract you will pay roughly 800-1100 dollars more for the service. And with T-Mobile, if you get a big tax return or something and you want a new phone, pay off your old one and buy a new one.

        • me

          You all make valid points, I am just giving you the perspective of what I saw first hand on the phones. Nine out of ten customers aren’t tech savvy consumers, all they know is they bought the phone from T-Mobile and its giving them issues and they are still on the hook for another year and a half or whatever. Or they have to do a warranty replacement and they would say “so I still have to make payments on this phone even though your sending me out a refurbished device?” Its just the perception it leaves the customer with and in my opinion caused as much churn if not more than the iphone.

          On the classic plan the customers feel they already paid for the phone, they don’t have the patience to sit through a lecture about the phone cost is built into their plan. Like I said, value plans are great if you sit down and do the math or don’t care how long you keep a phone, but that’s a small market compared to the consumer who won’t want to figure it out or has been conditioned to upgrade their phone with a discount every 2 years. I think this article is spot on.

        • David

          You don’t have to be tech savvy to go with the Value plan. A good sales rep will do the math for you. So many people complain about how much their cell phone bill is but many would rather pay more because they don’t want to spend the time to understand what is actually more cost effective.

          So what you are saying is that someone would rather pay 200 up front for an iPhone, pay 110 a month for 2GB of data than to put down 200 for the same phone and pay 80 a month and after 20 months is goes down to 60.

        • scotty

          People just hate math and it confuses them so they get frustrated and mad.

        • Mr. Wizard

          “People just hate math and it confuses them so they get frustrated and mad.” – I agree. Them’s numbers thing so damn confusing. There’s just too many of them’s numbers and they’re all different.

        • fentonr

          I feel like someone needs to respond to this. I found it funny.

        • ME

          That’s exactly what I am saying. Your making the assumption that people make calculated decisions instead of impulsive ones. Most of the time the opposite is true. People either don’t have the time or desire to to look at all their options and do the long term analysis and choose the best one. If they did maybe T-mobile wouldn’t be where they are.

          Not to mention the fact that lowest price doesn’t trump all. People will pay more for a premium product and right now Verizon has the perception of being a premium brand.

        • David

          T-Mobile reps will do the math for you. All you should want to see is the amount you save. I think people don’t understand how much mobile phones and service costs. If you are in an area in which you get just as good of service with T-Mobile as you do with Verizon, you could be paying 40 bucks more a month for the same service. All T-Mobile is trying to do is show people that you don’t have to pay 110 dollars for a single line of service with data. 88 bucks a month gets you either 500 minutes and unlimited data or unlimited talk and text with unlimited data with the 2GB 4G limit. That is also including the phone payment and insurance every month. Most people are either heavy talkers and light data users or the other way around.

        • Prod1702

          Most people are also not that smart in thinking. As a T-mobile Rep i tell people that are having problems understanding the Value plan to look at it like this. If BMW wants to give you a nice BMW M3 for free, but then charge you $5,000 a tire. People think omg i could get a new BMW M3 for free hell yea. They don’t look at the cost of the tires and say hey i am going to pay more over the life of that car if i do that. People want cheap up front, but there are people that look at it and say wow i am saving that much if i go with a cheaper bill.

        • web

          First off, you exaggerating the Att prices and how much you save. Secondly, for the exttra you spend with Att you get better service, quicker updates and access to better phones.
          Thirdly, with new p hones coming out constantly, the value of phones drop dramaticly. I know first hand. After a year I tried to sell my phone and couldn’t even get the price to sell it off. No good.
          Finall, when I did sell my phone, I still owed $100. Plus, you be maki ng payments on your phone for the duration of your tmobile account

      • AndroidProfit

        I can see what he may be implying. If you are in month 13 with 9 months to go and the phone is giving you issues you are SOL. Your 1 year warranty has already expired.

        • Matlock

          tahts why they offer extended warranty plans with PHP packages! If you are doing the value plan or the Classic plan its always worth it to at least get PHP Warranty, so you dont get stuck in situations like that!

        • fentonr

          Agreed, Matlock. I can’t say I feel bad for people who find themselves in that situation after they’ve been warned. Also, after 13 months, you would have over half of your equipment credit line paid off and could get a new phone so the situation is the same as if you were on classic.

    • archerian

      The real value of Value Plans will be when $300 devices like the N4 become more popular. The whole Classic Plan legacy is based on subsidizing the expensive device. Take that away with lower device costs, and everyone (including the other operators) will have to move into something similar to Value Plans/Prepaid.

      • Nearmsp

        just wait 1 year or so for the flood of cheaper smart phones from China that run on the Android system. Already Apple and Samsung are struggling in China because of this.

  • NinoBr0wn

    Stupid US consumer market

    • AndroidProfit


    • Value plans are the worst! If you bring your own device and not needing a family plan, why the hell would anyone sign a 2 yr contract for such a idiotic plan? Monthly4G is clearly the better choice as far as REAL savings.

      How about get rid of Value & Classic plans and bring back Even More Plus!!! Best no-contract plans ever with postpaid benefits that allowed you to have multiple lines on one account. And just only allow EIP to those who qualify but make them pay half upfront plus the first month.

      Advertising a BYOP program to a silly plan that requires a 2 yr contract is just straight BLASPHEMOUS!!!!

      • PiCASSiMO

        Do show me a month to month plan for my family where I share 1000 minutes, unlimited texting, and 2GB data for each of the two lines for $80 a month?

      • mike

        even more plus is the same as value, just without the contract. but you are mistaken, as you need to understand that there is value in being allowed to make NO INTEREST payments on an expensive phone and have such a cheap plan. It’s called TIME VALUE of your money. retard

        • Yeah, and how the $35 activation fee per line taste? $200 per line ETF as well. Haha! Not to mention even if you are able to make “interest free payments” on the value plan, you still gon want the latest and greatest phone each year I bet, or even when you pay it off which will be nearly 2 yrs later.

          So where’s the value again?

        • Jose Hernandez

          The Value Plan is designed to give you a lower monthly rate that saves you money, compared to a regular classic plan. (Some people have stated that they can pay lower rates with classic plans btw, so every situation might be different) You can bring your own device and not worry about buying a new phone, if you do this, you do not have to worry about EIP (payment plan), If you choose to buy a phone, you can just pay it off all at once, or make a down payment and use the EIP option, you will them pay (interest free) small payments ($15-$20) until you pay the remaining balance off. With this option, you can pay the phone off as soon as you want, you don’t have to wait to make the other 20 monthly payments, once you are done paying your phone off, you enjoy lower monthly rates, unless you get another phone and use EIP again. Basically you can upgrade whenever you are able and want to do so. The faster you pay the phone off, the sooner you get back to paying the lower monthly rate. Now if you do use the EIP, you will then be locked in to a 2 year contract. T-Mobile needs some type of insurance against people just getting the phone for a low down payment and them just canceling their contracts without paying the balance off. No one on their right mind would allow that to happen. If you cancel your contract early, there is a penalty for it, like every other carrier, you then must pay the balance on your phone and bill. Like any other carrier. Activation Fee? Doesn’t everyone else charge that? And guess what, sometimes they do have sales that give it for free or they wave it. Plenty of people do buy a new phone every year, and they do it using the Value Plan, Again, you can pay off the phone whenever you want. Now, If you can’t afford to do so. That is not the carriers problem. You just get a new phone when you can afford to do so. Just because You don’t see the value on the plan, it does not mean that other won’t see it or rip the benefits. And, once you are on a Value Plan, if you buy your next phone cash on the spot, you don’t have to extend your contract. You can even buy the phone on EBAY if you want, just put your sim card in. No new contract needed

        • Lol I been knew all that. Now explain that to others that are either use to subsidies, or a BYOP type customer. All that “paying it all off to enjoy lower rates” on Value Plan doesn’t make sense when you can just buy the phone outright from wherever on Monthly4G with no activation fee, no ETF, and most importantly, no contract. The only real benefit I see in VP is if you need multiple lines on one account. Hmm but then activation fees and EIP down payments can get quite costly on family plans, don’tcha think? Also VP activation fees might get waived during a huge promo sale once a year so lets not act like it happens often becuz it don’t.

        • Jose Hernandez

          I never said it happens ofter, just that it does. And rare as it may be, some stores have been known to wave the fee, the loyalty department has done it as well (for my wife and myself) You can buy any phone you like cash, however, you can’t always get the best phones for prepaid service. Unless you buy them from a third party. Montthy 4G is a great way to go, but if for some reason you want to just do a down payment and pay the rest over time (you just can’t afford a $700.00 phone) VP is the way to go. I am under the Value Plan Unlimited 4G. I chose this because I get unlimited data at full 4G speeds all the time. Something you can not do with a Monthly 4G plan. VP will work for some, and not for others. If it does not work for you, then it doesn’t work for you. But it does work for a lot of people out there. I know what you mean by people being used to subsidies, some people just won’t be willing to understand the way this works. but then again some people will. Look at MetroPCS, people that chose to go with them understood the principle of byop or buy it at full price. The difference with MetroPCS is that since they do not offer the EIP pay over time option, they don’t need to have you sign a contract. That’s the only way I can explain it or see it. I am extremely happy i chose the plan I have, and I made sure I understood it before I signed up for it. It would be nice if everyone could say the same. BTW, you do make a good point, I understand what you are saying and agree to a point.

        • You make great points also, and your comments are a good read. Now as far as this goes “And rare as it may be, some stores have been known to wave the fee, the loyalty department has done it as well (for my wife and myself)” – well yeah, you and your wife are existing customers. Its rare that new customers get anything waived when signing up. As far as your $70 plan on VP with Truly Unlimited 4G, that is a great plan and probably for most people. No worries about throttling, I get that. But if you seriously don’t go over 5GB of 4G data, then whats the difference between that and the $70 plan on M4G thats no contract and activation fee free? I get your sentiments of VP and EIP it may work for others, but those who are on VP are still paying a lot more over time than they like to admit. I personally think it should be no contract and just EIP for those who qualify.

        • Jose Hernandez

          I agree with you. It really depends on a case by case. The only way to get the best deal is to make sure you are as informed as you can be on all the options available and then make a choice on what plan will best serve your needs and give you the best bang for your money. Could not agree more.

        • Agree! I think the problem is with most ppl is that they are not as informed of other “options” out there or just refused to care and and just go off what is advertised to them. The problem with Value Plans is that they are being advertised good, but most consumers will think they can simply jump on the “low rate plan” and leave out the store with a high end phone, and that’s not the case unless they get a bogus rep that put them on VP without them really knowing it (I know a few ppl who this has happened to). Its almost like FlexPay allover again.

    • bleeew

      Yup, they don’t know that they still buy the phone thats inside their monthly payments for 2-years.

  • Very great point. We should fully understand what we are getting into. The fact that these huge companies suffered greatly for doing the same then maybe we should take their advice. Don’t you think?

    • We don’t know their model. As far as we know they could have just said no subsidies without cutting prices in plan or providing E.I.P. Like I said earlier, Tmo has been planning for this for well over 5 years, didn’t think it would happen, but here it is.

  • terryjohnson16

    It will be trial and error for T-mobile. They won’t learn if this was a good thing until Q1 2014, when all four 2013 quarters have been spoken and accounted for.

  • youngt82

    My whole thing is should the carriers (T-Mobile) etc..should give customer better options especially nowadays since there’s a new device coming out every other week???

  • bringing your own device might not be such a good message especially considering not all devices are able to work on TMO’s network. .. i understand Value Plans but i can see a significant backlash too .. people are generally stupid when it comes to plans and now they save or don’t save over the course of the contract. all they’ll see if up front costs etc no matter how much you explain it to them.
    so doing away with Classic Plans is a huge risk for sure.

    • 21stNow

      The BYOD push is meant to go along with the 1900 MHz band refarm. I agree with what you are saying, though. Too many areas of the country have not been refarmed yet for T-Mobile to advertise bringing most non-T-Mobile phones over to the network.

    • Christopher_McG

      All of the BYOD devices (GSM albeit) can work on T-Mobile, they just might not get 3G…

  • JBLmobileG1

    I personally think this might be a bad idea for T-mobile in the long run. They will probably lose quite a few distributors, Walmart being one of them, because they don’t offer value plans. Could this be why Tmobile wants Metro PCS and is starting to get more involved in the prepaid world? Maybe to help them offset some of their losses with their postpaid Value Plan only move? I know it is this way in Europe, and being that Tmobile is owned by a European company, it’s no wonder they want to go this route in the US. I guess time will tell how this all works out for them, and hopefully for the better.

    • Wow WalMart, Oh how I loathe them! I know how tmobile needs walmart, but if I was in control of tmobile usa, I would not trust these walmart imbeciles to properly educate customers on the advantages of the value plan. SN: Please don’t come at me with crazy talk because I called Walmart employees imbeciles. My mother works there and we are both aware of how *insert word of your choice here* the employees can be. AON: May Walmart burn. Ok, rant over, have an awesome day.

  • thepanttherlady

    If T-Mobile heeds this advise you can bet Classic plan out of pocket subsidies will continue to climb as they have with the last couple Samsung releases. Classic plan customers paid more out of pocket up front than Value plan customers.

    • party_nickel

      subsidies continue to climb? then the initial device price would be lesser. Also, there is a significant user base who don’t buy from T-mobile at their prices. T-mobile is decreasing the subsidy on Classic Plans on their stores and sites as they are pushing for Value Plans, but 3rd party retailers who only sell Classic Plans are pushing them at better prices.

  • BallaOnnaBudget

    Not very encouraging for T-mobile, coming from a company that has already been down that path they should heed this warning very carefully.

    • #ExEmpolyee, Tmoible has been planning for this since before the value plans came out. I didn’t believe it, but here it is…

  • EAS

    Who’s gonna pay full price for a phone?? Certainly not the bargain-seeking T-Mobile customers. DO NOT GET RID OF SUBSIDIES.

    • thepanttherlady

      I do.

    • Jim Shepherd

      They are not really getting rid of subsidies. With the Value Plans, you can buy a phone with a down payment similar to subsidized phone prices and then pay the remaining balance over the next 20 months (a similar increase to the monthly rates as a subsidized plan is over a value plan). All T-mobile is really doing is separating out the amount you pay per month for the service and the amount you pay per month to subsidize the phone. The other plans just mix these two together and keep it at the same level even after your phone has been paid off (20+ months).

    • I did, 3 times SK4g #horrible, HTC Sensation #Great #Buggy, Nexus 4 #FreakingLovely!
      Then inn addition I paid asurion $130 for a replacement for the sensation and acquired a One S in exchange.

    • 21stNow

      I agree with your sentiment. Plenty of us who are on this board pay full price for phones, but I agree that typical bargain-seeking customers are not thrilled by this proposition.

      • xmiro

        nobody likes bargain seeking customers, look at how many businesses complain what happens after they use Groupon or any of the other discount sites and the types of customers that it attracts

        • 21stNow

          But, T-Mobile is promoting itself as the Value Leader among US carriers. They depend on bargain-seeking customers.

        • xmiro

          true, I forgot now what my point was I was trying to make.
          I guess it’s the feeling, on the surface anyway, that you’re getting a good deal that would drive some people out to whatever carrier even if it’s not true. Or that certain types bargain seekers won’t be happy no matter what so they aren’t worth pursuing.

    • Edward351

      I pay full price when I don’t buy my phone from T-Mobile, so if getting rid of the subsidies lowers my monthly bill then that sounds good to me.

      Even though I will use T-Mobile as a carrier, I doubt I will buy another phone from T-Mobile. They always seem to get lesser versions of similar handsets, and even when the handsets are equal, the pricing is not (GS3 for example).

      I don’t mind paying full price for a couple of reasons. Firstly, I can buy an unlocked device and if I change my mind I can easily sell it. Secondly I have more choices; I can pick phones that don’t get sold in the states, or phones that are restricted to other carriers like the One X versus the One S.

    • not4sakn

      You’re paying full price however you want to look at it. Either by breaking it up into installments or paying more monthly on your plan to cover the price of your “discounted” 2 year upgrade.

    • Bud

      i have a gs3 and iphone5 . i paid full price for both. been tmo for 10yrs.

    • Cruise Guy

      EAS. Do the math. A Samsung GS3 at ATT is 199.00 subsidized. An unlimited plan is $139 per month. That is 3336 plus 199.00 = 3535 for two years of unlimited with a Subsidized phone on an unlimited 5 gig data, unlimited talk and text. Now at Tmobile, its $69.99 per month plus the cost of the phone. You can make payments over 20 months or pay for it up front. So $1679 for 24 months of service plus $600 for an unsubsidized phone is $2279. Do you really want a carrier that charges you a really really great deal on a subsidized phone and shafts you for service for a total of $3535 when you can buy it up front or on an interest free payment play for only $2279? Subsidies are fooling you. By the way, I hear that XYZ mobile is giving away the Galaxy S3 for free plus you get a check in the mail for $200. Isn’t that neat? But the monthly service is $200 per month. Do you start to see that subsidies aren’t always a good deal.

      What is Honda gives away their Honda accord for Free. But you are required to buy gasoline at $200 per gallon, and you must buy 200 gallons per year. Its not always great to get things at a discount.

  • Jim Shepherd

    I really don’t see a downside to the Value Plans. With a Value Plan you have a low monthly rate and you can either bring your own phone for no additional cost, buy a phone at full price up front with no increases to your monthly bill, or put a down payment on a new phone through T-mobile for the same price as a subsidized phone on other networks and pay the remaining balance over the next 20 months (and then return to the low rates).

    With all of these options you are saving money. Additionally, if you keep a phone for longer than 20 months (waiting for the next big thing) you aren’t paying the subsidized monthly rate, i.e. giving money to the carrier for no benefit.

    • 21stNow

      The downside that I see is the two-year contract for Value Plans.

      • Jim Shepherd

        Agreed, contracts that lock you into a carrier are not great. That is what pre-paid plans are for.
        For me it is a positive. T-mobile only gives corporate discounts for contracted plans. With Value being a contract plan, I still get %15 off my bill.

      • Chris

        I believe the contract is only there when you first switch to it. Otherwise, you are free.

        • 21stNow

          I thought that you had to renew the contract if you ever wanted to take advantage of the EIP again. I’m not sure of how this works since I’m not on the Value plan and haven’t had a chance to see the original two-year contracts expire since the Value plans are less than two years old.

      • PiCASSiMO

        I thought about that, but really, where else are you going to go? Take your phone to AT&T after unlocking the phone and pay more per month.

        The 2-year contract does sound bad, especially if I simply bring my old phones from Classic Plan, and if I want to leave after 1-year, I have to pay ETF, which I think should ONLY apply for people who have to pay off their 20-financed months.

    • harry

      how many people keep a phone longer then 24months?

      • Mark

        My S/O has had the same Samsung flipphone for over 4 years.

        Here’s a question that I’ve been wondering about: are Value plans offered for non-smartphones with no data plans?

        • archerian

          yes, Value Plans start with only minutes as part of the plan, you can add Text and Data to it or just use as a calling only plan. A 2 year contract is still required. IMHO, if all you need is Talk/Text, you might want to buy a feature phone from T-mobile’s Prepaid lineup and get a Simple Mobile Prepaid SIM. They have unlimited talk and text for $25 no contracts. The Value Plans (and most plans from operators in general nowadays) are built to make money for them based on two words – data and unlimited.

    • On value plan, you still get hit with the $35 activation fees per line, not to mention the ETF if you want out of the 2 yr contract. I don’t care how much you saving compared to classic or AT&T plans, I see no value in Value Plans. Especially for those who get their phones on EIP and then want the latest and greatest every year.

      Haha have fun playing Classic prices on a Value plan becuz it will never end.

      • Cruise Guy

        Actually you save a lot. Just do the math. I would be happy to explain it to you some time. It appears like that, the way you explained it at first, but you will guaranteed save a ton.

  • eanfoso

    Hehe I love Telefonica, they’re just as cheap as t-mobile, they’re the only operator I use when traveling outside of the us, only when I go to Mexico though

  • Telefonica is right its tough to sell people on fronting $350 for a device that they could get on contract for free and its not even like the value plan is a non contract plan where it would be able to make much more sense.

    • Jim Shepherd

      But you don’t get the $350 phone for free on contract. The cost of the phone is embedded in your monthly bills in the guise of higher monthly rates. In fact when getting a $350 subsidized phone for free, you are arguably getting a bad deal since you are paying the same monthly rate as someone who just got the top-of-the-line $700 phone (but only paid $150 more upfront). The carriers are not getting or giving the phones for free (perhaps bulk discounts though). The costs to the carrier for the phones is spread out over all of the contracts.

      So it is very possible that everyone trying to save money by getting an inexpensive phone is actually subsidizing in part other people’s top-of-the-line phones.

      • What higher rates? $20 extra a month? I did the math and unless you are on a individual plan you are paying more. My family for example is a family of 3 so now you are telling me $20×3=$60 a month extra is cheaper in the long run and on the monthly? I call bs. On a value plan you will still have a contract you will still have a data requirement which honestly you should have if you are paying full for a phone. I understand the embedded costs associated with the classic subsidizing the phone and what not.

        here is the math 3 lines unlimited everything (nationwide) first 2 lines $159.99 add a line cost maybe $30 for the same features a grand total of $189.99 initially no phones included. Now add the phones, Lets say an upgrade fee of $18 per line x 3 = $54 all of which only are 1 time fees and you want say A note 2 from wirefly for $250 each line. $250×3=$750 now we want to protect our phone so each of us pays say the grandfathered price of $7.99×3= thats around $24 a bit less with change. So far your fees are still 189.99 a month so add all that together $190×24+$24*$24+$54+$750=$5940 after all is said and done.

        Monthly is 190+24= $214/month 3 line Classic Plan

        Now with value plan you have to buy that full price lets say no discount because with value there is none.

        You start out with the plan its $164.98 in total every month, you pay $259.99×3=$780 and $20x22x3=1320 adding in the same protection is 7.99×3= roughly $24… Lets add it all

        $165(Monthly charge)*24+$24(Insurance)*24+$780(Device Upfront)+$60(EIP)*22=$6636 when all is said and done

        $165+60+24=$244/month 3 lines Value Plan

        So $6636-5940=$696 I save by just being on a classic plan.

        Not only do I save in the long run before taxes I also save in the short term and in upfront fees. (All values have been rounded up before calculation for easier clarification)

        So again what value in the value? unless you buy used or old you are cheating yourself.

        • Chris

          lol, if you’re going to wirefly for an upgrade on your classic plan to get something cheaper. then I suggest you compare a phone price that’s also outside of T-mo pricing, you’ll get a lot of phones such as Note II cheaper on amazon, etc if paid in full price.

          You already have a 1 year manufacturer’s warranty why would you want to pay $7.99 monthly for a phone? Also, if you’re going to pay $200+ for a phone, you shouldn’t break/drop it anyways. I haven’t used $7.99 protection plan on my family plan. It’s even cheaper for me to just save the $24 bucks a month and buy a new phone for either my mom or my dad if they break it.

        • I don’t necessarily go to wirefly for upgrades but just used it as an example though for comparison sake. Amazon every time I look there it gives me some jacked up upgrade prices like only $50 off of a One S like who would?

        • Mike S

          please read what i posted above

        • I read it

        • Chris

          just sayin. if you will use a low discounted price for comparison’s sake. there are places where you can get low full priced phones also for comparisons sake. just saying if you didn’t look at full savings on both, then the comparison becomes biased – you will always get a lower prices on the classic plan because of this.

        • Mike S

          I love getting customers like you, so afraid of change that you’ll convince yourself that the old ways are better.

          Let’s point out your errors.

          To start, Classic plan: $159.99 for the first 2 lines plus $60 dollars for line number 3 to have unlimited talk,text and web. Add $24 dollars for 3 lines to have insurance. That brings our total before taxes to $243.99.

          Value plan: $119.99 for the first 2 lines plus $40 dollars for line 3 to have unlimited talk,text and web. Add $24 for insurance and we’re at a grand total of $183.99 before taxes. Taxes are important but I’ll get to that later.

          Next is phones, going thru wirefly you claim to be able find the Note 2 for $250 per phone. $750 for 3 phones. This falls under classic pricing.

          On value, I’m going to simplify things because it’s much easier to multiply the monthly reoccurring charges by 24 months and add the full cost of the 3 phones. So it’s $699 per Note 2 PLUS a $100 rebate per phone for a total of $599 down. Or $1,800 if you’re okay with me adding the 3 cents that wont matter anyway.

          Let’s say taxes are 20%.

          Classic: $243.99 + $97.60 in taxes = $341.59 x 24 months = $8,198.16 + $750 = $8,948.16

          Value: $183.99 + $73.60 in taxes = $257.59 x 24 months = $6,182.16 + $1,800 for phones = $7, 982.16

          That is a total savings on VALUE of $966 dollars over 2 years.

          Even with your wirefly “discount” its still more expensive. Hell even if you payed $600 dollars to migrate all 3 lines to value you’re still going to save $366 dollars over the 2 years. BOOM!

        • Mike S

          Oh and in case you want to argue that if you factor $60 worth of EIP plus the $257.59 you’re still looking at $317.59 because you’re not being taxed on the monthly equipment installment payments.

        • your taxed upfront tho… learned the hard way

        • Mike S

          I’m aware of this, BUT it’s roughly $50 – $70 more upfront.
          If you look at my breakdown, tax was almost $30 more on classic, so i’ll take the one time extra of like $50 bucks, hope that makes sense

        • Lol idk know where on earth you have $60 for a 3rd line from in regards to classic, it says it on the site $30 add a line. I didn’t factor in taxes because taxes differ in all areas.

          Lets do the math if im wrong

          $220×24+$24×24+$18×3+$750=$6660 before tax Classic

          220+24=$244/Monthly charge

          T-mobile themselves have stated rebates in general don’t apply to value plan unless you guys changed something in the last day im not going to count that.

          3 line unlimited nationwide4g amounts to $164.98 according to the website.

          $20x22months for EIP amounts to $440 and so down payment would be $260

          So you have

          $165×24+$24×24+$60×22+$780= $6636 before tax Value still $36 buck difference on saving

          $165+24+60= $244/month

          but for tax sake lets tax classic

          750(device)x.2(20percent)= $150 in tax

          Final tax device= $900

          244(plan fees)x.2(20percent)= $45 in tax

          Final tax plan= $293

          So classic device is $900(device)+$293×24{7032}(Plan with tax)+54(upgrade fee)= $7986 Final price taxed

          Lets tax Value

          780(device)x.2(20percent)= $156 in tax

          Final tax device=$936

          This was a lil tough to factor the actual plan considering the $60 is for 22 and not 24 months and unsure if that gets taxed too.

          Any way $165+$24(plan fees)= $189x.2(20 percent)= $39 in tax

          (Final tax plan) not including EIP= $227+60 for 22months only(EIP)

          Final tax price most months for EIP is $287.

          So Value device is $936(device)+$227×24{5448} (Plan with Tax)+60×22{1320}(EIP)= $7704

          So actually you are right different math but a savings of $282 after tax is considered and a $6 monthly saving over classic. Though you still put up more money on value. Again though thats if i’m wrong about the add a line being 30 if thats not true then you deduct 30 from the plan drop before tax to $214 and that tax is $43 leading the monthly of classic being $257×24=6168+900+54=$7122 and classic leads the difference by $582 over the length and $30 less a month

        • Mike s

          First off, EIP is for 20 months, not 22. Second the add a line cost of 30 is only for talk and text. Third, until December 20th T-mobile has a $100 rebate off the downpayment on the Note 2, making it relavent now

        • last I checked some of those sheets said 22 but not that that truly makes a huge difference at all.

        • Guest

          Bravo. Its nice to see someone that knows what they are talking about on this discussion finally. Thanks.

        • One moment

        • lets start with data plans are NOT required on value plans.

          $99.98 First two lines(Talk & Text)
          $30 additional line
          $30 unlimited data per line
          $7.99 per line for insurance

          $243.95 per month

          $369.99 x 3 = $1109.97 (subsidized phones)
          $18 one time upgrade fee($54)

          ($243.95 x 24) + $1109.97 + $54 =
          $5854.80 + $1109.97 + $54 = 7018.77
          $79.99 first two lines(Talk & Text)
          $25 Additional line
          $20 unlimited date per line
          $7.99 per line for insurance

          $188.95 per month

          $899.97(Upfront cost of phones x 3)
          $60 for phones for 20 months
          $0 upgrade fee

          ($188.95 x 24) + (60 x 20) + $899.97 +$0 =
          $4534.80 + $1200 + $899.97 + $0 = $6634.77

          $7018.77(classic) – $6634.77(value) =$384


        • Not to mention, all of this is a pointless debate if you look at the bigger picture. Tmo’s classic plan where still cheaper then the other big 3. Factor that in, your more than likely saving close a capital G

      • If you read my example above you save $30 a month on a classic 3 line in comparison to the same thing on a value plan $696 over the length of the contract by being on a classic plan!

  • fqcharly

    How is value cheaper when you have five lines? I get “best upgrade pricing” available for all five phones every 22 months, sometimes even less. I only pay $10 per extra line, plus data. No way would I consider paying $20×20 months x 5 lines when I get the subsidized pricing for all 5 lines on a classic family plan.

    • Jim Shepherd

      Value plans are not as compelling for family plans, but when I did the calculations for our family’s data needs and each line getting a new phone every 24 months, the value plan still saved us a good bit of money. Don’t forget that the base price and data fees of the Value plans are lower than Classic as well as lower extra line fees. And now that you can get a high-end phone for only $300 unsubsidized (Nexus 4 8Gb), the Value plans are even more attractive.

      • church. But I think family plans save you more. Infact, I know family save more compared to single plans… once you consider the add ons.

    • Zach Mauch

      You’re monthly price on the value plan would also be cheaper by $20/phone. Also, the “$20/month” isn’t for every phone. Many are $15, $10, or even $5. If you get an expensive phone, it’s at worst a wash. If you get a cheap phone, you save a bundle.

    • not4sakn

      Classic has $10 add-on’s, Value has $5. 2GB data on Classic is $20 while it’s only $10 on Value. Depending on the phone’s you purchase, the installments can range from $3-$5, up to $10, 15, or $20. Value clearly has the potential to be less expensive than Classic especially when the phones are paid off.

    • CRT24

      Using a simplistic example: Let’s say you are doing 5 lines all unlimited talk, text, and web with all 5 purchasing GS3’s
      Classic 5 lines = $381.00/month including taxes + $1400 for phones after MIR = Total cost of $10,544 for 24 months. Up front cost for phones = $1650.00 + Tax
      Value 5 lines = $286.00/month including taxes ($386 for 20 months while paying for phones) + $2750 for full cost phones = Total cost of $9614 for 24 months. Up front cost for phones = $750.00 + Tax
      Total Savings on Value Plan = $930.00 over 24 months.
      So you can see that you down payment is much less on phones for the Value Plan and your savings over the life of the contrat is still almost $1000 and your bill whil paying for phones is virtually the same in this example. If you were to choose less expensive phone where the payments are $15 or $10 then the saving become even more because on classic you are paying $381.00/month regardless of which smart phone you have.
      The numbers have been done a thousand times and value wins virtually every time….the challenge for us will be communicating that message through effictive advertising but the numbers dont lie folks! And the savings are even greater when you compare to the competition.

      • archerian

        virtually every time? certain Classic Plans are cheaper (or differ in a few dollars) over the life of the contract (example: the fixed minutes ones) especially when they are bought at 3rd party retailers. Additionally, existing Classic Plan customers can move to Loyalty rates towards the end of their contract. Most loyalty rates are better than Value rates with Classic Plan subsidies and freebies.

        • CRT24

          There are no classic plans that are cheaper than value and there are no “loyalty plans” offered any more, it is either classic, value, or m4g and even the old loyalty plans are not less than value…..when I say value plans are a lower cost virtually every time, I am comparing them to current classic plans or current offers from other carriers and in that context, yes value is better virtually every time…..Of course there are oder legacy or “loyalty” plans that could give you a lower 24 month cost than value but never will you pay less up front for phones on these plans than on value when compared to normal phone prices direct from a store……unless you are getting the high tier smart phones for free from a 3rd party then that obviously changes things a bit but there are a lot of suppositions in your argument dont you think?

        • archerian

          so when you said Value Plans are cheaper that Classic you meant the monthly payment? That does not necessarily mean a lower 24 month cost, which is what customer should be looking for. A few more pointers: Yes, there are still loyalty plans, they are called Preferred Plans. Their rates (monthly) are almost always lower than Value for the same service, and depending on how much your ARPU is, you will get a very good discount on devices. All this adds up to lesser cost over a 24 month period.

          My point is simple – not everyone needs unlimited everything, in spite of what T-mobile or anyone tells you. There are no suppositions when I say several customers don’t opt for unlimited everything, and they buy devices form 3rd party retailers. These customers can possibly get a lesser 24 month cost than corresponding Value Plan customers. A customer who buys from a 3rd party and doesn’t opt for UL plans is a common scenario.

    • xmiro

      That depends, what classic plan you have now and what devices you want to get.

      under value plan if you were to go on monthly payments it would take you 20 to pay the device off. Or you can use it 4 months sell it and pay it off and get another device. If i’m not mistake T-Mobile’s CEO hinted at “new value plans” during the speech so it doesn’t necessarily mean things won’t change between now and whenever Value is officially the way to get service. Which is why I am sitting on the sidelines and waiting

  • If T-Mobile market it right, it could work. They will have to push the EIP heavily. Advertise the downpayment cost of the phone, point out that with the Value + EIP the costs are similar to subsidized plans, but with benefits – you can pay off the EIP early, if you want, and once the EIP is paid off, your monthly costs go down, until you want a new phone. Cost wise, I think it works out very similar for a consumer who wants a phone for cheap up-front cost, while offering substantial benefits for those why want to BYOD or pay full retail. It’s all a matter of educating the consumers, and T-Mobile will need to be on its A-Game for not just that, but for countering any attacks on the model by Verizon et al.

    • 21stNow

      Your last point is where I think that it gets really hard for T-Mobile. When Value plans first came out, we were using spreadsheet-type analyses to explain this to customers in the T-Mobile forum. We didn’t win many friends with that. Verizon Wireless has been very effective at advertising. For the typical consumers, VZW will easily be able to convince them to stay with the subsidy model. The company that came up with “Can you hear me now? Good!” is definitely going to be able to come with both barrels blazing against T-Mobile’s Value plans.

      • Although I agree that Verizon is very good at advertising… I don’t see how they could convince anybody that subsidy model is before when you pay the same amont down on a phone, but your plan is tens of dollars cheaper a month. Infact I think verizon would have to lower there plan tremendously to even be able to counter tmobile b/c the monthly cost would be a huge increase compared to tmobile. Hell even if tmo customers jump ship, once they see how much these other plans would be… Mm Mm Mm Mm Mm!

        • 21stNow

          Easy, they are not going to focus on the monthly recurring costs. All they have to say is something along the lines of “Other carriers charge you full price for your phone, which for many of today’s devices is over $600. Come over to America’s largest 4G LTE network and enjoy your top-of-the-line handsets at an affordable price. Use that device at blazing 4G speeds in more places”.

          Verizon Wireless’ advertisers know how to keep it simple enough to speak to the masses. They leave out the facts that are not to their point or in their favor. None of their commercials (that I have seen) mention the higher price that VZW charges. Yet, VZW has the largest customer base of the cellular service providers in the US.

        • Well they bought alot of those customer with acquisitions, great coverage and great commercials. Never the less, legally they couldn’t say “other carriers” if there is only one carrier doing it. Secondly, I don’t think Verizon would attach tmobile(not for a while anyway) b/c tmo is going after at&t… Verizon’s biggest competition.

        • 21stNow

          My line was just an example, hence the words “along the lines of”. I’m not a marketing or legal professional, so I know that it would have to be improved upon to be effective.

          That said, aren’t Simple Mobile, Red Pocket and other MVNOs considered carriers? You have to pay full price with them. MetroPCS and Cricket are definitely carriers that make you pay full price for their phones, so the phrase “other carriers” could still work.

        • Good point

    • kk888

      Just pretend EIP as subsidy..

  • Vic

    I don’t get it, why in the hell does all these doom and gloom preachers ignore that T-Mobile offers device monthly payments, allowing people to pay for their devices over the course of 20 months?

    • 21stNow

      Because most customers think of cars and houses when you mention downpayments and monthly payments thereafter. They are not used to hearing that in regards to cell phones. If you mention it to them, they don’t see why they should change from what they are used to when they can go to any other postpaid national carrier and keep doing what they are used to doing.

      • xmiro

        which is pay more for the same thing

    • iTried

      What happens if you have a family plan with 5 lines and everyone wants a smart phone?

      • What happens is you still save money. With another carrier, you’ll probably spend 150 more a month. That $3600 more money over a contract. Factor in phones… Still pay same upfront pricing as the comp subsidy price plus an extra 200 to 300 per phone. Yep, thats 1500 more on the phone than you would have spend at Verizon but you would have spend more than twice as much on the plans over two years.

      • zacamandapio

        Family of 5 here:

        -1st line: Unlimited minutes, messages, insurance, international texting (calling) and Truly Unlimited Data.

        -2nd line: Unlimited minutes, messages, insurance and Unlimited Data (2GB 4G).

        -3rd line: 500 Whenever Min (unlimited mobile to mobile, nights & weekends), unlimited messages, insurance and unlimited data (2GB 4G).

        -4th line: 500 Whenever Min (unlimited mobile to mobile, nights & weekends), unlimited messages,and unlimited data (2GB 4G).

        -5th line: 500 Whenever Min (unlimited mobile to mobile, nights & weekends), unlimited messages,and unlimited data (2GB 4G).

        All for $198.00 + Tax + Fees + Yara Yara.

        That’s what happens if everyone wants a smartphone.

      • xmiro

        I don’t know, depends on what plan and how much data you add and which phones you want. And of course how much your state and local taxes skin you for

      • pbxtech

        With 5 lines and 2 tablet – $251 with EIP inluded.
        3 GS3 at 2gb data, 2 GN 2 with unlimited data and 2 Springboard with 2gb, unlimited texting in all.

        After EIP is paid, that’s when uncle sam returns part of my money, then monthly recurring charges will go down about $80.

        Mind you that I already consumed 120GB of data on 1 of GN2 device and still only pay that much, which for me is remarkable.

      • pbxtech

        i did forget to mention that I only paid $400 for 2 of the GS3 devices and $500 for one of the GN2 when they had the promotional deal.

      • Vic

        Add-a-lines have fees which are much cheaper on value plans, so adding a monthly device payment per line would either match classic plan add-a-lines or be cheaper.

  • lubba

    Upgrade now while you have a chance! By the end of Dec, you’ll have to pay 300-400$ up front just for a phone! Plus $20 per month added to your phone bill.

    • thepanttherlady

      That’s already happening.

    • Zach Mauch

      Do you even understand what value plans are?

      1. yes there is an extra $20/month, but that’s after a $20 reduction (in most instances) in plan price.
      2. NONE of the phone require 300-400 up front. The most expensive I’ve seen was the Note 2 at one point ($250) and that is cheaper than most everyone’s on contract price.

      The difference is the flexibility. You (the consumer) can upgrade at any point. Additionally, the major factor is true competition on phone pricing. If everyone does this, the manufactures might actually compete on price and our base price might drop from the INSANE $600 it is now. Just look at tablet prices if you want proof of what real competition will do.

    • Meh its just upgrades I have no problem buying full price but I won’t lie full price is sky rocketing too high tmo needs to calm down on the retail price high-jacking…. Phones shouldn’t even touch the $700 price range and now t-mo’s asurion wants to tier their plans

    • David

      That is not true at all. The phone with the highest down payment is the Note 2. No other phone has a down payment about 150.

  • Todd

    Does anybody know if Telefonica had something similar to T-Mobile’s installment plans? If not, maybe that’s why it didn’t work for them.

  • Not4sakn

    Even with a $20 installment for a high end device, the Value unlmited plan with 2GB Data is only $80 or $90 for truly unlimited. Forget the phone costs $600. If all I ask for upfront is $200 then you pay $80-90/mon which is still less than the competition. After 20 months you can either purchase a new phone and remain at the same rate you’ve been paying or take advantage of a $20 savings on your bill for all the same feature’s you’re used to getting.

    • Whitney

      I thought they had a plan for 69.99 for unlimited everything

  • 21stNow

    I think that the Telefonica execs touched on a key point- if other carriers aren’t doing it, you will lose your customers to those other carriers. A larger company could possibly take this risk. A smaller company (and one that is losing customers every quarter) is taking a big risk with this proposition.

  • Bill P

    What t-Mobile needs to do is show plan comparisons. Example, Note 2 that I checked over the weekend. Every carrier is carrying it and charging $299 upfront with 2 yr contract. T-Mobile unlimited talk, text, and data is $69. The phone is $299 w/ 20 monthly payments of $20 (or $699 w/ no payments) for a total monthly for plan and phone of $89 for completely unlimited. Cost of similar plans on AT&T and Verizon start at $139/mon (more depending on your data usage as they do not offer an unlimited data plan) and you still have to pay $299 up front for the phone.

    • Whitney

      Bingo that is what T-mobile needs to do. If T-mobile is going to keep Carly at least have her do like business ad like Verizon did bashing T-mobile

  • Durandal_1707

    The Value Plan is such a better deal for the consumer, that this kind of complaint simply baffles me. I think T-Mobile should get Bill Clinton to explain the benefits of the Value Plan, and then maybe people would get it. It’s arithmetic!

    • zacamandapio

      Ha ha.
      That was funny. If Bill Clinton says, then that’s what it is.

    • xmiro

      people do not want to do arithmetic. Why do you think car dealers sales people always ask what’s your monthly payment?

      • jarrod

        Actually my phone bill is cheaper now on value then it was on classic. It was $79.99 plus tax and I had 1500 mins unlimited text and 5Gb’s of high speed data, now my plan is $59.99 plus tax and I have 500 mins (which I only use 150 tops in a month) unlimited text and nation wide 4G unlimited internet. Granted I paid for my iPhone upfront so it wasn’t EIP’ed to the bill but still its the same or cheaper and you get more data and also that was a promotional plan no one can get.

        • archerian

          to put it differently, if you paid more than $480 for your iPhone, then the Classic Plan works out cheaper over the 24 month period. The 500 min Talk + UL Text + 4G Data is a common Value Plan anyone can get, nothing promotional about it.

    • archerian

      It MIGHT be a better deal in most cases, but if you are not a heavy user of minutes/data certain Classic Plan combinations will actually be cheaper if you do your math and buy from the right place and time. Additionally, if you are an existing customer, there are loyalty offers for Classic Plan customers.

  • Whiskers

    The problem with the value plans is the 2 year contract deal.
    If your bringing your smartphone from another carrier to T-Mobile and don’t need their EIP service , why would someone want to rope themselfs into a 2 year contract on a value plan . For the same price or less you can go T-Mobile Prepaid using the same T-Mobile towers since you won’t need T-Mobile for any phone support anyways.
    I can understand if T-Mobile is financing a new smartphone with the EIP service but other than that there would be no other reason to sign a contract.
    So T-Mobile going all Value Plan only in 2013 will be a big mistake . There is alot of people who buy their phones outright and won’t sign a 2 year contract when they can go Prepaid and get the same service with no leash attached.

    • Anon

      Wouldn’t these people just choose the No-contract Monthly plans? I believe it’s the same price.

      • Whiskers

        The T-Mobile no contract price starts at $50/month and that’s with only 100mb of internet use a month. Then it goes to $60/month for 2gb and $80/month for 5gb.
        So if your going to pay that you might as well go to Walmart for $45/month everything unlimited and get 2gb/month on the same T-Mobile towers and no contract.

        • Unlimited 5gb is actually $70. Value plans are still stupid unless you need a family plan and EIP.

        • iworkattmobile

          data is capped on prepaid at 14.4 mbps too…just so everyone knows. the grass isn’t necessarily greener.

        • Guest

          Thats not true! Just becuz your tied to a silly contract doesn’t mean you have to post nonsense about prepaid. Lol

        • Whiskers

          Does’nt matter , most areas your lucky to get anything higher unless you in one of T-Mobile’s HSPA+ areas or have your tounge stuck against the cell tower.

        • Bud

          that was f-ing funny and brutally honest. been with tmo for 10 yrs couldn’t
          agree more.

        • Whiskers

          Simple Mobile Unlimited Everything at 42.2 on T-Mobiles service.

        • i dont think thats true ive gotten 17mbps plus in Charolette NC and 19mbps in Northeast Columbia SC

        • Secret Shopper #42

          me too.. Have gotten 26mbps down in Orange County, CA, 14 in San Diego, and 18 in Ventura County.. (not on prepaid, btw).

        • archerian

          $70 on Value gets you uncapped data as long as you’re on T-mobile’s network

        • Whiskers

          Website states the first 5gb is up to 4G speeds , after that well it’s whatever you can actually use at turtle speeds..

        • archerian

          its unlimited 4G speeds, no throttling. This is the Unlimited Nationwide 4G on the Value Plan, the one without tethering.

        • Whiskers

          Simple Mobile smokes T-Mobile’s own prepaid plan and they are a MNVO using T-Mobile’s service.
          $50/month unlimited everything !

        • archerian

          They don’t offer truly unlimited, I believe they throttle after 2GB, and there have been cases of total data suspension beyond that. It’s a great choice as several customers really never need more than 2GB of data

        • I believe, and am willing to concede this point if proven otherwise, Simple Mobile is relegated to 3G speeds and, can affirm that as an MVNO, receives lower priority of the towers over T-Mobile Postpaid (particularly the 10Gb and 5Gb plans). So, “Smokin” speeds seems a bit outrageous of a claim.

        • Whiskers

          As stated before , i have used and tested the prepaid service through T-Mobile and Simple Mobile from Ohio to Las Vegas and have not seen a difference in calls/data on my HD7 phones at all.
          Now i know i don’t have a 42.2 HSPA+ phone , maybe that service is better i don’t know , but my 3G data works no different in speeds and all my calls work the same .
          Tested the prepaid services along side my wife’s T-Mobile Android phone on a postpaid contract as well , no difference in service was noticed.
          Not once did i get a “No Service” indication on my phone where my wife’s service was working .

        • GoSmartMobile-Rep _tony

          actually your wrong, simple mobile doesnt even offer unlimited data, they send u data warnings and eventually shut your data off without warning. lol. at max u get 3gb before they cut u off. and they do not use 100 % of T-Mobile’s network.

        • Whiskers

          Simple Mobile calls it unlimited because of T-Mobile’s BS unlimited advertising. My wife’s plan on T-Mobile’s postpaid plan is the 2gb/data plan and yes it’s unlimited but they throttle you down to edge speeds afterwards. So you are getting unlimited , just not the whole service of 3G/4G.
          Simple Mobile maxes your 3G/4G service at 2 gb , then throttle you down to edge until the end of your monthly service. And you do get 4G service with that if you have a T-Mobile HSPA+ capable phone . My HD7’s are only 3G phones.
          I have never been cut off even after going over the 2Gb max.
          As for not getting 100% of T-Mobile’s network , i stated above already that may be true but I have’nt seen any difference in calls/data service yet.
          And i have traveled across 3/4 of the U.S. using prepaid and my wife’s postpaid services through T-Mobile and Simple Mobile and i have yet to get a “No Service” indication from not getting all of T-Mobiles service.

        • Lol Simple Mobile is the worst! Ur not suppose to stream (Netflix, youtube, pandora, etc) with their “unlimited” plan or the suspension warnings will be issued to you.

        • Whiskers

          Never Ever got any warning like that and i watch YouTube all the time.

        • I’m not on Simple so I can’t confirm. But I know a few friends that are power users and dumped Simple Mobile becuz of their restrictions. Not too mention I have read hundreds of forums, thousands of comments/complaints and even Youtube vids on Simple suspending data services on their high speed plan.

        • jojo

          its 3g service only “high speed” my ass

        • Matlock

          I need unlimited data, so the value plan is just right for me! I use Nexus Devices so I dont worry about phone costs!

        • Thats great bro! But not everyone exceeds more than 2.5gb of data per month. I myself is on the Monthly4G $30 plan and have yet to exceed my 5gb monthly allowance of 4G data. And I do a lot of VOIP calling and pandora. I have yet to witnessed edge speeds in my 6 months on this plan. I’m in Chicago btw

        • David

          With any prepaid service you do not get full access to the entire network and you have lower network priority. Also T-Mobile can change their prepaid prices. While a contract is a binding contract, it also locks in the price. So while going prepaid may seem like a good idea initially, think about what can happen later…

        • Whiskers

          Not sure what full access is with T-mobile as i have been with T-Mobile over 8 yrs , then recently test ran prepaid through T-Mobile and Simple Mobile and seen no difference in calls/data speeds from Ohio to Las Vegas.
          As for T-Mobile changing their prices , well your not on a contract going prepaid so if you don’t like the new changes you can simply leave to another MNVO with no ETF so i’m not concerned there.

        • theboogeyman

          Withprepaid 5gb you don’t get hotspot.

        • Matlock

          you can always root your phone to get around that issue!

        • purenupe1

          the world is filled with free wifi

        • fentonr

          Try using it somewhere that isn’t in a large city. I’m in Wisconsin and about 50% of the state is roaming. Prepaid? No service there. Iowa has large amounts of iwireless service, sure they’re owned partly by T-Mobile but it still counts as roaming so no service for prepaid. There are a few exceptions where prepaid can roam, but not usually. For many customers, its a big deal. If it isn’t to you, buy prepaid.

        • But who the hell goes to Wisconsin or Iowa for anything? Lol j/k. I’m from Chicago and spend my time between here and NYC and Boston and DC so I guess I’m in the minority that only flourish in major cities where prepaid is not a problem. -_-

        • Whiskers

          I have dead spots in Ohio as well and with my contracted lines i get no service , so what’s any different.
          And half the time i do have service , 30 minutes outside any major city it drops to Edge Data .

        • purenupe1

          The regular T-Mo service doesn’t operate well outside major cities either

        • RotaryP7

          M4G & contract has no effect in service or coverage. The differences comes in features it has. There is no truly unlimited data in M4G, PHP is not the same, no caller ID on prepaid, no discount on devices, etc. The customer care for M4G is pretty much horrible too.

        • fentonr

          On prepaid you cannot use any partner services (although their are exceptions, read the M4G brochure and it gives details in the fine print) where as on contract you get T-Mobile’s network plus 200 partner networks. I’m not 100% sure but I believe prepaid also has lower network priority…pretty sure I saw that somewhere.

        • purenupe1

          The customer care on all T-mo is horrible as of late, no one is getting discounts any more, and unlimited 2G in contract equals limited prepaid

        • kevev

          Binding contract my ars! T-Mobile changed my 10GB data to 5GB while under contract. A contract guarantees nothing except that you owe them money for 2 years.

        • fentonr

          If such a thing was done without request of you or someone who is authorized to make changes to your account, some one was fired over it. Further more, you would have been charged for the 5GB then instead of the 10GB as there have not been any 5GB plans that cost the same as the 10GB in the last two years. As you’re now being charged less, just have them switch it back, everything will be back to how it was then. I will say, I’ve a bit of trouble believing that it wasn’t a requested change, I get told all the time that people did not request a change when I specifically remember talking to them personally and them asking for the change in question. Also, if T-Mobile is trying to screw you, why would they move you to a smaller plan?

        • Olivier Boss

          I confirm what kevev (8 hours ago) said: T-Mobile DOES change the terms of a 2-year contract. I am a long-time TMo customer. In 2011 (sometime around spring-summer) one year into my 2-year unlimited (i.e., expensive) plan including unlimited minutes to USA and Canada, they dropped Canada and started charging international rate for calls to Canada (I got charged $13 for a call to Canada on July 4, 2011). I inquired about this change, and T-Mobile admitted they had changed the Canada calls condition (!!)
          One more: on my unlimited minutes and data (original/legacy Android classic plan started with the first Google G1 phone) I had unlimited AND uncapped high-speed data, and 3 months ago (22 months into a 24-months contract) they changed the data deal to a 2GB high-speed and low-speed (2G!) after that. Again, without ASKING ME, without TELLING ME and without reducing my bill!
          So, yes, T-Mobile does change the terms of a 2-year contract at their own will.
          I am sure that this is illegal, and I would absolutely breach the contract with no afterthoughts if the changes really bothered me. After all, I signed a contract with conditions, and if the conditions change the contract is void. As simple as that.

        • archerian

          I’m not sure what the exact terms of contacts are now, but I believe Data and unlimited calling to Canada might be ‘Services’ which are not part of the base contract, so they can be changed without a breach. You have to check the exact contract terms to be sure.

        • formeruser

          I understand that you are trying to protect the company that wants to be known for the most trusted brand. I understand its odd for someone to downgrade without customer request. Unfortunately at tmobile that happens alot. Thats the reason why I cxled my services and went else where. Tired of customer service reps not doing their job correctly. Booo Tmobile.

        • annoyedrep

          yea customer care has alot of problems but damn consumers who expect us to fix fuck-ups that are normal to them are just idiots…check your bill keep on top of your shit, the same as you do a credit card!

        • OnlineRefugee

          People who post that there’s concepts as “grandfathered plans” and that a carrier is bound by a contract to honor the price and plan, those people are mental slobs who should be banned off the Net for leading people astray. There are no such things.

          In fact people, check your plan online. Notice that nowhere does it say anything that T-Mobile is obligated to you to provide the plan price for the term of the contract.

          Also see the provision that says T-Mobile can IMMEDIATELY cancel your contract, at any time, for any reason, or no reason.

        • OnlineRefugee

          I have two Straight Talk prepaid accounts. (Straight Talk is an MVNO carrier, owned by Carlos Slim, the richest man in the world.) They offer services on AT&T and T-Mobile towers.

          I have used both AT&T and T-Mobile branded phones on Straight Talk. True to form, when I have used a T-Mobile phone, I don’t get a good signal where I live. I have to keep the phone in one spot on the desk or sit by a window when talking. With AT&T I can talk anywhere, I get five bars at all times (on T-Mobile I would get zero to one bar indicated).

          Anyway, I am using a Samsung Galaxy S II Skyrocket, SGS II (SGH-i777), HTC Vivid (HTC’s competing product against the SGS II, IMO a better phone than the SGS II). All are 4G phones.

          I constantly run speed tests from those phones. (For a magazine article, when I get a new phone, and idle curiosity). I consistently get 3.8Mbps
          The crux of the matter is what people want. I submit that most people don’t know squat about data performance, that is, between 3.8Mbps and 10Mbps.

          Straight Talk charges $45 monthly (taxes and fees included) for unlimited everything. AT&T does not have unlimited data, but they do have data and talk overage charges, penalties, and ETF charges. One can run up a $150 to $200 bill every few months, and overall pay about $950 more annually than if at Straight Talk.

          I have accessed Netflix, Hulu, and TV streaming sites. All have worked without lag. I have downloaded many apps from Google Play. Downloads have been fast.

          IMO that data performance is fine for most users. I don’t, and I assume all but a small percentage of U.S. users do not, use a stopwatch when downloading files or e-mail attachments. So do AT&T and T-Mobile users on a 24-month contract get faster download times than I do, I dunno, but probably.

          Maybe ignorance is bliss for myself and others.

          In any event, even if I found out that AT&T and T-Mobile users on contract download files twice or three times as fast as I can, I would still NOT opt to pay $950 additional annually per line for that performance difference.

          Besides, I use WiFi about 90% of the time. The other 10% of the time my talk signal has been excellent (because I’m using AT&T’s towers) and data has been satisfactory as well.

          By the way, your statement about a contract locking in the price, that is NOT true. Check out the terms of service for any of the carriers. They all have the same contract term. They have the absolute right to change any term of your contract and can terminate it with NO NOTICE, for any reason or no reason.

          This is called a unilateral contract. Laypeople call it “one sided” or “lopsided” where one party has all the rights and benefits. Long ago the courts have upheld these contracts, saying mostly that if you don’t like it, don’t sign it.

          Interesting tidbit: A few years back Sprint (back in its mean days) exercised its rights under that provision. It determined which customers were high maintenance, needy, or whiners and sent them cancellation letters. The letter is on the Net if you want to see it.

          The blogs are amusing in this way. The carriers don’t do anything to correct people who tell others that their plan enjoys “grandfathered status” (there’s no such term nor anything in concept close to that) and that a 24-month contract locks in the carrier to the price (it does not).

          So while going or staying post-paid may seem like a good idea initially, think about what can happen later… similar to where T-Mobile customers were going to end up if the AT&T acquisition went through.

        • theboogeyman

          Where I’m at prepaid 5gb is $70 bucks.

        • Whiskers

          Noted , you are correct.
          Thank You.

        • GoSmartMobile-Rep _tony

          actually its $70 for 5GB than throttle to 2G speed, which is done on all three plans, dont forget ” Go Smart Mobile” T-Mobile 2nd brand which offers really do offer significant savings. we gonna do just fine in 2013 and so on. why go to walmart when T-Mobile’s 2nd brand “Go Smart Mobile” offers for $45 5gb of high speed data( supposedly 3G speed) but i have tested it and can say its neck in neck with T-Mobile post paid data speed as well as T-Mobile monthly 4g data speed.

        • Whiskers

          True , i was talking about my Simple Mobile experience before the new T-Mobile “Go Smart Mobile” came out that is offered now .

          I will give it a test run soon , my bet is that it will be just fine with the same calls/data but without leash .

    • Tmogenius

      The plan of going “Value only” pertains to the rates that will require a 2 yr contract. T-Mobile will still offer the M4G as a secondary option.

    • The basic rebuttal to your argument is the lack of roaming offered in Monthly4G and the ability to take advantage of lowered pricing on family plans.

    • LocotmoDick

      It’s not the same service. Only using 70 percent of towers, no billing cycle, no bill, no due date, and it’s a pain on warranty exchanges.


      – If *you’re* bringing…
      – No spacing between end of sentence and punctuation.

      You’re welcome!

    • @whiskers

      As someone else already mentioned Prepaid plans do not have access to the full network. T-Mobile doesn’t hide that fact either, they provide two completely different coverage maps for pre-paid and post-paid customers and even state that information in the fine print. Look at a pre-paid and post-paid coverage maps and you will see a big difference in coverage and network access, especially when it comes to access to partner networks and roaming.

    • … :-l they mean “all Value Plan” in terms of the contract side not the no-contract, I know for a fact they will be keeping that around.

  • philly8

    You hear this crap thats on tmo news ppl? I will give you a one liner…..T-Mobile makes it transparent. Here is the price of your plan and here is the price of your phone. Other companies hide the cost of the phone in the monthly service. BOOM


    The risk about Value plan is that all the other carriers will say, ‘you have to buy a phone at a full price for a 2 year contract at T-Mobile’. That can easily scare customers away.
    T Mo should have some plans to make the current warranty and contract terms better in customer’s favor because going Value only in its current system could sink T-Mobile down to toilet within a year or two.

    • David

      Value plans are priced at least 20 dollars lower than Classic Plan counterparts and even more VS the other major carriers. We have people who buy the Nexus from Google Play, and pay 77 dollars for unlimited everything and that is including the price of insurance.

  • xmiro

    In the CEO presentation from the other day T-Mobile CEO said about 80% of their activations are on Value plans and something like 10-14% of new activations are ‘bring your own device’

  • details

    what if you miss a payment is it all due

    • thepanttherlady

      They shut off your service.

      • Bud

        lol, cute.

  • colombiatulua

    if value plans it is with not contract I will go for it.

  • BahamasGeek242

    If T-mobile goes down this path it would be a good time for google to beef up the Nexus phone lineup with two other phones a phablet and a lower end Nexus phone and let us not forget that Amazon will bring a phone out at some point as well.

  • Taron19119

    The value plan is the best thing that happen to the iPhone

    • Whiskers

      Not if you have to sign a 2yr contract even though you bought your iphone outright and brought it to T-mobile.

  • Brian Richards

    If I were King subsidies would be outlawed and regulations put in place to make it either unreasonable or impossible to make devices exclusive to a carrier. I believe this would increase competitive pressure on the phone makers to bring prices down. So long as they can sell a phone at high prices and get carriers to bury the costs in the plan, they have no incentive to come down.

  • SouthernBlackNerd

    Telefonica is trying to help Tmobile in the US market. Tmobile lost more postpaid customers in Q2 2012 than in Q2 2011, which is the quarter before they implemented the Value plans. Tmobile was also in the middle of merging with the death star. I see that as a correlation, and not in the good way. Tmobile has been losing almost 500k+ branded contract customers the past few quarters.

    If they want to catch sprint in subscribers, then they will need to keep as many postpaid subscribers as possible, plus they make twice as much off postpaid customers as prepaid customers.

    I hope I am wrong, but I doubt it. This is not going to be a good move for tmobile to climb past sprint.

  • harry

    ok i dont understand the value plan i switched to verizon from tmobile i pay 230.00 for three lines a nexus and two iphones i have 6 gigs of data for three lines now 230.00 for 24 months of service is 5520.00 and if i had tmobile id pay for say three galaxy 3 phones for 500.00 per phone thats 1,500 from jump street say my service is 190.00 per month for 24 months thats 4560.00 for two years plus the 1,500 i spent on the phones thats 6060.00 hows that cheaper by the way i spent zero for my nexus and 50 each for each iphone 4 thats 100.00 for all three phones can somebody explane how tmobile is so much cheaper then the rest of the companies out there

    • mark

      On T-Mobile for unlimited talk, text, and 4G data for two phones would be $120. If you wanted unlimited talk, text, and web for the 3rd line would be $45 for a total bill of $165. $165 x 24 is $3960 for service. Add $500 per phone in your example is $1500 for a total cost in 2 years to be $5460. If you don’t need unlimited minutes for the third line, you can save another $20 a month for 500 individual minutes for that one line with unlimited talk, text, and web.

      • harry

        ok thank you but if they want to bring back customers like me how much is say a hunderd dollars in two years going to win back people i was with them for 12 years when that money up front for the phones scare people away

        • mark

          It can be scary to pay that much money but you can find good deals on phones for less than $500. A Nexus 4 is $299 and is brand new. Craigslist, Newegg, Amazon, and EBay all sell used and cheaper phones. It is more time consuming but you can still save money. Cheers and good luck no matter your decision.

        • harry


    • xmiro

      My spread sheet shows this result: 3 lines, 2GB data plan, (+6% sales tax, 18.157% Florida cell phone tax, $25 extra line fee for line 3, $1.61 fcc, 0.50 e911 per line) GSIII with $199.99/down on Value and $379.99/$50 for classic plan. Assumptions as to what Verizon Wireless’ E911 and FCC fees being $0.50/$0.26 per line like AT&T which isn’t and also do not take into account $35 Verizon activation fee

      Value: $160.37
      Classic: $184.46
      Verizon: $225

      Total over 24 month period
      Value plan : $5,684.88 / includes $1200 in EIP payments of $20 over $20 months
      Classic plan: $5,635.49
      Verizon: $6,035.93 / 3 GSIII 6GB of shared data

      That’s $351.05 less with a Tmobile value plan over 24 months vs Verizon Wireless

      • harry

        that 160.00 per month does not include your 20 per line for your phone instalments for twenty months and all verizon wavied my actavations fees because i brought over three lines from tmobile

        • xmiro

          it is not, the EIP is added at the end which is $1200, I added a note to my post

        • harry

          ok thanks but that upfront coast when your switching is alot of money when your switching carriers maybe it would be better if it was not 200.00 per phone down acording to your caculations id save aprox 15 per month thanks but im good

        • xmiro

          your upfront cost in this case is 3x$199.99+sales tax, your EIP payments follow in the months thereafter. Of course there are promos for reduced or no down payment from time to time.

          Thing is the whole industry will probably move to this pricing in the next couple of years. Verizon and AT&T were second after T-Mobile to add unlimited plans and myfaves feature before that. My hunch tells me in a couple of years or so device costs will be separated as well. The new mobile share plans simplified things but monthly costs are the same or more as they were before.

          There’s this pesky ARPU thing carriers have to deal with, so their complex math formulas take a while to come about. Of course untangling phone costs from the voice/data plans would make it easier to increase them since the wireless market in the US is saturated and now they have to poach customers from one another in order to keep increasing earnings as Walstreet demands

      • archerian

        The value plan is $160.37 before EIP, so your monthly commitment is $160+$50 (20 X 20 X 3 / 24) = $210 a month averaged across the full 24 months. So in this case the Classic Plan is cheaper than the Value Plan, not only in total 24 month costs, but monthly commitment too. The savings on Classic will be even more as the price for an SGS3 is $279 on T-mobilecom, $179 at Costco and $98 at Walmart, as opposed to $329 in your calculations.

  • mark

    I think that if T-Mobile markets the Value plan right, it will work. They can advertise unlimited talk, text, and 4G data for $89.99 with a new Note II using EIP. If T-Mobile just adds the EIP cost to the plan cost in advertising, it will work. Don’t explain EIP in a commercial but when the customer comes through the door.

    • archerian

      what happens when the customer is asked to pay $200-300 initial down payment? it will be interpreted as classic bait and switch, because with any price shown in ads, the US customers expect a free or $99 phone

      • mark

        In advertising, they can say the Note II is $199 and the plan is $89.99 per month for unlimited talk, text, and 4G data. When the customer comes in to get the Note II, yes the actual cost of the plan is $20 cheaper than what is in advertising but with EIP, the cost goes up $20 for 20 months. I also believe going all Value will probably lower handset costs over time but who knows until that happens.

      • xmiro

        um the note on a regular normal calling plan is $200+ now

        • archerian

          I agree, the N2 is an exception – its not a typical smartphone, nor does it get smartphone like subsidies on Classic

  • harry

    tmobile is no cheaper then any other carrier there becoming a prepaid company (pay full price for phone ) but you have a contract

    • HiyaBuddy

      The whole contract and full price phone don’t make any sense at all unless I wanted to pay off the phone in instalments but for a family of four that might lead to billshock for 20 months.

    • Cruise Guy

      Incorrect once again. Please actually do some research before you comment on this board.

  • HiyaBuddy

    I would refer to myself as someone “spoiled” by subsidies but there’s no way i could justify paying T-Mobile more than I am currently paying Verizon. I have a family plan with 4 phones, more than enough minutes, unlimited texts and 4gb of data per line. My bill is around $310 a month after taxes. If I selected the value plan on tmobile it would be $70 per line and we want insurance on our phones because we’ve been SOL before without insurance. Based on the current php price it would be an extra $32 so thats $312 a month before taxes. I actually don’t go over my data cap and neither does anyone else so yes data may be unlimited but thats not the point. Then if we wanted phones (i.e. galaxy s 3s) it would be $400 up front and $80 more a month for 20 months or around $3000 up front. That would bring the bill up to a whopping $400+ for 20 months. For me, unfortunately, there is no “value” goes to show why a lot of us rely on subsidies to save us money.

    • harry

      feel the same way have three line tmobile comes out more then verizon on my bill also had tmobile for 12 years

    • David

      Sounds like either you are on a grandfathered plan with Verizon (and you won’t be able to upgrade without moving to shared everything or paying outright for the phones) or you are mistaken about the 4GB per line. What you have to do is honestly evaluate your usage and what you actually need. There is never a value when you are paying for stuff that you don’t need.

  • ogopogo

    There is some truth to this article. If you are the leading wireless provider, you can afford to experiment. When you are the number 4 carrier that desperately needs subscribers, then you must tow the line and follow the industry.
    Yes, you do save money in the long run on a T-mobile plan, but basic marketing can tell you that a phone advertised at $199 will sell better than a phone selling at $649.
    T-Mobile is on a slippery slope, and these hair-brained schemes won’t bring in new subscribers.

    • xmiro

      actually it’s opposite, entrenched businesses that are successful cannot afford to experiment and rock the boat because of the possible reprecussions.
      T-Mobile is the underdog and while they need to stop customer losses they can afford to experiment.
      Let’s not forget the iPhone deal Sprint struck nearly put them to death and AT&T and Verizon got so fed up with the iPhone subsidies they told their front line staff to push Androids and Winows Phones.
      Also, T-Mobile is the first to into my faves and unlimited calling which later made its way to Big red and AT&T

      • archerian

        quick note – myFavs was actually copied from Alltel’s MyCircle. According to studies done when UL calling plans were introduced, it was cost effective for only 7% of subscribers. Among the best things T-mobile introduced is UMA/Wi-Fi calling. Launched mid 2007, it was years ahead of its time, and had the principles of IMS which are only now being deployed as part of Voice over LTE by other operators like VzW

  • TMoFan

    Combine the fact that the subsidy model is what’s used here in the states and that American customers don’t look long term for savings and that we’ve all been trained to think that a new phone = $199 T-Mobile definitely has its work cut out for them. My honest opinion is that this will alienate any potential customers where they can just walk over to Sprint, Verizon, or att and pay $199 or less for a phone.

  • Derrick Ford

    Let me help… Did you know that you can (if you can afford to) purchase your phone outright and still have a Value Plan? Hmmmmmmmmmmmmmm

    • Whiskers

      Sure , with a two year leash around your neck.

      • Cruise Guy

        Why is it a leash? This is the 1990s, er, I mean the 2000s. You can’t afford to live without a mobile phone plan these days. They have they cheapest plans (unless you go prepaid to a much smaller footprint) with decent customer service. So since we can’t live without our phones, why is it a leash? Why would you want to switch to a carrier that is twice the price for not much more service, if at all.

        • Whiskers

          It’s a leash if you already bought your phone with no help from the carrier and then they require you to sign a two year contract , that’s BS.
          The only thing T-Mobile has to do at that point is provide great sevice , they are not at any risk of losing money from a phone because you bought it outright , if their service is that good they should’nt be afraid of customers leaving since they already invested their money in buying the smartphone first without their EIP help.
          It’s not a leash if T-Mobile provides you with their EIP services because they are financing the cost of the phone for you.

  • tellie

    its kind of funny that after all these “discussions” with apple the solution is to make the customer pay full price for the iphone? Gee why didnt they think of this a few years ago when people were fleeing in droves.

    • CRT24

      Because apple would still have had to make an iPhone specifically for t mobile. …with the 3g/4g network refarmed to the 1900 frequency then that isnt necessary, and with value plans combined with the ability to pay out the full cost of the phone over 20 months…..subsidies are not necessary either.

    • Cruise Guy

      The radios weren’t compliant. That’s why T-Mobile is refarming their 1700mgz network. APPLE wouldn’t allow T-Mobile to see it because the Iphone only supported dial up speeds and of course voice. So its wasn’t all about price before.

  • ghulamsameer

    If they would market this plan correctly, then I could see this working. Nowadays, the only way T-Mobile is staying relevant is because of the amount of (bad) advertisement. They need to market the savings of a Value Plan for all of this to really take off.

  • dvd3737

    i think it will cost tmobile customers, everyone wants everything for free even it means that they have to pay more monthly to get it lol

  • kristin

    I recently switched to T-Mobile from Verizon. My T-mobile rep told me about this blog to find out info about upcoming T-Mobile news. I was paying 330 bucks monthly w/verizon for 4 lines. I had enough of shelling out that kind of money for cell phone service and decided to look around. I went to a T-mobile store and the rep explained how I could keep our current phones (iphone 4s) and save money. Our bill withT-mobile has consistently been 173 since august for all 4 lines. Value plans are awesome I’m saving nearly 2,000 yearly after making switch and not looking back!!!

    • harry

      how in the hell can a cdma phone work with a gsm carrier dont think so

      • Bud

        the iphone 4s has a sim tray also.

      • Cruise Guy

        Don’t be so nasty harry. It does have a sim tray and comes unlocked due to government regulations with a new frequency that is now on the new Verizon Iphone. Please don’t be so arrogant with your fellow posters. Thanks.

  • I only can say we have to watch and learnf rom these guys. I miss tmobile old plans though. Was alot better

  • Whitney

    Never heard of Telefonica before but I am not sure if they heard that T-mobile is cheapest carrier around. AT&T is expansive and charges you overages fees. Verizon is expansive which also charges overages, and I don’t know what going with Sprint

  • drivethruboy168

    Working at a T-Mobile store, while it is a bit confusing for customer to understand how the Value Plans work, all my post paid activations are Value Plan unless someone is adding a line to an existing Classic Plan or Grandfathered Plan. Even at that, after explaining the Bridge To Value to customers, they switch over little by little. I believe, and this is coming from the front line, that the switch will work. It’s different, but you are paying a lower upfront cost of the phone compared to the subsidized price and the rate plan with the device broken into payments is still the same price as a classic plan or cheaper depending on the device you choose. There will still be sales for Value Plan customers. Value Plans have been in play for quite some time now, so it will be smooth. Pay $199.99 for an iPhone upfront and for 1 line for unlimited talk, text and unlimited 4G for $90 including the phone payments is still cheaper than other carriers for unlimited. I don’t see anything that can beat that!

    • xmiro

      they did say in the CEO presentation you guys had 80% of activations be on Value plans so customers must be liking it

      • archerian

        80% activations are Value Plans, and T-mobile is losing 250k contract customers every quarter, so it doesn’t necessarily mean there is a massive move in the customer base towards Value Plans (I assume there are no Value Plans users whose contract is expiring past few quarters)

        • xmiro

          True that, except classic plans are still around and the main way of selling services to customers. So then what is customer churn about… iphone? coverage?

  • np6s4x

    i don’t see what the problem is? i think as long as the up front cost of the phone is the same (or less) then the sub. price, and the plan + 20 monthly payments is the same (or less) as the classic plan with sub, then, in the end of the 24 months, your saving yourself as much like $80 over classic, and until you get a new phone by the same means, a cheaper plan overall

  • UMA_Fan

    The key is the installment plan. I’m sure when a lot of customers first hear about it’s like they are getting talked into a credit card. They instinctively feel they are being ‘had’ by putting your phone into a payment plan and that T-Mobile is trying to make MORE money off them by charging them full retail on the phone when in reality consumers are SAVING in a 24 month period over taking a subsidy.

    The question becomes how do they get their message across?

    They have to drill into consumers heads that it’s cheaper to pay full retail for your phone. The installment plan should be an afterthought.

    The subsidy battle is a tough one for T-Mobile to fight… it’s like Ralph Nader trying to change the two party political process!

    Ultimately though I’m sad to say T-Mobile loses in complexity. Consumers will more than often chose something worse for them if it’s easier to understand than taking a little effort to understand the slightly more complex thing is better for them.

    Let’s just hope they have something great up their sleeves!

  • Mr Tibs

    Everyone just buy a Nexus its the cheapest route

  • Maximilian

    I think the situation of Telefónica in Spain and T-Mobile in the US are hardly comparable. Telefónica is the Spanish incumbent (think AT&T), and as such usually attracts people with a higher willingness to pay, but also higher expectations in terms of quality, handset selection & subsidies, etc. T-Mobile, on the other hand, is a challenger in the US market and increasingly focused on the value segment. Therefore, I hardly expect that T-Mobile will experience the same problems, simply because they go after a completely different segment in the market. Interestingly, Isacke also fails to mention that what T-Mobile is planning to do is exactly what Telefónica’s very own subsidiary in Germany did: o2 Germany switched to value plans without device subsidies and offered installment plans for those who want a new handset instead. And, what a surprise: their challenger strategy really took off and their subscriber base is growing steadily.

  • od312

    I agree with the danger of taking away subsidies. Customers tend to live in the “right now” as opposed to down the line savings. People would rather go with companies offering the latest phones at cheaper equip prices

    • CRT24

      The up front cost of phones IS less on value. …cant get more “right now” than thay

      • od312


      • od312

        Really? Where can I get a FREE GS3 after rebate on a value plan??

        • The Architect

          I’m with you!!! Good luck trying to convince the masses that when comes to Walmart’s bargains!

        • Cruise Guy

          You can. Look around. I have seen it. They had it the other day. It had a 199 down payment, and the down payment was waived for the weekend. Meaning you paid nothing out the door. There ya go.

        • od312

          Where? I was just talkinh to a store manager and he said there would be no more free phone deals.

  • Hyuri

    I find it funny that people compare individual plans ClassicValue, but when you mention a family plan somehow the comparison becomes Valuehighest-priced-competitor. And in neither case are third-party retailer prices considered. There’s always a way to make Value plans look like the best option – even if it requires moving the goalposts.

    • archerian

      true, there are several people here who just SWEAR all Value Plans are cheaper compared to Classic Plans, and off they go with the highest device cost on Classic and UL everything. That being said, I feel Value Plans are a step in the right direction, since they directly show and shift the cost of whatever device you choose (or not choose) to you. This will be pure Gold for customers when phones reach commodity prices.

  • od312

    Advertising is getting a lil out of hand for my device’s browser.

  • tmobile rep, CA

    Why the hell are we still talking about why the value plan is better and not “stupid.” IT’S CHEAPER. Yes it involves math. Who would have thought the basic skills of adding, multiplying, and comparing numbers to each other would be involved in the process of understanding your own monthly bills. Its not the question why that’s annoying because it builds understanding. It’s the comments from people who “figured out” T-Mobile’s evil plan to save people money when comparing prices against it’s competitors are annoying. I’m sorry that you haven’t retained anything from your 2nd Grade math classes but classic plans are more expensive as are most other carriers.

    • Coming from a “tmobile rep”, typical.

      Sorry, but if you have to explain the mechanicals of the Value Plan and EIP to each and every potential customer – then maybe this plan shouldn’t be implemented in the first place.

      This headache is basically FlexPay allover again, but worst!

      • Cruise Guy

        Actually, it does need to be explained to each and every customer contrary to your thoughts. People are sheep. Yes, Verizon has a bit more coverage and so may AT&T but people don’t understand and are paying heaps more money following the older styles of payments. People are stuck in the old school, and if they don’t want to learn or embrace a new value scheme that saves money for the customer (in most cases) then they can just follow the sheep to ATT and Verizon which pay over $100 per month for a single line. It has to start somewhere.

    • R B

      You obviously did not go beyond 2nd grade math to realize that real world economics are not simply a function of arithmetic. Take a college economics course and then come back without the cloying condescension.

  • sushimane

    i wouldnt think it would be a problem because when ur on a value plan and down a certain amount of money on a phone for example a galaxy note 2 the paper say down 250 on it and 20 dollars a month for 20 month and it would basically add up to the same amount like the classic plan but on the value plan once ur paid off the phone ur rate plan would go down like for me if i choose the 500 minutes unlimited text and unlimited data it would only cost me 60 dollars a month better then what i have now 500 minutes unlimited text and data for 86.86 for 24 month so im basically saving money if i switch to the value plan. but that’s just my opinion everybody think different.

  • rfgenerator

    If T-Mobile wants to do away with subsidies, then they also need to do away with the 2 year contracts (at least for folks who BYOD or who pay upfront for the device), it’s that simple. If they remove the 2 year contract obligation they might have a chance at selling people on this, if they continue to require a 2 year contract for those who have purchased in full their device then this is going to sink fast.

    • Exactly! Value Plan Plus maybe? If not then just keep Classic plans and Monthly4G but allow family plans on Monthly4G like they did with EM+.

      • ebatr8

        You are ignorant about the EM+ plan, the EM+ plan was 79.99 unl talk text and web, this is the price of what classic is today. The value plans are less then the even more plus plans 59.99 talk text and web. If every other company offered the same pricing scheme then I could see your contact point making sense but they don’t do they? If you really want to have no contract then go prepaid, some may argue contract is not fair on value and for a single person their point is a good one yet still, they can go prepaid for no contract. Once you start to go family plan then value becomes better and face it no company is going to start giving you a lower prepaid style rate when they can charge you more example: vzw, sprint, at&t. Since T-Mobile is assured you are going to have service for 2 years then yea why not give the customer this discount they are not taking a discount on a phone so it makes sense just like these cable companies, xbox live, and even gym memberships you sign contracts or pay for an extended time in advance for the assured lower rates. I agree with you as a consumer I don’t like the system myself but, its the way business goes. I think consumers need to smarten up about the purchases they make because even keeping the subsidies are ridiculous you pay so much money yet are stuck with a phone for almost two years because every other carrier wont subsidize your phone until 20 months or later now.

        • VP fanboy much? I was one of the ppl that jumped on the $59.99 EM+ unlimited plan when before that it was $79.99. The Value Plans today are pretty much the same price as EM+ but with a stupid ass contract. It only gets cheaper when you have multiple lines.

    • chuey101

      I don’t think they can do this for revenue recognition purposes. If you have someone on a 2 year contract you can spread their revenues over 2 years, if you don’t you have to factor in added risk to your projections.

      • R B

        How is that a value to the customer? Tmo should then revamp its revenue projection protocols and its business model.

  • Marcelo_L

    So after reading practically all the comments (yes, I took my time), I come down to 2 camps:

    1. Most folks are conditioned to subsidies, don’t necessarily care or are concerned with the “long term” out of pocket cost (regardless of whether they might complain later that their service is costing an arm and a leg), or don’t want/care to do the math of what those out of pocket costs/saving may be.

    2. Those folks who want/care to do the math of the overall long term costs/savings, and may not be concerned with the fact that if their “implicitly loan purchased” device is either failing past the first year warranty are going to be stuck with said device until their contract is up for upgradeability. Or, subject themselves to pay whatever the carrier wishes to charge to either break said contract, and/or the difference for what the loan for the currently faulty device costs, plus whatever cost would be incurred to “implicitly loan purchase” a new phone ( one which said person would hope would not turn out to be as faulty as their previous one).

    It seems to me, from having been with TMobile for 13 years (it was called Omnipoint when I started with them), that most folks (with TMo as well as the other carriers) are less concerned with getting the “long run deal”, as they will probably accustom themselves to keeping to a certain monthly budget, and balancing that. So if their cellphone service cost another 30 more a month than another carriers, maybe they’ll just not go out to dinner once a month instead of twice. I think this accounts more for why folks tend to think about staying with “Classic” plans than moving to “Value” plans. The “Value” in “Value” is a momentary ( as in, right now…because no one really knows what’s going to happen in the future). This is why I think most proponents (including a particular editor-in-chief of a non-official blog of TMobile goings-on) of Value plans don’t “get it”. Most people live in this country by budgeting themselves monthly, they aren’t necessarily thinking 24 months ahead because they’re not in a socio-economic situation where “financial projections” are at the top of their list of priorities to consider when making a purchase decision. The way most people even buy cars is based on “what can I afford a month”, and even if they have to take an exhorbitantly longer loan to afford that nicer car…guess what…they will ! Just because they could “get into it” now. They aren’t going to consider that they’re paying all that extra interest for the life of the loan. That’s not how most people think.

    Furthermore, the whole concept of “Values” is misnomer, it’s not “adding value” for the customer, simply because they are tied to those 24 monthly payments for the rest of the MSRP (or whatever price they FEEL like charging you…c’mon…most phones..even this Galaxy Note II in my pocket shouldn’t cost $700 retail..give me a break). IF within that monthly payment plan it included the device insurance cost (with a LOW deductible…$130 to replace a faulty Amaze 4G I bought 13 months ago that we’ve had to have the battery replaced twice? Please..try to sell that to someone else…the phone was a dud….just swap it.)

    The “Value” plan only works when “all goes as planned” with your life….the phone survives the toils of daily labor. When was that last time THAT happened ?

    • R B

      I agree with your assessment. Many customers see this instinctively for what it is: a cleverly designed/disguised marketing device/gimmick.

      1. Why would ETFs be needed in “value” plans if the reason behind ETFs in the first place was because carriers wanted to protect themselves from customers who took their subsidized equipment and ran, and the reasoning is that the value plan separates the cost of the device from the cost service? So then, if due to no fault of my own I must break contract, then I owe the ETF and the remaining balance for the device. Seems like a win-win for TMo and a lose-lose for the customer. How is that value?

      2. Does the ETF requirement cease if I pay off the phone in one year instead of two? Of course not! So Tmo gets the benefit of not subsidizing and keeps the customer on the hook for another year for no good reason, no pprotection, and no benefit that justifies an ETF. How is that value?

      3. Customers know that they cannot trust big business to act in their interests. The opposite is true big business exists to serve its shareholders. Thus, to expect a customer to hang on to and pay fully for a rapidly becoming obsolete, fragile device for two years, one of which the device is out of warranty, and to trust that Tmo would make decisions that favor the customer is ridiculous. Two years is too long to see the benefits, especially with the confiscatory ETF. With subsidized plans, at least there is the appearance of sharing the amortized risk.

      My conclusion/prediction: value plans will become attractive at first but will quickly become a customer service nightmare that will further sully Tmo’s name, if that’s possible.

      • philyew

        ETFs exist for Classic Plan customers with or without subsidized devices and they were $200/month way before the average subsidy on a smartphone ballooned to around $300.

        In fact, TM’s ETF has been $200 since at least 2004 and didn’t decrement over time until 2008.

        The point being that the ETF exists for more reasons than simply recovering the subsidy from an early terminated contract.

    • fentonr

      So, 1) value is almost always cheaper, so that does seem like a value to me. 2) How is the customer in any worse shape with value over classic if their phone breaks? 3) Why would T-Mobile exchange a product that isn’t theirs (no, the Amaze is not T-Mobile’s product regardless how much people like to argue that, its HTC’s) after the warranty is up? You had the chance to purchase the extended warranty which is not $130, its $5 to do a replacement. The $130 is if you break it. 4) phones generally have < 5% markup, sorry, that Note 2 does really cost that much, go look for unlocked ones, same price. Verizon is selling it for the same unlocked I believe, or was anyway.
      I think that from the comments you're right about the two camps. Most of the people hell bent on keeping old stuff live on the internet (bit odd, isn't it?) in stores, we currently sell something like 85-90% value as it is, it won't be much of a change to go to all value. We can properly explain it to customers and they understand the value.

  • WW

    I don’t think it was mentioned before (with so many comments on multiple stories over the few weeks since the announcement, I may have missed it) but every “authorized dealer” I’ve ever visited only sells Classic Plan (I’m thinking they don’t sell Value Plan because there’s no margin in it for them).

    Will there still be room/profit for non-corporate TMo stores when they go Value Plan only?

  • Chatter

    I’m not sure why people are surprised. It is logical that a Value-only plan system will lose customers. The actual question is if TMo can/will reverse the trend after the initial dip in sales. TMo feels that the Value plan is the “smarter” option and will make the company successful in the long run. They are betting on changing the system. They need the gamble.

    • R B

      I think you are right. But this seems to be a desperate gamble with a disingenuous disguise.

  • Ducter

    I don’t see how this works out for the good for people like me on a family plan. I currently have five lines and my contact ends in February. When I look at paying over 3k for new phones and with my current plan of 1800 minutes, myfavs, Android preferred Internet, unlimited texting on all 5 with a monthly bill of 230ish that means in order for this value plan only deal needs to cost me what? Under 84 bucks a month in order to pay the same I am now… Anyone want to wager that won’t happen?

    Currently to get new phones
    monthly bill 230*24=5520
    means total cost of new phones and 2 year contract is 6520

    new value only phones
    monthly bill said to be 20 bucks cheaper
    year contract is 8040
    am I missing something? Or does another carrier look that much better?

    • fentonr

      Can vary a little, but in general, if looking at smartphones for all lines, you should be at $20 cheaper per line. If you have an old rate plan, you might not end up cheaper, but in 99 out of 100 cases you will.

      • rfgenerator

        …and here is the key, if you are a long term customer on a non standard rate plan (i.e. Android Preferred $20/5G) then it’s a pretty good chance the may would not work out to go to Value.

        • ducter

          But from my understanding its not optional?

        • philyew

          You won’t be forced over unless you want to get a device with an installment plan, or you want to change your plan, which would have happened anyway.

        • Ducter

          Yeah, that’s the thing I was planning on upgrading to a couple galaxy note 2s and several galaxy 3s. Wire fly has pretty decent prices but seems like I won’t have that option come February. Family currently has several sensations a g2x and a defy. To buy them right out is to costly for me so guessing will have to have a long look at what other carriers are offering.

    • The Value Plans don’t directly correlate to $20 cheaper than grandfathered plans that T-Mobile doesn’t offer anymore. It’s $20 cheaper than the current Classic Plans they offer. You would probably need to list every individual feature and its cost plus what types of phones you are using on every line and I’m pretty sure there’s a way that the Value plan still comes out cheaper. Remember that on the Value Plan each line after the first 2 only costs $5 per month to add. Then add $10 or $20 depending on what data plan you want. If they are dumbphones you don’t even need data so it’s even cheaper.

      • philyew

        As the number of lines on the Family Plan increase, the differential between the Classic and Value Plan pricing increases. You can build Classic and Value Plan scenarios in the TM website and see the relative costs.

        I did this the other day and could see that the VP remained cheaper even with four lines and four new smartphones.

        Of course, if you are dealing with a grandfathered plan then it’s unlikely that there would be savings.

        • ducter

          Just went to tmobile’s website and when I go under value plans select device as phone, select quantity (5), then select phone I have no option to select the phones I want, stuck with the default choice for a samsung flippie.. cant even see for my self exact amounts. I could call them I understand but thats getting ridiculous dealing with their “improved” customer service reps.

        • philyew

          I have to admit that I’m unable to associate Value Plans and devices today as well. I’m sure it was working a couple of days ago but now it’s behaving like multi line Value Plans and smartphones are mutually exclusive.

    • philyew

      We are pretty much on the same plan, I just have one fewer device and a couple of $10 data plans along with 2 of the preferred 5GB ones. I’m sure you are right, while the VP would be cheaper than the regular CP, it is still way more expensive than we are paying at the moment.

  • rafe1621

    Can anyone tell me why the subsidy model is bad? This is a serious question. Most people I know have been with the same carrier for forever and have no interest in changing plans or going to a different carrier. Aren’t subsidies beneficial to these people?

    • philyew

      The comparable total cost of ownership between a subsidized phone and its associated Classic Plan is almost always greater than for an unsubsidized phone with a Value Plan.

      e.g. $200 for the phone and $2160 for the subsidized plan (Total $2360) on the one hand, compared with $600 for the phone and $1680 for the unsubsidized plan (Total $2280).

      You can also get an Equipment Installment Plan for the unsubsidized device and pay a down payment which is often no more the the subsidized price.

    • Because subsidies are supposed to justify higher rate plans that other carriers charge. The higher rate plans are supposed to make up for the cost of the phone. So you are in essence paying a higher bill over the course of your contract in order to pay the carrier back for the phone they gave you at a subsidized price. Problem is when you have your own phone or have not used your upgrade or even after you have completed your contract, the rate plans remain high. You’re paying a higher bill even if you don’t have or have already paid back the carrier for your device over the course of the contract.

      Then of course benefit to T-Mobile from a business perspective should be obvious.

  • R B

    Let’s be honest: Tmo’s bread and butter consists largely of people who do not have the resources to plan beyond the month to month. These are people who live quite literally from paycheck to paycheck. Don’t believe me? Just visit your local mall and compare the Verizon and ATT clientele with those that frequent Tmo. You’ll be startled by the contrast. This plan has no real relevance for them and no significant long-term benefit other than for Tmo, who gets to fleece them for both the ETF and the balance of the device.

    But there are no significant benefits for those at the other end of the spectrum who can buy devices outright or very quickly. They are still stuck with a two-year noose. Surely, this is not Tmo’s usual customer, but with BYOD and iphones this is the clientele they are trying to attract.

    Such failure to provide real competitive benefits for the bread and butter and the potentially lucrative clientele spells doom for this approach.

    • Well of course. If people have enough money to where paying huge phone bills every month doesn’t affect/bother them, why would they ever go to T-Mobile? T-Mobile is a value carrier so this is nothing new or a shock to anyone.

    • philyew

      You seem to be forgetting that there is at least a $480 saving on almost every Value Plan configuration compared with its Classic Plan equivalent over the contract period.

      • archerian

        $480 saving on an individual plan? Are you sure you are not adding a possible EIP? that scenario can only happen if Classic Plan customers buy the device at full price, which they never do. The typical monthly difference between a Classic and corresponding value plan is around $20, so all subsidies aside, that’s $480. Now Value Plan customers pay for the phone, so if Value Plans were to be cheaper by that $480, that would mean Classic plans customer would also have to pay full price for their devices too AND then the subsidy add-on. Do your math again, you will see that there are several Classic Plans that are cheaper than corresponding Value plan over the 24 month period, when a phone subsidy is involved and the device is bought at the best price. This might not be true for all Classic Plans and devices (the Note 2 for example) but there are definitely cheaper Classic combinations out there.

        • philyew

          I’ve already quoted an example showing that the phone plus plan difference over two years is around $80 so I already get what you are saying, but I was talking about the difference in the plan prices which RB seemed to be missing from his critique.

  • The majority of T-Mobile’s customers are already switching to and embracing the Value Plans. I can’t remember the last time I activated someone on a Classic Plan. The Value Plans are cheaper over the course of the 2 year contract plain and simple.

    Bottom line it’s really no different from what the other carriers are doing except that T-Mobile is upfront and actually separates the cost of the device from your rate plan price and once you have paid T-Mobile for the device through EIP, your monthly bill drops. With other carriers you still pay the same high bill forever regardless of whether you have fulfilled your contract and paid the carrier back for the “subsidy”.

    When they get the iPhone it will probably be $99 for the 4S, $199 for the 5 upfront just like the other carriers. No one will be forced to pay $700 upfront for a device. Even with EIP your bill is still cheaper than the AT&T and Verizon share rape plans. Plus you have the option of actual unlimited data.

    For those complaining “why should I have to do a 2 year contract if I bring my own device?”, that’s why they have no contract Monthly 4G prepaid so that you can leave whenever you want.

    • rfgenerator

      Sounds to me like salesmen talk. You may be right about new customers who are paying full freight getting a (slightly) better deal with the Value Plans. However customers like myself who like me who have been with the customer for years and have a 2 line smartphone either the value plans or the monthly pre-paid 4G would be paying more for less. Specifically I have 2 line family classic 1000 minute plan. Line 1 is an Android Smartphone with the Preferred Android $20 for 5GB plan, the second line is a Blackberry with the $200MB plan. With the corporate discount, and all the fees and taxes my total cost per month is $91. Show me how this saves me money (especially since I will be paying full price for the phones if I were to take the bait or switch). I was already on the fence about staying with T-Mobile, although T-Mobile’s data network has improved over the last couple years, I would say a solid 40% of the data network around me is either EDGE or worse GPRS. This elimination of subsidies while maintaining a contract or forcing me off to a much smaller data cap on monthly prepaid 4G just doesn’t cut it.

    • archerian

      You claim Value Plans are cheaper than Classic, yet when you do the math later in your post, you compare it against other operators plans, of course then its cheaper as T-mobile is a value provider. A possible reason why you don’t remember a Classic Plan activation is because most of them happen in 3rd party retailers with the prices T-mobile has in-store for them.

      If your argument for why there is a contract when the customer does a BYOD is if you don’t want a contract go prepaid, you’re actually skipping a valid question – why the protection against a risk that T-mobile does not assume? If more people move to prepaid where the ARPU is much lower, it’s less revenue for T-mobile.

    • Whiskers

      But according to all you expert T-Mobile reps , you don’t get 100% service and tower reception on a prepaid plan…….
      So why do that with Monthly 4G and get substandard sevice.

      • Whiskers

        And if you did , don’t you think everyone would jump on that ship instead of the VP with a 2year leash.

  • GwapoAko

    I believe those customers who are complaining about the Value Plan are those under grandfathered plans who are really paying low rates. Tmobile should just leave them alone if they do not want to migrate with the Value Plan. For new customers they should just put them on Value Plan and discuss the advantage of getting it against subsidized plans from the At&t , Vz and Sprint.

    • philyew

      I’m one of those people who won’t save moving to a Value Plan because of my grandfathered plan. The only real concern I have is that I will have to do a full cash outlay on four new devices, since there won’t be an option to get a subsidy or use an installment plan. That could be an outlay of over $3,000 inc. taxes, if I choose the renew all four simultaneously with comparable new devices next time around.

      • archerian

        how much do you save over the best corresponding value plan? are you on t-zones or web2go data? I’m on a grandfathered plan too, Value combinations seem to offer grandfathered rates for voice, its the data that makes me hesitant to make the change

        • philyew

          We’re on a 1800 minute MyFaves Family Plan. We use Google Voice lines as MyFaves numbers, a combination which effectively gives us unlimited voice and 2c/min international calling. I also have 2 x Preferred 5GB data plans for $20 each and 2 x 200Mb.

          This plan allows us to get subsidized phones which saved us $1700 on the devices.

          Looking at the VP pricing, it would cost us $30/month more than we are paying at the moment, meaning that over 24 months, including the cost of the phones, it would cost us $2420 more to be on the Value Plan.

  • Herb

    The hard truth is that the Value plan only saves money for accounts with one or two lines. Families with 5 lines looking to upgrade all at once would see their bill increase up to $100 as a result. Unlimited Value family plans (only unlimited on the first 2 lines) with 500 minutes and unlimited data on the 3rd, 4th, and 5th lines would cost $295 /mo. That’s a $15 increase over the same services on the current Classic plans. That’s $360 more over the course of the contract, or one full-price unlocked Nexus 4. I don’t understand how anyone can effectively sell this as a better product than what came before.

    • philyew

      I ran the comparison online a couple of days ago using the order builder and could still see savings in a four line value plan even buying four new Galaxy S3 devices.

      • archerian

        T-mobile (and their cronies everywhere) is pushing people to Value Plans, so of course on their site their prices will be such that Value Plans will be more attractive. The best deals for Classic Plans are from 3rd party retailers. The maximum cost of acquisition per line and per device is predetermined by T-mobile, its just presented differently in different retail locations and plans, if a customer gets suckered in at a place where the price is higher, then its just more money in the pockets of T-mobile and the retailer.

        • philyew

          Third party retailer deals will sometimes result in additional contract commitments and associated ETFs.

    • $120 for unlimited everything on the first 2
      $45 for the other 3 on 500 mins 2GB ($15 per line with 500 mins 2GB)
      $100 per month for 20 months (assuming all 5 get Galaxy S3 or some other top of the line phone.

      That comes out to $265 for 20 months, $165 for 4 months when the phones are paid off over the course of the contract. $5960 total

      Comparable Classic Plan
      $160 for unlimited everything on the first two
      $105 for the other three lines on 500 mins 2GB ($35 per line)

      $265 for 24 months. $6,360 total

      Then not to mention T-Mobile charges way more upfront for phones on Classic Plans compared to Value Plans. I believe the Galaxy S3 is $320 upfront on Classic on only $150 upfront on Value. So assuming you want 5 GS3s you would have to bring $1600 in store to get your whole family phones on Classic or bring in $750 on Value.

      • For classic plans, most ppl are smart enough to go to 3rd party vendors and get a phone like at Best Buy or Walmart where it would be cheaper.

        • archerian

          correct, the OP didn’t add the device costs to the plans, costs will actually be very similar on Classic if bought from 3rd party retailers. As an example based on numbers from the OP, getting the SGS3 from Walmart brings the effective price of the device to $98 from $320, making the Classic Plan total cost equal to Value. If any of the lines were not using unlimited talk/text, the savings would actually be on the Classic Plan side.

  • brianaz24

    I left because of the forced value plan…. not only do you pay for 100% of the device (no subsidy) you also have to pay a “migration fee” and in addition if you are 1/2 into your contract you will still end up with an ETF… at that rate I’ve pushed all my friends off to Sprint or AT&T…. so long T-Mobile it was a great 8 years…

    • od312

      I don’t know of any “forced” value plan as of yet. Elaborate. I still have my classic plan

      • brianaz24

        Wait for 2013… you’ll be forced to migrate…

    • xmiro

      Bull. No such thing as forced value plan. I’m on Classic and eligible to upgrade, got mailers last week to upgrade our phones and could keep our classic plan if I wanted ot

  • angelo

    my friend was paying 100 a month for 2 tmobile lines he switched to verizon and now pays 150 for 2 lines so his girlfriend could get an iphone and he was happy when he go droid razr m for 80 dollars and it doesnt bother him. i tried t show him how much more money he could have saved with tmobile but people see free iphone or buy one get two phones and they think they are getting the deal when in fact they are getting screwed.

    moral of the story nobody will pay $700 for an iphone on tmobile when verizon offer it for 100

    • od312

      Exactly my point!!

  • OnlineRefugee

    Consumers are loving life. The battles in the wireless war have moved to the prepaid field and the Generals (Carlos Slim, Masayoshi Son, Rene Obermann, Stephenson, et al.) are making strategic moves, especially in wireless broadband, e.g. Clearwire, the next “gold rush.”)

    We all get to wet our beaks as these wireless titans get into pissing matches.

    • philyew

      Wetting our beaks in a pissing match? Sorry but I’ll pass on that one… ;-)

  • Goodbytmo

    Sorry jack but all prepaid in 2013 one of my lines will be out in april and onto walmart for a cheeper price and the other will follow. tmobile please pull your head out of your a$$ before you piss away the rest of your customers! Someone tell me what does tmobile have to offer ? there not the cheepest they dont have the best coverage there not the fastest there customer service isnt great by anymeans and last but not least there phone line up isnt the best ether and now im suppost to sign a two year deal for prepaid. Sorry jack ship up or Ill ship out!

  • tmo boss

    With the prepaid you only use 75 percent of the towers

    • Whiskers

      Prove it.

  • JV

    Something I think no one has mentioned… If we have to go the unsubsidized route then I think that the phones shouldn’t be branded to a specific carrier, they should be stock and as such come with no bloatware.. and why would I buy a dual core Samsung SIII when I could get a quad core unlocked international SIII for about the same price.

    • Cruise Guy

      Good question. Here is the answer. First, you can buy a phone from anywhere, pending it has the same radios and frequencies and use it on T-Mobile. They have no problem with that. But there are benefits to having it branded. First, it is fully configured, meaning if you take a phone from Europe, you often have to change the APN settings and the MMS settings to make it work just right. Secondly. all of the T-Mobile Smart phones have the voice over IP allowing you to use your phone all over the world for free via wifi, or in your basement where cell phone coverage doesn’t work. The stock versions of phones don’t have this neat technology, so T-Mobile has to ad it in. And in terms of unsubsidized, the new Google phone they sell is a stock version.(no neat built in voip) When you pop a sim card into another carriers unlocked phone, it will generally work but often settings have to be changed. Also when you buy the T-Mobile variant, their customer support will help you to troubleshoot the phone.

      • Whiskers

        Why would any idiot buy a phone full price from somewhere else and then sign a 2 year contract on a VP plan , absolutely bad move.
        If your going to sign a 2 year leash agreement on a VP contract , you might as well let T-Mobile finance it for 0% interest for 20 months.

  • super 4G speed

    the problem you wouls be facing there is prepaid does not get the same service as contract plans they only get 75 percent of the towers and there is no roming there are 4 states in the U.S. that tmobile doesnt cover you can still get coverage threw roaming prepaid isnt what it is cut out to be

  • tmobile321

    Did you know with prepaid you only get to use 80% of the towers and you cannot roam. Tmobile has a agreement with ATT for roaming there is a big difference in coverage most people dont know tmobile doenst cover 5 states in america only with roaming.

    • Whiskers

      If Roaming is such a big deal where you live then simply go to another carrier’s prepaid plan that does.
      AT&T and Verizon has alot more prepaid towers than T-Mobile will ever hope for.
      One has to make a decision at that point and value would not be at the top of the list if that is the main problem.

  • Glad I just updated with a great subsidy ($1 for S3 on Black Friday), before they start this bullshit. I never have paid full price for a phone and don’t plan to. I think it’s a risk as well. I only would be willing to pay $350 at the most, and that’s pushing it. Probably from Google. These $500-$600 unsubsidized prices are ridiculous, and way overpriced. These smartphones are cheap to make now, especially when they are made in some sweat shop overseas

    • Cruise Guy

      Wicked. Why don’t you try this. Pay the $200 “migration fee and $35 switch fee” to move to a Value plan. Your bill will drop almost $20 per month or more per line. $20 per month x 24 months = $500. Ok, now follow me. 24 months from now, you will have a net savings of about $265. You did get a great deal on Black Friday, and if you can upgrade on Black Friday two years from now, it could still be worth it. But considering every two years you will save about $500 over any classic plan, you can take that money and buy any phone to your hearts content. You are right though, if you wait just till the Black Friday sale, you could make out better, but you are stuck waiting to upgrade on that one day and to only what they have on special.

  • joel

    telefonica is movistar in Mexico. ^.^

  • Aston

    Wow. I rarely come onto tmonews, and I just found out about no more subsidized plans. Well then, I’ll be going to other carriers after my contract ends…assuming they don’t back peddle, which I fully expect them to do.

    • Cruise Guy

      Why would you do that? So you want to pay more at other carriers? Remember that an ATT subsidized phone + 24 months of payments is WAY WAY WAY more than a T-Mobile identical phone paid for in cash or payment plan + 24 months of payments. Go check out the pricing. You will be surprised when you do the math.

      • Aston

        Thank you cruise guy for you insightful response.

        I have done the math, and I am one of the few exceptions where the classic plan comes out cheaper than the value plan.

        It worked out that way because I bought my phones during a special tmo promotion where I got my phones for free. Yes the value plan does give you a slight discount in terms of monthly rates, but it wasn’t enough to offset the hefty price of the handset.

        Don’t always believe others when they tell you that something is always cheaper.

        Lol…you probably will not read this post. Oh well.

        I will be looking for a new carrier if tmo decides to drop classic plans. There are cheaper options out there. I will just have to look. Tmo service is already awful. The only saving grace was that it is (relatively) cheap. You take that competitive advantage by making customers paying $500-700 for a phone, and I’ll be running for the hills. And, I need multiple phones, so I would not be willing to pay thousands to upgrade all while be locked onto a 2 year contract. No thank you.

  • Of.course they will experience some loss in the beginning, but if people are not intelligent enough to save money why dumb down yourself? If CEO’S of these companies are getting millions a year in sure the companies are turning a profit..stop being so greedy….damn…hell why clog up your network?…let them leave

  • “T-Mobile has their work cut out if they not only wish to avoid the
    pitfalls that Telefonica and Vodafone, but also to convince customers
    that paying $650+ dollars for an iPhone going for $199 elsewhere works
    out in their favor over the long run”…I get SOOOO sick of explaining this.

    PRICE BREAKDOWN AND SET ALL CARRIERS EVEN AT $69.99 FOR SERVICE(Which is how much TRULY unlimited is on the T-Mobile Value Plan):

    – T-Mobile (THIS IS JUST AN EXAMPLE T-MOBILE DOES NOT HAVE THE IPHONE YET) $199.99 DOWN and 20 a month added to your
    69.99 a month MAKING IT $89.99 FOR 20 MONTHS ONLY

    – Sprint: $199.99 DOWN and $40 per month for the
    rest of your life added to your bill

    – ATT: $199.99 DOWN and $70 per month for the rest
    of your life added to your bill

    – Verizon: $199.99 DOWN and $50.01 per month for the
    rest of your life added to your bill.

    If they are looking at upfront cost It allows customers to come the same or in most cases LESS OUT OF POCKET THE DAY THEY GET THEIR PHONE AND LESS ON THE MONTHLY BILL.

    Seriously, this American addiction to price subsidies is sickening and the more expensive the devices become THE LESS carriers will be able to subsidies.

  • John

    I think T-Mobile is doing the right thing. The value plan puts them in line (pricing wise) with lower tier phone services and they have better quality services. Even on a value plan they allow you to buy a phone. Although not subsidized they offer rebates and let you pay for a phone over a 20 month period. Personally I prefer to go to Craigslist or EBay and pay cash for the phone, but it’s an option for people that don’t have a couple of hundred bucks to spend on a phone.

    When I was younger and broker I would go for the company that had the best price and cheapest phone that I liked. Now that I’m more experienced I go for the price for the long haul and T-Mobiles service around me is excellent.