T-Mobile Practically Giving Away Phones – Price Comparison with AT&T

Things are rapidly changing in the world of cellular telephones. T-Mobile has really started to shake things up lately – most recently by eliminating contracts.

Read our article about T-Mobile dropping contracts.

So I could walk into AT&T right now and buy a new phone for $200. I’d also be signing up for 2 years of service to get that price. Say I just want 450 minutes, unlimited texting, and 3GB of data… that’s $90/month.

	Phone		Service		Total
	Upfront	Monthly	Monthly	Details	Upfront	Monthly	2 Years
AT&T	$200.00	–	$90.00	450 Min, Unlimited SMS, 3GB Data	$200.00	$90.00	$2,360.00

Then I take my new phone over to T-Mobile and ask them to beat that price.

“Duh. You can get that same phone for $150 upfront and pay it off in 2 years at $20/month.”

But what about service? Can’t use a phone without a way to connect!

“You can take the SIM card out of your AT&T phone and just use that, or get service from us for $70/month.”

Wow, that’s cheaper than what I pay AT&T… but what do I get for $70?

“Unlimited everything! You get minutes, texting, and data… all unlimited.”

	Phone		Service		Total
	Upfront	Monthly	Monthly	Details	Upfront	Monthly	2 Years
AT&T	$200.00	–	$90.00	450 Min, Unlimited SMS, 3GB Data	$200.00	$90.00	$2,360.00
T-Mobile	$150.00	$20.00	$70.00	Unlimited Min, Unlimited SMS, Unlimited Data	$150.00	$90.00	$2,310.00

For the same monthly price, I get more for my dollar, and I saved myself $50 upfront on the cost of the phone by choosing T-Mobile over AT&T.

“Oh wait, we just opened up this new promotion that I forgot to tell you about. We can give you that same phone for zero upfront today if you just pay $5 more a month.”

They’re obviously trying to get more money from me. Whenever the carrier tells you it’s a good deal, they’re lying through their teeth, right?

T-Mobile	Upfront	Monthly	Total Cost
Option #1	$150.00	$20.00	$630.00
Option #2	$0.00	$25.00	$600.00

 

	Phone		Service		Total
	Upfront	Monthly	Monthly	Details	Upfront	Monthly	2 Years
AT&T	$200.00	–	$90.00	450 Min, Unlimited SMS, 3GB Data	$200.00	$90.00	$2,360.00
T-Mobile	$150.00	$20.00	$70.00	Unlimited Min, Unlimited SMS, Unlimited Data	$150.00	$90.00	$2,310.00
T-Mobile	$0.00	$25.00	$70.00	Unlimited Min, Unlimited SMS, Unlimited Data	$0.00	$95.00	$2,280.00

“See! I just saved you an extra $30 on the cost of the phone, and you don’t even have to give me a dime today.”

What just happened?

	Phone		Service		Total
	Upfront	Monthly	Monthly	Details	Upfront	Monthly	2 Years
AT&T	$200.00	–	$90.00	450 Min, Unlimited SMS, 3GB Data	$200.00	$90.00	$2,360.00
AT&T	$200.00	–	$110.00	450 Min, Unlimited SMS, 5GB Data	$200.00	$110.00	$2,840.00
AT&T	$200.00	–	$140.00	Unlimited Min, Unlimited SMS, 5GB Data	$200.00	$140.00	$3,560.00
T-Mobile	$150.00	$20.00	$60.00	Unlimited Min, Unlimited SMS, 2.5GB Data	$150.00	$80.00	$2,070.00
T-Mobile	$0.00	$25.00	$60.00	Unlimited Min, Unlimited SMS, 2.5GB Data	$0.00	$85.00	$2,040.00
T-Mobile	$150.00	$20.00	$70.00	Unlimited Min, Unlimited SMS, Unlimited Data	$150.00	$90.00	$2,310.00
T-Mobile	$0.00	$25.00	$70.00	Unlimited Min, Unlimited SMS, Unlimited Data	$0.00	$95.00	$2,280.00

So it’s roughly $150 more per year to have a comparable plan on AT&T over T-Mobile, unless you get unlimited everything which makes it closer to $625 more per year with AT&T for a similar plan. Also, T-Mobile’s contract is just for the device, not service. If I decided I wanted to go back to using AT&T, I could cancel T-Mobile service at any time without paying a penalty and keep my phone. But you’d still be making monthly payments on the phone, and AT&T won’t be giving you a discounted monthly rate for bringing your own device. In that situation, your’e better off taking a $1 smartphone on a contract with AT&T and then flipping it on eBay to offset the monthly cost increase.

My examples above were calculated using pricing for the Samsung Galaxy S 4. T-Mobile is offering the same promotion across all of their popular smartphone choices. In the chart below, “No Contract” pricing indicates a full price purchase to avoid any type of contract, which is the same final purchase price as if you used their previous payment plan of a down payment and monthly payment plan. For the new T-Mobile promo, you also need to commit to 24 monthly payments to pay off the balance due for the device, but you do not need a down payment. For AT&T, you need to commit to 24 months of cellular service to get the “Down Payment” subsidized price for the device.

	T-Mobile						AT&T
Device	Previous Upfront	Previous Monthly	No Contract	Down Payment	Monthly Payment	Promo	No Contract	Down Payment	Monthly Payment
Samsung Galaxy S 4	$150	$20	$630	$0	$25	$600	$640	$200	$0
Samsung Galaxy Note II	$150	$20	$630	$0	$27	$648	$705	$300	$0
Samsung Galaxy S III	$50	$20	$530	$0	$22	$528	$465	$100	$0
HTC One	$80	$20	$560	$0	$25	$600	$600	$200	$0
iPhone 5	$146	$21	$650	$0	$27	$648	$650	$200	$0
Sony Xperia Z	$100	$20	$580	$0	$25	$600	N/A	N/A	N/A
Nokia Lumia 925	$50	$20	$530	$0	$20	$480	$475	$100	$0
Nokia Lumia 521	$30	$5	$150	$0	$5	$120	N/A	N/A	N/A
BlackBerry Q10	$100	$20	$580	$0	$25	$600	$585	$200	$0
Samsung Galaxy Tab 2 10.1	$90	$15	$450	$0	$20	$480	$450	$350	$0

As you can see, the new T-Mo promo isn’t always a better deal. Grabbing a GS4 saved me $30 using the promo, but a Galaxy Note II would cost $18 more just to avoid putting $150 down upfront. The promo only saves me $2 on an iPhone 5, but it’s nice to walk out of the store with it having put down zero dollars instead of $146. An HTC One costs $40 more in the end if you use the promo, so it might be smarter to just pony up the $80 down payment when you purchase the phone. Yes, you can actually get an entry-level Windows Phone for $120 brand new. Even the Lumia 925 is begging you to buy it, where the promo will save you $50 by not paying $50 to take it home.

Source: T-Mobile