NEW YORK (AP) -- T-Mobile USA has revamped its pricing plans, the
latest move in an industry that's still experimenting feverishly with
various ways of luring customers and getting current ones to pay as much
as possible. Here's how T-Mobile's gambit compares.
most significant change is that T-Mobile is breaking the cost of the
phone away from the monthly service fee. Instead, the company will sell
the phone on an installment. It's making a big deal out of the fact that
it will no longer have two-year service contracts, but it's replacing
them with two-year financing contracts. To buy an iPhone 5 from
T-Mobile, you'll be putting $100 down and then paying $20 per month for
two years to pay off the phone. That's on top of service fees that start
at $50 per month for unlimited talk, text and 500 megabytes of data. An
additional $10 per month gives you another 2 gigabytes of data. Add $20
instead, and you get unlimited data. If you leave T-Mobile within the
two-year period, you'll still be charged $20 a month until the two-year
contract runs out.
Pros: T-Mobile's plans are generally cheaper
than the competition. If you've paid off your phone, your monthly bill
declines. You can pay off the phone early if you want, with no penalty.
You can also buy "unlocked" phones, or bring them over from AT&T,
and get a good deal on monthly service. T-Mobile's "4G" service is
relatively fast - at least, faster than Sprint, in places where Sprint
doesn't have LTE. T-Mobile also offers unlimited data service, for peace
Cons: T-Mobile's data network coverage is poor in rural
areas. It's only now rolling out an "LTE" network, and it doesn't have
access to the low frequencies where Verizon Wireless and AT&T run
their wall-penetrating LTE networks. There's no option to share a data
plan among many devices, but T-Mobile makes it relatively inexpensive to
add a line to the plan: $10, which comes with 500 megabytes of data
Bottom line: The price over two years for a 16-gigabyte
iPhone 5 with unlimited calling, unlimited texting and 2.5 gigabytes of
data usage per month, excluding taxes, is $2,020.
Verizon Wireless, AT&T
year, the two big guns in the wireless industry trotted out "shared
data" plans that let a family tap into a common pool of data usage every
month. They're betting on a future where phones will be just one of
many devices connected to wireless networks.
Pros: The shared data
plans make connecting tablets, laptops and mobile hotspots cheaper.
Verizon has stellar coverage and the largest high-speed "LTE" network.
AT&T has less coverage, but more than T-Mobile and Sprint, and it
has a fast "4G" network in most places LTE isn't available.
For single phones, AT&T's and Verizon's prices are considerably
higher than T-Mobile's - you pay for that extra network coverage and
reliability. Neither offers new customers unlimited data. The two-year
contracts are complicated, with early termination fees and varying
periods before you're eligible to buy a new phone at a subsidized price.
line: The price over two years for a 16-gigabyte iPhone 5 with
unlimited calling, unlimited texting and 2 gigabytes to 3 gigabytes of
data usage per month is $2,635, excluding taxes.
No. 3 wireless company has done the least to revamp its pricing plans -
they're pretty much the same they've been for the last five years.
Sprint has stuck to offering unlimited data plans, which is good for
peace of mind. It sells smartphone service for as little as $35 per
month through its Virgin Mobile subsidiary.
Cons: Unlimited data
service is only good if the network is fast enough to serve up all the
data you need, and Sprint's network is in a complicated transition
period. Its "3G" service is very slow. It's complemented in places by
Clearwire's "4G" network, and it's in the early stages of an "LTE"
buildout. With unlimited data as the only option, Sprint-branded
smartphone service isn't cheap. The two-year contracts are complicated,
with early termination fees and varying periods before you're eligible
to buy a new phone at a subsidized price.
Bottom line: The price
over two years for 16-gigabyte iPhone 5 with unlimited calling, texting
and data, excluding taxes, is $2,840.