March 25, 2013 at 5:33 PM
FAQ: T-Mobile’s new no-contract plans, iPhone – are they cheaper?
If you’re a current or prospective T-Mobile customer, get ready for some big changes.
The new pricing is part of a new “Uncarrier” strategy that T-Mobile has been developing to reinvigorate its brand and better compete against larger carriers. The strategy, including simplified plans and an emphasis on smartphones, coincides with the launch of the company’s 4G LTE network.
The company is expected to roll it all out and announce LTE availability at a press event Tuesday morning in New York.
T-Mobile is the last of the four major carriers to roll out fast, robust LTE technology. That’s partly why it’s acquiring Dallas-based MetroPCS, which already has LTE coverage.
LTE is nice but customers may have more questions about the new rate plans that T-Mobile’s offering.
Most affected are customers who want to use basic “feature” phones and don’t want to buy a smartphone just yet.
Although roughly half of U.S. wireless customers will use basic phones, T-Mobile has stopped offering them through its website. As of Sunday, it has basically stopped selling voice-only phone plans in most of the country.
The company’s cheapest plan for new customers now costs $50. For that price, it offers unlimited calls, text messages and 500 megabytes of data per month. That’s not a bad deal for a smartphone, but it’s too much to pay if you’re using a voice-only phone.
For customers wanting voice-only phones, T-Mobile is now suggesting “pre-paid” phones that you load up periodically with minutes.
More details of company’s new approach are expected Tuesday morning.
Meanwhile here are some questions and answers to the new approach. T-Mobile also has posted its own FAQ here. I’ll update this version as more details emerge.
I heard T-Mobile is doing away with contracts, is that right?
Sort of. The company is shifting to “no contract” plans that you pay for month to month. However, it will still sell new phones on a payment plan that will last several years. Existing contracts will continue.
Hasn’t T-Mobile been offering “no contract” plans for a while?
Yes, it has. The new versions look pretty much the same as the “no contract” options that T-Mobile has been offering, but with a few minor tweaks. For instance, at the $60 tier, you get unlimited talk, text and an additional 2 gigabytes per month of data.
Is it really unlimited data at those prices?
Not exactly. You’re limited to a certain amount of data transfers at normal, 4G network speeds. Once you’ve hit that limit, T-Mobile throttles your data speeds down, to achingly slow 2G speeds.
Are the new plans cheaper?
Not necessarily. T-Mobile’s previous “no contract” plans had the same starting price — $50 for unlimited talk, texts and 500 megabytes per month of high-speed data access. The deals get better if you’re subscribing to multiple smartphone lines. The three-line plan, for instance, offers unlimited talk, text and 2 gigs of data for $40 per line. If you’re looking for a basic, feature phone plan without data access, the new plans are more expensive.
Can’t you get “no contract” plans at other carriers?
Other carriers offer what are known as “prepaid” plans that you pay for month to month. They are more expensive and charge overage fees if you exceed your monthly data allotment. Also, Verizon only offers a 3G prepaid plan, so you need a contract to use its faster 4G LTE network.
AT&T’s basic, prepaid smartphone plan costs $65 per month for unlimited talk, text and 1 gigabyte of data. Verizon charges $60 per month for a smartphone plan with unlimited talk and text and 500 megabytes of 3G data access per month.
Is tethering unlimited?
No, it’s included in the plans with monthly data limits. If you buy the unlimited data plan, or the 500 meg data plan, tethering usage is limited to 500 megs per month. Once that limit is reached, speeds will be reduced.
How do the new plans compare with traditional contract plans?
The new, no-contract plans are cheaper if you’re a smartphone user needing data access. They also give you more flexibility to change the plan or leave T-Mobile any given month. T-Mobile’s “classic” contract plans started at $60 per month for unlimited talk, text and 500 megs of data — so they cost $10 per month more than the new, no-contract option.
What if I want a plain old phone — not a smartphone — and don’t need a data plan?
T-Mobile has done away with lower-cost plans for older “feature” phones. Your options are to pay $50 per month for one of the new plans, which is overkill and too expensive for that sort of phone, or go with a prepaid phone that you periodically “reload” with minutes.
T-Mobile said voice-only service is available through ”pay as you go” or “by the day” plans. It’s also offering less expensive plans through its new budget brand, GoSmart Mobile.
What about T-Mobile’s “Value” plans?
As of Monday they’re no longer available through T-Mobile’s website, though the site says you can ask about a “custom” value plan in T-Mobile stores. It’s a different story for business customers, though – T-Mobile will continue to offer them “value” and “classic” plans.
Are “classic” plans still available from T-Mobile?
Existing “classic” customers can keep their plans, but they’re no longer available to new subscribers through T-Mobile stores. You will be able to get classic plans from T-Mobile dealers, such as mall kiosks, and national retail stores.
Why do some new phones seem to cost more at T-Mobile than other carriers?
T-Mobile is no longer subsidizing the cost of new phones. This means the cost of the phone is no longer hidden in your monthly phone bill. It also means that you may pay more upfront at T-Mobile; you can pay for the phone when you start service or set up a payment plan for the device.
I need a new phone. Should I still get it from T-Mobile?
You’ll need to do a little research to figure out if that’s your best option. It’s convenient to get your phone and wireless contract at the same place, and pay with a single bill. T-Mobile will sell you a new phone at its full retail price, set up a financing plan for your phone or let you bring an “unlocked” phone that you bought elsewhere.
You’ll have to figure out whether the T-Mobile service plan plus the monthly device payment are more or less than what you’ll pay for the same package elsewhere. It pays to shop around. If you’re interested in the Google Nexus 4, you can buy one that runs on T-Mobile’s network directly from Google for $299 (with 8 gigabytes of storage, or $349 for a 16 gig model) or buy it from T-Mobile for $457.99 (for the 16 gig model only). A Samsung Galaxy S III, on the other hand, is $549.99 at T-Mobile or $649.99 at Staples.
What about the T-Mobile iPhone?
On April 12 T-Mobile will begin selling the iPhone 5. The phone will cost $99.99 upfront, plus monthly payments. The payments are $20 per month for two years, so you’ll end up paying $580 for the device. This is less than the $649 that Apple now charges for an unlocked, 16 gigabyte iPhone 5.
What if I use more data than I’m paying for?
If you exceed your monthly allotment, T-Mobile will throttle the data speed of your phone but won’t charge you more.
I’ve been a T-Mobile customer for years, do I get a special offer on the new service plans?
No. The company said on its support page that it’s looking into loyalty reward programs.
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