27
Mar
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Yesterday, T-Mobile officially announced its new "UNcarrier" plans to much fanfare and profanity. The idea is simple: you pay one price for your service, and a separate price for your device. You can either choose to pay the full cost of your phone up front, or pay a deposit at first and then a monthly fee after that.

"But wait," the entire tech world cried, "That monthly fee is still a contract, right? I mean, I can't pay $99 up front, terminate one month later, and walk away with a super cheap phone, right?" Well, no, that would just be straight up theft and- "Then it's still a contract! Gawsh!"

...No. No, it's not "still a contract." It's actually the best thing to happen to smartphone purchases in a very long time and, if you're very lucky, the other carriers will adopt this plan. Here's why.

You Just Got An Interest Free Credit Card...

dolladollabillyall

If someone describes this as a subsidy to you, they are misrepresenting the deal. Plain and simple. Why? Because, unlike other carriers, you now know exactly how much you're paying for your phone at all times. When you sign up, you see the full cost of the hardware, how much it will take to pay it off over two years if you make the minimum payment (I'll come back to that) and the charge is entirely separate from your service plan. When you pay it off, your monthly bill goes down. While most of us in the die-hard Android world count down the days until our contracts end just to bind ourselves again for a new inexpensive-looking phone, this is a big deal for people who don't throw out their old handsets the minute they can.

Interestingly, there is almost zero difference between buying an unlocked phone with a credit card and buying it from T-Mobile using this method. While on Verizon or AT&T, you never really know how much your phone costs out of your monthly bill (and this obfuscation allows the carriers to set that level wherever they want), T-Mo shows you exactly what your remaining balance is on your hardware payment plan. In fact, the only tangible distinction between this and a credit card is that the latter will charge you interest.

Now, I know what you're thinking. "No, Eric. There's one other difference: a credit card doesn't require me to keep paying it for two years. I can pay it off as soon or as late as I want." Well, funny thing about that...

...That You Can Pay Off As Fast As You Want

This is an FAQ regarding T-Mobile's Equipment Installment Plan, which is the fancy legalese term for the alleged 'contract' in question. This document details the terms and conditions for how your phone has to be paid off. And yes, if you want to leave T-Mobile before you finish paying off that handset, the remainder of the balance will appear on your final bill. This has led many people to claim that it functions exactly like an ETF. Except for one small detail:

Can I pay off my Equipment Installment Plan early?

Yes, you can elect to pay off your EIP early at any time if you do not wish to continue through the full 24 installment periods. You may pay any extra amount at any time on My T-Mobile, through Customer Care, or at a Retail store. [emphasis added]

This, right here, is the reason that this is not a contract in the same way that Verizon, AT&T, and Sprint's terms are. That $20/month is not just a monthly fee. It's a minimum monthly fee. As anyone who knows anything about avoiding overwhelming credit card debt can say, you never just pay the minimum amount due. Now, that's normally because interest is where they kill you, but the same principle applies here.

Let's say you want to get a shiny new Galaxy S III right now. That's not a terribly great decision, since the S 4 is going to be released very soon, but you need something this instant for whatever reason and can't wait. Plus, you're pretty sure you can sell it later on to recoup some of the costs. The price of that phone is $70 up front and $20 per month.

However! Let's say you're smarter than the system. You don't like contracts and you don't want to be tied down. The total balance, down payment aside, is $480. Instead of paying $20 every month, you pay $100. That's going to make your monthly payment higher, but for a much shorter timeframe. Besides, you'll have to pay that money anyway. And $100 every month is a lot easier than coming up with $550 right off the bat. If you pay that $100 every month, your 'contract' is up in five months.

Let me repeat that: you have the option of a five month 'contract'.

Or eighteen months. Or two months. Or the full twenty-four. Your 'contract' is however long you decide you want it to take to pay off that phone that doesn't actually cost a hundred bucks. That's where the real trouble lies. We've been under subsidies for so long that the primary way to save money is to game the system somehow. Get out of your contract early and qualify for "upgrade" pricing. Well, no more. Now you can pay that phone off at any time, but you have to pay it off.

The One Way It Could Be Better (But Probably Never Will Be)

Something better, but not perfect

In a way, this is the best possible situation. If you plan ahead—which, admittedly, is a problem for many consumers—you can set your 'contract' length to whatever you want it to be. This is flexibility on an unprecedented level (ignoring that T-Mobile has actually had this payment plan since 2011 at least, but the branding and marketing matters a great deal in clarifying things for the customer, so we won't nitpick).

However, there's one freedom you still lack: the ability to cancel your service without paying anything that even looks like an ETF. If you pay the minimum amount necessary, then you'll still have a sizeable chunk of change to fork over if you want to leave T-Mobile for another carrier. In fact, it would be even larger than Verizon or AT&T's ~$350 fee at first for most phones. Why can't T-Mo just let you keep paying for the device month-to-month, but leave the carrier?

Admittedly, that would be nice. I won't argue that. But there is one major reason that T-Mobile won't do it: it's still a carrier. As much as it's trying to convince us it isn't, the main way it makes money is by people using (and paying for) the network. As I stated earlier, this is essentially an interest-free credit card. No one wants to get into the interest-free credit card business without some other way to turn a profit. That's a money pit. Someone's gonna stop paying, the margins will be too low, or maybe there will be no margins at all, and the business drowns in overhead. No, as much as we may dislike it, requiring you to finish paying off your hardware before terminating your service is the closest to reasonable we're gonna get, unless T-Mobile starts charging interest. Which is something no one wants.

That being said, if you really want to sign up for T-Mobile service now, have the freedom to leave in three months, and still not have to pay a bunch of money up front for your phone, you can do that, too. Just not through T-Mobile. Go to Best Buy and get one on a credit card with one of those six months same-as-cash deals. They're literally the same. Except T-Mobile exchanges the threat of charging you interest later for the simple requirement that you pay off the hardware you're essentially leasing before you switch carriers with it. It's a fairly reasonable trade off.

Freedom From Everything But Responsibility

Unfortunately, as with growing up in general, discovering the freedom these new plans offer you is a double-edged sword. On the one hand, you have the ability to create a 'contract' that's as long, as short, and as flexible as you want. Want a new phone every year instead of two years? Pay double the minimum monthly fee (which on an unlimited data plan with a $20 minimum would still only put you at $110/month, about on par with what the other carriers charge for the same service). Want no commitment at all? Buy the phone outright. It's all up to you.

On the other hand, well, it's all up to you. Which kinda sucks. Up until now you've been able to pretend that the real price of a phone is unknowable, and enjoy paying smaller amounts of money up front. Now, though, you're confronted with the naked truth: one way or another, you're going to pay out the nose for that phone.

Rough approximation of T-Mobile CEO John Legere's speech

This is part of the reason that T-Mobile chose such an antagonistic attitude to announce its New Deal. The American smartphone-buying public has been living a lie for years and now the ugly truth is showing through. There will be anger and there will be blood. T-Mobile elected to direct that anger at Verizon, AT&T, and Sprint instead of at itself. To a certain extent, it's worked. While some of the cattier writers out there still call it a contract, the carrier is getting a fair amount of publicity for going against the grain and empowering users.

But with great power, comes great... well, you know the drill. There are two main reasons we hate contracts: they make it difficult for us to change carriers, and you have to wait to upgrade phones. Well, now neither of those is true. You're not required to have a contract and, if you want a cheaper phone up front, you're only bound for as long or as short of a time as you'd like. The only catch is that you have to pay for your hardware. And if you're really desperate to upgrade early, you can add another device payment plan without waiting to pay off the others.

Every time I write about cell phone unlocking and the legality thereof, the one mantra I hear repeated over and over is "I paid for the phone, let me do what I want with it." Well, if you want to do what you want with it, it's time to start paying for it.

Eric Ravenscraft
Eric is a snarky technophile with a taste for the unusual. When he's not obsessing about Android, you can usually find him obsessing about movies, psychology, or the perfect energy drink. Eric weaves his own special blend of snark, satire, and comedy into all his articles.

  • ProductFRED

    That title confused the hell out of me. Should be, "No more contracts on T-Mobile, just pay for your damn phone."

    • Freak4Dell

      No, his title makes sense. He's correcting all the people that think T-Mobile still has contracts, but just worded them differently.

      Your title would be more appropriate for an announcement of the new plans, which was done yesterday.

  • Ashish Raj

    Thank you Eric for your timely article!! I've been trying in vain to explain this "ugly truth" to my friends.. now i can just point them to your article.

  • Kokusho

    Funny how US are kinda slow when it comes to internet provider.

    In France we have this kind of offers for more than a year now. Unlimited call, SMS/MMS and 3gb of Data for 20$/month with the option of adding a monthly amount to pay your phone. Or simply buy it cash wherever you see fit.
    It's a great system for the consumer.

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      We know. :(

    • FrillArtist

      Yes, phone plans are cheap but not when the Euro is having a crisis and countries are having their banking systems on the brink of collapse. Greece, Spain, Cyprus...

      • Kokusho

        yea you are right, but if I recall correctly the US public dept isn't something to brag about neither so I don't thing carriers are the main reason here...
        Anyway I'm not here to compare country, It's just to give some perspective on this model which already exist somewhere else.

        • lljktechnogeek

          At the risk of starting a political derail, I'd like to point out that having direct control of your own money supply allows for methods of handling public debt that the Eurozone countries simply don't have as an option.

          Attempting to determine the wisdom (or lack thereof) of any such method is far more likely to start the aforementioned derail, so I'm just going to leave it at that.

      • Amenemhat1

        Sorry but you are completely mistaken. The US just has better PR when it comes to masking crisis. The fact is that we are ever worse of than any Euro country. They just have the balls to do something about it. The US is too busy with baseball, the kardashians, apple, and android to even notice. I only wish we would get as mad as Europeans do; then we would see some change. Ok, back to the carrier plan topic.

        • http://www.facebook.com/RobertLandrum13 Robert Landrum

          Truth. Someone buy this man a beer.

    • Tron

      One thing many fail to understand the difference between Europe and America is size. Sure its easy to run a network the size of the state of Georgia off of 20 bucks a month. But in the US they have to maintain 9,826,630 sq km of network or at least try. That's one of the reasons why we pay so much

  • Aaron Berlin

    What T-Mobile is doing is especially disruptive for the OEMs - OEMs have a love-hate relationship with the subsidy model. On the one hand, it means that large numbers of people feel like they can afford a top-shelf device that might feel queezy shelling out $600. On the other, it means consumers have no idea what their devices are really worth, and so there is virtually no market for unlocked phones in the united states. OEMs may be selling more top-shelf hardware than they would otherwise, but they have no direct relationship with consumers - the carriers are always in the middle, making demands. TMobile is basically making it's role as a carrier agnostic as to where you buy the phone. That will HOPEFULLY mean intense new price competition between OEMs, as there's a lot more room to compete between $600 and $0 than there is between $200 and $0.

    • blix247

      Its not price that prevents OEM competition, its the carriers. I bet TMobile pays just as much per device as other carriers, relative to volume.

      The carriers themselves are the problems, they dictate what they want on the devices. They are the ones demanding touchwiz, motoblur, etc. You think Samsung and Motorola enjoy shelling out all the money it takes to update each and every device they release? They would much rather keep it stock, and just switch out drivers when Google updates Android.

      Google Play is more of a disruption here, as it provides OEM's a new path to the consumer. In this case you can directly see Google's influence on the phone. They are inserting themselves in place of carriers. So on Google Play its what Google wants, but at least Google's taste tends to align with that of its most enthusiastic customers.

      A real disruption would be a path to market for the OEM's where the consumers directly dictate what they want, and the middle man exerts no influence on the device.

      • http://www.facebook.com/profile.php?id=100000003999549 Mike Harris

        Did you just say it's the carriers who demand touchwiz, motoblur, etc. - not Samsung and Motorola?!? How can anyone even respond to that? That's kind of like saying autotrader.com demands car companies to put their badges and logos on their cars before they sell them. You're living under a rock.

        Phone manufacturers use their custom software on their phones so they can stand out and have a unique product.

      • John Petersen

        True, but T-mobile is the only place where that dispruption matters, because they're the only carrier where purchasing the phone directly from Google nets you a lower contract price from the carrier. So, yes, T-mobile is highly disruptive by allowing competition in the device market that is not possible with other carriers.

  • TheOtherJames

    Finally a blogger/pundit that gets the difference between a contract and an interest-free loan. Yesterday was infuriating, seeing all the supposed experts that couldn't see the difference.

    • camera531

      I think it's a scam. This article just goes in circles. You pay an upfront fee, just like a subsidy, then pay additional monthly payments that make your total monthly bill as high as the competition. If you cancel early, the final payoff is usually more than the ETF. Anyone is "free" to cancel their contract and leave by paying an ETF (again, which is often less than T-Mobile's payoff). And you can buy at full pricefrom any carrier.

      • Cuvis

        You know things have gone pear-shaped when telling people upfront how much something costs is a "scam".

        • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

          Genuine laughter was produced. I would like to buy you a beer.

        • http://profiles.google.com/5up.mushroom 5up Mushroom

          Bravo. I was going to hit reply on this asinine comment, but then.. there was your brilliant, short response. No more needs to be said.

      • Freak4Dell

        Show me another postpaid carrier that gives you unlimited everything for $90 a month ($70 plus the biggest EIP of $20). Show me another carrier that lets you buy a phone at full price and pay less per month for your plan because of it. Sprint still makes you sign a contract regardless of whether you pay full price for the phone or not, and AT&T and Verizon will happily let you pay the same amount that everybody else paid, even though they're not subsidizing your phone for you.

        • camera531

          You and cuvis are missing the point. T-Mobile had those prices in place long before this "new deal". Their prices are great, but no better now than last week, last year, etc. Same system, new name.

          • Freak4Dell

            No. They had contracts before. Now they don't. It's a similar system, not the same system.

          • camera531

            It's the exact same concept. Credit check and installment payments, making monthly bill as high as contract bill was. If you cancel early, you're obligated to payoff the phone, which will often be MORE than the previous ETF. There was always the option to buy at full price and get better rates. So...Same system, new name.

          • Freak4Dell

            Sigh. You go ahead and believe whatever you want to believe.

          • camera531

            Seriously, you can't understand what I'm saying (which is very obvious)?

          • http://www.ronakg.com/ Ronak Gandhi

            People are discussing T-mobile uncarrier plans vs other Contract plans and you are discussing T-mobile uncarrier plans vs old T-mobile plans.

          • camera531

            Exactly. Why are you the only one who comprehends that?

          • Freak4Dell

            All you're saying is that you don't understand how this is not a contract. If you can't see that the old plans (which charged you an ETF plus the payoff on EIP if you want to leave) are not the same as the new plans (which only charge you the payoff on EIP if you want to leave), then I can't really help you. I've already tried explaining it in as simple terms as I can come up with.

          • camera531

            Ok, try to listen and comprehend for a second... If you put a "down payment" on a T-Mobile phone, you are contractually obligated to pay the full price in installments, bringing your monthly bill to the contract rates. Under the contract, you pay the same upfront "subsidized" price, then have a 2 year obligation. But, you can cancel the contract anytime for $200, which is less than canceling the new plan and paying off the rest of the phone. T-Mobile has offered the installmentdeal for months already. It's not even new, and there was NEVER and ETF on top of paying off the phone. Know what your talking about before debating

          • Freak4Dell

            Trust me, I know what I'm talking about. You're confusing the Classic and Value plans, and you're mixing and matching between them.

            The Classic plans worked like regular plans on any carrier. You pay price for the phone, then you pay a monthly fee for the service. The price for a high end phone was usually $200-$300 unless you got in on a sale day. The monthly fee for unlimited everything on Classic was $90. Then, if you wanted to cancel, you paid the ETF of $200. For a top of the line phone, you paid $500 to be contract free, plus at least a month of service. Total = $590.

            On the old Value plans, you paid a down payment, then you paid the monthly service charge, then you paid the EIP. The down payment was typically around $200 for a high end phone. The EIP on a high end phone was $20 for 20 months. That's $600. The monthly service for unlimited everything was $70. The old Value plan had a contract also, with the ETF. So, to break free on an old Value plan, you pay down payment + EIP payoff + $200 ETF + at least a month of service. Total $870.

            On the new Value plan, you pay a down payment, then the monthly service charge, then the EIP. There is no contract, so no ETF. The down payment is $100 for high end phones. The EIP is $20 for 24 months for high end phones. The monthly charge for unlimited everything is $70. To break free on a new Value plan, you pay down payment + EIP payoff + at least a month of service. Total = $650.

            The old Value plan was never cheaper to break free from than the new Value plan. The old Classic plan was cheaper to break free from, but only if you didn't pay for any more than 3 months of service. 3 months is the breakeven point between an old Classic plan and a new Value plan.

          • crankerchick

            Thanks for posting the old comparable plan prices. Those of us not on T-Mobile that just want to analyze the new plans to the old ones thank you. Lots of sites compare to other carriers, which to me is dumb. Of course T-Mobile is cheaper than others--that's the whole point. I've just been wondering if T-Mobile did in fact "go down" on prices with the new plan, or simply charge the typical 24-month customer the same amount in a different way, as in over 24 months, the customer pays the same amount under the old plans and the new plans. Clearly, 24 month customers benefit from the new plans for obvious reasons (no contract and not keep paying for phone after contract expires).

          • crankerchick

            It's worth noting that for someone under the old plans, with 24 month contracts, they would save $20 in 24 months compared to the old Value plan, and $100 compared to the old Classic plans, int this scenario of unlimited everything. In addition to the $20-$100 savings, the main differences, then, are the new plan is more friendly to not being bound to a contract for upgrading at the subsidized price, switching carriers all together, or keeping the phone longer than 24 months.

            This may have been camera531 was trying to say.

          • jeffrey beck

            I work for Tmobile. Value plans existed before this weekend. They required a 2 year contract and had an ETF of 200 dollars in addition to paying off the remaining balance of your phone. The other huge change here that is being overlooked is that every line now had totally unlimited talk and text with 500 mb of 4g and unlimited 2g Web. You literally cannot incur overage charges. That is a huge freaking deal!

          • firefly

            You are so wrong on that last sentence. Coming from someone that sold tmobile under the old value plans, you indeed had to pay an etf and the balance of the eip. You also had to pay a higher downpayment upfront(higher than the subsidy prices in most cases). If you do the simple math and cost compare to the other carriers these new plans blow the doors off the industry. T-mobile basically became a prepaud carrier that is giving you a free and easy way to buy the best phones(not typically offered on prepaid) upfront and pay them off interest free. Wheres the "scam" in that?

          • efan

            right so you want them to just give you a phone for less than what is costs if you cancel early? you can't get just a phone, cancel the line, then get a free phone. it doesnt work like that.

          • camera531

            I can't believe these replies... All I'm saying is that no one is saving money or are better off with this new thing than they were with last week's T-Mobile deals. Nothing has changed as far as a customer's bill. IT'S THE SAME THING, just with a new name and a new line item on your paper bill. Is it really that hard to understand?

          • Jesus

            The only difference is the contract part. You can pay off the phone EARLIER than before's system

          • http://twitter.com/BIGELLOW Bob Bigellow

            What happens in both scenarios when you keep your phone past year two into year three? Go ahead, I'll wait and let you do the math.

          • http://www.facebook.com/profile.php?id=1612587306 Bob Falfa

            Actually they've had this system in place for a while now. It was called the "Value" plan versus the "Classic" plan you're talking about. The writer talks about it in the article. "(ignoring that T-Mobile has actually had this payment plan since 2011 at least)"

          • M42

            Exactly. I got my phone last June and am paying the same price for unlimited everything and am paying $15 a month for the phone. They're just moving the pea under another shell and trying to convince the sucker public they've done something new and great.

          • Cuvis

            You're right that this system existed before. Kind of. This was T-Mo's Value plan. What they're really announcing here is that they're discontinuing the Classic plan completely.

        • John O’Connor

          You may be somewhat mistaken. Buying a new phone outright on other carriers will not extend your contract, at least that has been my experience. Sure you still have the remainder of the contract for whatever subsidized device you purchased previously, but I don't see that as a problem

          • Freak4Dell

            No, you're correct. You don't extend your contract for purchasing a device outright. However, I was talking about coming to a carrier for the first time. T-Mobile lets you pay a lower monthly charge for either purchasing the device outright or bringing your own device, and there is no contract. AT&T and Verizon will charge you the same amount that they charge somebody who took advantage of the subsidy, but there will be no contract. You never have to sign a contract with these carriers if you purchase devices outright, but you also don't save any money by doing this. Sprint will charge you the same amount and still make you sign a contract. Once you finish the initial contract, you do not have to sign any more contracts as long as you purchase devices outright.

          • jeffrey beck

            That right there is the key difference. They have also done away with activation and upgrade fees.

        • HotInEER

          Sprint has never had me sign a contract when I bought the phone out right.

          • Freak4Dell

            Did you buy your first phone with them outright?

            I've asked them multiple times about it, as have people on SprintUsers. The response is always the same. If the account is brand new, a 2 year contract is required regardless of how you got your phone.

          • faceless128

            this is correct. if you buy a new phone outright on a new line with Sprint, you still have to make a 2 year agreement, but if it's an upgrade, it's not.

      • http://twitter.com/s99nj S. Ali

        Did you miss the part that the monthly rate is almost $40 lower than the other carriers? Did you miss the part where you can bring your own phone? Are the Verizon and ATT shill out on AP now?

      • AGWednesday

        You're skipping over the not-so-small fact that you can now pay off your T-Mo device early. You're no longer stuck with paying it off over a two-year period, as you are with the other major carriers. It's not a contract. You're not locked in. As the article said, you can choose to make $100 payments for a few month, and then leave.

        My only question now is, what if, after paying off my phone early, some new phone comes along? If I pay off Phone A in 5 months, am I now free to get Phone B with a down payment, restarting my non-contract?

        I see no reason the answer would be no, but a firm answer from T-Mo itself would be nice.

        • camera531

          And your're apparently naive enough to miss the fact that you'll pay over $400 to be "free early", instead of only $200 as the ETF before to be free and clear. You're contractually obligated financially either way, but end up paying MORE the way you described.

          • Freak4Dell

            Seriously? You're calling other people naive? Do you really think that with the old Value plan, T-Mobile was just going to let you walk away without paying off the phone? You always had to pay off an EIP, but now you don't have to pay an ETF on top of that.

          • camera531

            Dude, you're wrong! The old plan was the subsidized price and an ETF if cancelled early. NOTHING ELSE. That's why they're doing this, because it was possible to acquire a phone for less than the full price.

          • Freak4Dell

            You're getting your plans mixed up. I explained it in another comment.

          • jeffrey beck

            Dude, I'm a tmo rep and you are so wrong. You paid eft plus the remaining balance before. Do you even have Tmobile?

          • camera531

            I find it hard to believe that you're a tmo rep. I had T-Mobile and I know for a fact that you put money down and paid installments, just like the new plan. There wasn't an etf, you just paid off the phone if cancelled. There never was a contract to even have an etf (just like now).

          • jeffrey beck

            If I were to lie about my job I would tell people I'm a pediatric heart surgeon not a phone rep at the nation's 4th largest wireless company. Feel free to call store 449 in Tukwila Washington tomorrow after 3pm PST and I will personally email you proof that Tmobile had etfs on every classic and value plan until this past Sunday. Gauntlet thrown. Don't mess with a man in magenta.

          • Freak4Dell

            If I'm ever in Washington, I'm buying you a drink.

          • camera531

            You can argue all you want, but tmo never had etf's when the phone is bought outright, either literally our through installments. That was the whole point of buying outright instead of contracts. Otherwise, they would've both been contract plans.

          • joe

            This is the best reply ever.

          • Guy Hoang

            Termination fee for other carriers is more like $350 for smartphones. So a flagship phone on AT&T costs $200 + termination fee of $350 + activation fee of $36 = $586 vs $480 on TMobile.

          • camera531

            I'm not taking about other carriers! T-Mobile's ETF was $200.

          • Guy Hoang

            But the old classic plans cost a lot more per month compared to this value plan.

          • camera531

            Only if you pay full price for the phone (I feel like I've explained this 20 times and everyone just bashes me for it). IF YOU FINANCE THE PHONE, THE ADDED MONTHLY INSTALLMENTS BRING THE MONTHLY BILL BACK UP TO THE OLDER CONTRACT RATES. So you're not under contract, but as far as payments and the contractual financial obligation (if you just make all of the finance payments), it mimics the contract situation of old. So my point has been, under that scenario, that the new plan has the same basic impact to the customer as the older contract plan did. This has been exhausting. I think I'll go buy a new T-Mobile Z10.

          • Guy Hoang

            True, but most people do not need a flagship phone. The Optimus L9 is $200 and is a fantastic value. Tech savvy users can use the $300 Nexus 4.

            With the phone paid off, the monthly fee is now more affordable. Win win!

            Enjoy your Z10, it looks like a nifty device.

          • camera531

            That's a good point, but for an average customer wanting a Galaxy S3, for example, and buying it as I explained, it would be no different to them as if they bought it under the old contract.

            And thanks about the Z10.

          • http://www.facebook.com/RobertLandrum13 Robert Landrum

            I've never once posted a message on here but I felt I had to after reading all of your comments.

            You are correct and I understand what your saying. Don't see how it's so hard to understand. That's all. Away I go. lol

          • camera531

            Thank you Mr. Landrum for being the voice of reason.

          • AGWednesday

            Now you're tailoring your example to bypass the point I made (far) above.

            Yes, if you make the downpayment and pay the minimum payments, you gain far less from this. However, that doesn't mean T-Mobile's new non-contract plans are no better than the contract plans they offered before.

            The fact is, the new plans are better because, as I stated, you're no longer locked into T-Mobile for two years. You can now pay off the phone as early as you want and take your business elsewhere (or possibly start all over with a new T-Mo phone).

            You're only looking at this from a monetary perspective. This isn't about that. This is about no longer being locked into T-Mobile if you don't want to be.

            And, for the record, jeffrey beck was absolutely right. if you wanted to leave T-Mobile early, you always had to pay your phone off in addition to paying the ETF. T-Mobile isn't stupid. They wouldn't let you walk away with a $200 GSIII.

          • camera531

            No, you couldn't walk away with a $200 GS3, you'd have to pay the remaining $400+ first, but then you own the phone. There wasn't also an etf. And whether on contract or not, it's always about money...And you're not LOCKED to a carrier when on contract. You simply pay the etf and you're free (just like paying the remainder of the phone balance on the new plan).

          • paleh0rse

            Better yet, instead of worrying about leaving T-Mobile, the OTHER real benefit is that you can now SELL your phone on the open market, use the proceeds to pay off the EIP, and then start over with the new phone of your choice... ANY TIME YOU WANT!!

            In all honesty, I wouldn't be surprised if you could even make a profit doing so with unlocked phones that work on more than network...

          • camera531

            You could also sell a phone on contract (eBay, for example) and simply pay off the etf. Wow, what a concept...

          • Guy Hoang

            Dude I just got a Z10. :D

          • John O’Connor

            The point you are still missing is that it isn't ba service contract anymore. In any scenario you pay for the phone, because they are not free. What separates this plan from the rest is that you are not tied to a contract if the device is paid off. On another carrier you may meet the cost of the subsidy months or longer before your contract is up and you will not see a reduction in the price of your plan for having done so.
            You could buy a device outright on another carrier but still would pay the same amount for the monthly service contract as someone who is subsidized. I can't think of a simpler way to explain it than that.

          • camera531

            You're right, but you are also missing my point. I'm NOT comparing this to other carriers. I never had. I've simply been comparing this new plan to T-Mobile's discontinued contract plan, and making the point that if you pay the down pmt and then the installments for 2 years, it will mimic what the older contract situation did. That's all. T-Mobile still has better prices and deals than the other major carriers, but that was NEVER my argument.

          • http://twitter.com/BIGELLOW Bob Bigellow

            So, you're saying that T-Mobile is offering T-Mobile's plans. How profound.

          • jeffrey beck

            It doesn't if you get a cheaper phone. example : the L9 is 8 dollars a month on the new plan 70 + 8=78
            Old plan 90 for unlimited everything. You actually paid more upfront on classic for the L9 as well. So you paid more to start, more each month. Now you pay less a month if your phone costs less and there are no ETF's like on the old value plans.

          • http://twitter.com/BIGELLOW Bob Bigellow

            This is hilarious watching you scramble around trying to teach everyone. How much do you get paid for that?

          • steve

            I agree, I drove 50 min to my closest tmobile store and thought I would take advantage of the promotion for phones. I was paying $64 per month on the Value plan (I brought in my phone which is 3 years old) When I switched to the Simple Plan $50 per month It "seems cheaper" now i was going to get the iPhone 5 but guess what! they said the $99 price tag is for new people only; if i wanted the iPhone they told me the down payment would be $280 + $40(tax) = $320. Doing the simple math
            Previous plan $63 + tax
            Simple plan $50 + *EIP of $13 per month on top = $63 + tax
            *(providing I paid $320 upfront down payment for the phone)
            ---OR---
            Simple plan $50 + $20(if $99 was the down payment) = $70 + tax
            Bottom line Same game, different name
            which was why I quit with T-Mobile & went virgin mobile prepaid Ive tried At&t and Tmobile they both are horrible when it comes to even helping people in time of need. I dare not go to Verizon or Sprint, as they are also expensive. common sense unless your going to find a carrier that actually cares about there customers go prepaid.

          • jeffrey beck

            Plus they require data on their plans which Tmobile does not.

          • paleh0rse

            ummm, no.

        • paleh0rse

          You actually don't even need to pay off Phone A before buying and using Phone B with a second EIP. As I understand it, you can have as many concurrent EIP's as your credit and monthly income can handle.

          • camera531

            Every EIP requires a new service plan

          • paleh0rse

            Source?

          • camera531

            Source? Just call T-Mobile and ask...

          • paleh0rse

            So you're saying that you cannot run multiple EIP(s) on a single line? Or, put differently, are you saying that you simply have to pay off EIP1 before you can start an EIP2? (in other words, we're limited to one EIP per line?)

      • Guest

        I think you are a scam.

      • paleh0rse

        Please show us how/where you can pay off your shiny new phone early on ANY of the other carriers, at ANY time, and then see an immediate drop in your monthly charges on the following month's bill...?

        • camera531

          OMG seriously... This has never been about T-Mobile vs. the other carriers.

          • paleh0rse

            Well then here's the difference:
            With the old Value Plans, you had to pay an ETF -and- pay off your EIP(s).
            With the new UnCarrier plans, you only need to pay off your EIP(s).

          • camera531

            With all due respect, because I'm sure you're a cool person, you're dead wrong. I've had tmo value plans. There was NEVER an etf if you bought the phone outright (including through installments). It was, like today, a simple no-contract plan. You'd have to payoff the balance. of the phone (because that's what you're doing, buying a phone outright), but only the contract plans had etf's.

          • paleh0rse

            So you're claiming that the old Value Plans did not include a contract or ETF, And that they're 100% identical to the new UnCarrier Plans?

          • Freak4Dell

            At first, I thought you were just ignorant, but it's become clear that you are actually downright retarded. If you don't want to believe the multiple people that told you you're wrong, including at least one person who makes a living off of knowing T-Mobile plans inside and out, here is straight from T-Mobile. Go to the bottom of the image and read the fine print.

            http://i.imgur.com/Y5YWGwD.jpg

            You'll probably accuse me of doctoring the image or something equally ridiculous, so I'll also tell you how to get to the archived page yourself.

            http://web.archive.org/web/20130116011550/http://www.t-mobile.com/shop/Packages/ValuePackages.aspx

          • camera531

            With this kind of BS trash talk, I've lost all interest in this forum. Later

          • Freak4Dell

            Don't let my blunt honesty stop you from reading AP. I'm not staff, so my opinion of your intelligence doesn't represent the opinion of AP.

      • http://twitter.com/BIGELLOW Bob Bigellow

        Except, if you decide to keep your phone for longer than 2 years, the monthly cost of your subsidized contract doesn't drop suddenly.

  • http://androidandme.com/ Taylor Wimberly

    Great article, but you left out how Google Play will keep driving down the price of unlocked devices.

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      Well, that's a little outside the scope of this article, but yes, that's actually likely to become a huge factor. For example, you can buy the Nexus 4 off contract for $300-350, but T-Mobile has it for around $470, or, I think, $17/mo. You can look at that and see whether it's better to buy it from T-Mo or Google. Before, that price was kind of obfuscated because you just saw a $200 subsidized price (which most folks here knew was crap, but not everyone is that familiar with how contracts work), but now, it's very difficult for T-Mo to hide an inflated price for a handset.

      So, which do you want? A ~$450+ EIP from T-Mobile, or a $300 Nexus 4 on your credit card? They're essentially the same thing. It should definitely make the choice a lot easier for consumers.

      • FrillArtist

        Not everyone uses their credit card to buy their Nexus 4 like you.

        • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

          *sigh*

          No one said you *have* to use a credit card. The point is that there's no difference between that and buying from T-Mobile. Sheesh. Pay cash if you want, I don't care.

          • http://twitter.com/jwyche007 A Deaf Mute

            There's no excuse for buying a nexus on a credit card, I have a retail job and I was still able to buy mine with cash.

          • Freak4Dell

            Just because you pay with a credit card doesn't mean you can't afford to pay for the item. I put everything on my credit card for a couple of reasons. First, I get cashback on my purchases. Second, credit cards provide more protection than cash (or debit cards). If something goes wrong with the transaction and the seller refuses to cooperate, you can do a chargeback. You can't do that with cash. Some credit cards also provide additional benefits like extended warranties. I pay off my credit card at the end of every month, so it's no different than using cash or my debit card. I just reap the additional benefits of it as well.

          • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

            Thank you. :P

          • jeffrey beck

            I get you.

          • marsdta

            There are lots of "excuses" to by a nexus on a credit card. I had the money to pay it for it with cash, but used my credit card instead. Got cash back ,admittedly it was only 10 on this purchase but i average 150 a year, and i got my warranty extended to two years,

  • http://williamjudd.com/ William Judd

    Awesome, great breakdown - can't believe it's taken so long for someone to write this all down.

  • http://www.facebook.com/people/Zach-Dunton/159100916 Zach Dunton

    According to tmonews, you can cancel service and just pay for the phone. http://www.tmonews.com/2013/03/t-mobile-if-you-cancel-you-own-the-phone-can-be-unlocked-once-paid-off/

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      I mentioned this in another reply, but the short version is that if that is the case, T-Mobile has not updated its terms to reflect this ability. On a forum post announcing the new plans, T-Mobile linked to the EIP FAQ I quoted above: http://support.t-mobile.com/community/community/support_news_%26_updates/blog/2013/03/26/un-restricted-and-un-limited

      And that document says that if you cancel your service, the remainder of your device fees will show up on your final bill. If you really do have the option to keep paying the monthly installments, then that would contradict this document. Now, that doc was created in 2011, so it's not impossible that things have changed and it just hasn't been updated, but so far I haven't been able to find any official confirmation that you can do this. Just other blogs saying so.

      If I can confirm that you can do this, I'll update the post.

      • http://www.facebook.com/jasonchung Jason Chung

        Gonna be honest, I was on the t mobile new value plan for 3 lines and 1 phone had EIP payment. Wanted to cancel because the reception was bad. This was about 8 months into plan. Paid off my EIP, then tried to cancel and told me 2 lines were not under contract and 1 was. Checked the EIP agreement, and it said I was under contract for w/e amount of months. So people should really check their EIP before agreeing to it. I don't trust phone companies, had to pay the full cancellation fee on 1 line.

        • Freak4Dell

          The Value plans had contracts + EIPs (if you chose to have an EIP). The UNcarrier plans do not have contracts.

          • http://www.facebook.com/jasonchung Jason Chung

            yea maybe. i still dont trust them until someone has a copy of a new EIP agreement and posts it.

          • Freak4Dell

            Not maybe. It's 100% true.

            Actually, never mind. You're probably right. T-Mobile has just spend tons of money on completely false advertising. I'm signing up to participate in the class action right now.

          • http://www.facebook.com/jasonchung Jason Chung

            well, have you got your hands on a new EIP agreement? then you can show me in the contract where it says my EIP agreement is void if i pay off the rest of it. Because this is the best article ive seen on it and it quotes one question in a FAQ that doesnt delve into any details. And T mobile hasnt said anything about EIP details which is why i had to come here to read the article in teh first place, mr t mobile expert.

          • Freak4Dell

            I don't need an EIP agreement in my hand because the EIP hasn't ever had anything to do with the contract. The EIP was always a separate thing. The old Value plans had a contract regardless of whether you purchased a device using EIP or not. I brought my own devices for all 4 lines on the old Value plan, and I'm still under contract for all 4. These new plans do not have any contracts at all, so there's no point in debating about contracts. If you want to be done with T-Mobile, pay off your EIP and you're done.

            The only debatable part is whether they'll let you keep paying the EIP payments without paying for the T-Mobile service. For that issue, Eric has taken the correct stance based on what information they have given out so far.

          • http://www.facebook.com/jasonchung Jason Chung

            you know what, it doesnt even matter. i switched from t mobile because i got no reception whereever I went and im bitter at their cancellation fee. and its cheaper on my att family plan to get new phones every 2 years with a 10 GB sharing plan since we dont use that much data.

          • jeffrey beck

            Keep telling yourself that it is cheaper bud. It may make the pain less but you pay almost a grand more on that plan every 2 years.

          • jeffrey beck

            I a tmo rep. I can assure you that contracts are dead

  • http://twitter.com/NothAU Tony

    I've been with Virgin Mobile in both Australia, and Canada, and it works a similar way for both as T-Mobile are (now?) doing.
    In Australia, there's still a contract (2 years max), but after 6 months if you want to leave, just pay whatever you owe, and the remaining amount left on the phone.
    In Canada, there's the option of a contract (3 years), or putting it on a "supertab" which gradually gets paid off as you pay your bill (10% your monthly bill amount, inclusive, not added on top).

    Still not sure what one I think is the better option though

  • Chris Sanner

    I thought I saw somewhere that you CAN stop using t-mobile as long as you keep paying for your phone...

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      That was going around and I heard the same thing myself, but according the FAQ for the EIP, you do have to pay off the entire balance when you leave.

      "If I cancel my service, what happens to my Equipment Installment Plan balance?

      If you elect to cancel service, all remaining installment charges will appear on your final bill."

      http://support.t-mobile.com/docs/DOC-1674

    • http://profiles.google.com/cory.simpson Cory Simpson

      I read somewhere you can actually just turn the phone in and not have to pay for it. That sounds too good to be true though.

      • http://www.androidpolice.com/ David Ruddock

        I believe T-Mobile will give you a credit for the phone, but there will still be some charge (they're basically offering you a used phone credit). You'd be better off selling it yourself, probably.

      • Freak4Dell

        They have a trade-in plan, but those never give you what the phone is actually worth. You'd be better off just paying it off and selling it yourself to recoup the cost.

        • http://profiles.google.com/cory.simpson Cory Simpson

          Figured it was too good to be true :)

          • paleh0rse

            Just sell it on Swappo.com at that point! ;)

      • Chris Sanner

        If you turn in they will give you trade in credit. So you'll still have to pay something but not as much

  • http://www.facebook.com/bentley.ky Bentley Ky

    I changed my account last night. I always buy my phones out right anyway so that's not a big deal. However, switching plans to no contract I am now saving $112. PER month for 3 lines! Way to go T-Mobile! I've been with then since before it was called T-Mobile & have no intention of leaving.

    • Bob G

      Please report back about coverage issues if you have any. Would be interested to see the results of coverage vs. cheapness.

      • http://www.facebook.com/bentley.ky Bentley Ky

        We already drove across the state this AM for biz and I see no difference in my coverage area. It's always been great and seems to be the exact same coverage.

      • Dan

        Any reports of coverage are worthless unless that person lives/works/plays in the same places where you live/work/play. People who constantly scream "T-Mobile coverage sucks!" are just as ridiculous as the ones who shout back that the coverage is great without identifying exactly what geographical location they're talking about. There's a suburb two miles from me that gets almost no coverage (1 bar, at best) from AT&T while Verizon gets 3 or 4 bars. At my house, AT&T has great signal strength and Verizon has 2 bars on a really lucky day. So, which of those carriers sucks, which one is awesome, and why would you care if you don't live here?

  • Kernschatten

    GS3 purchase price from Best Buy is $$699.99
    Purchase price from T-Mobile? $549.99

    I think I would rather buy from T-Mobile.

    • HotInEER

      Nexus 4 in play store is $349 on T-mobile site it's $507, yesterday it was $550. I think I would rather by from Google.

      • jeffrey beck

        The beauty of the new plan is that you can with no consequence.

        • paleh0rse

          this.

        • HotInEER

          Even buying it out right from T-mobile is too expensive. Your better off buying from Google and then getting a T-mobile plan.

  • http://www.androidpolice.com/ David Ruddock

    T-Mobile's clarification of its EIP plans and combination of them with its new data plan scheme was much needed. They're the only US carrier to provide this option, and I absolutely agree that it *should* be an option on more carriers. Things have worked this way in Europe for a while now, though as I understand it, the system is significantly more complex (your monthly payment varies greatly depending on the phone you choose).

    However, I don't know that the 'cost' of subsidizing your phone on AT&T, Verizon, or Sprint is 'unknowable' any more than it is still unknowable how much it costs T-Mobile to front you hardware for less than MSRP (the $99 down payment). They're acting as a creditor, and they're still taking the same risk the other big three do in this sense - they might buy a whole pile of handsets they can't sell quickly enough, and end up in the red. Or subscribers might default on repayment. Both of these things, guaranteed, do happen. It doesn't make this proposition any less risky for T-Mobile as a business, and that risk is factored into the cost of your service in some still-unknowable way, even if the amount is probably less.

    T-Mobile has chosen to hedge itself against subscriber loss not by providing a low base rate for its high-end smartphone plan or upgrade freedom, but by offering the lowest down payment possible on desirable handsets. $99 iPhone 5 / HTC One / Galaxy S4 is all people walking into that T-Mobile store are going to care about. Let's not kid ourselves, most people are not concerned enough with the nuances of phone plans and subsidies to care about what T-Mobile's plans really *mean.* Geeks like us care, sure, but John Legere knows full well that his big plan here hinges on the masses flocking to T-Mobile because they'll save $100 today on a high-end phone, pay basically the same as they would on AT&T or VZW monthly, and be satisfied with a mediocre network.... assuming they pass the credit check. And most of those people, like most Americans when given credit, will pay the absolute minimum possible, even when the option to pay more is there.

    For those people, this is still basically a contract: pay a lump sum, reduced every month, or stay locked in until the next upgrade. Verizon and AT&T essentially do the same thing: cancelling service costs less and less with each passing month if you want to upgrade early or change carriers. At around 18 months, T-Mobile does become the better value for an early upgrade or carrier switch ($120 of monthly payments remaining, as opposed to a $145 AT&T ETF or a $170 VZW/Sprint ETF).

    These plans are not a bad thing - I am certainly not saying that. They do offer a little more flexibility if you're a pretty-often-upgrader, and T-Mobile is still a great value if service in your area is consistently reliable (in my area, unfortunately, it is definitely not). But for your Average Joe, I maintain this new system is still basically tantamount to a contract in any practical sense.

    • http://profiles.google.com/cory.simpson Cory Simpson

      I think you could argue it would be financial management to pay more than the minimum on on a T-Mobile interest free loan. Much like many argue you shouldn't pay cash for a car with 0% interest; that money can be invested else where and make you money.

    • Freak4Dell

      I don't understand your complaint. This is a win-win plan. Like you said, it's great for the people who upgrade often. It's also great for people like me who buy their phones for cheaper from other sources and save on the monthly bill. For the people that just pay the minimum amount, there's no change, and they're not losing in any way. In fact, they're still gaining, because even with the minimum payment included, T-Mobile's plans are still cheaper for what you get. That's why people use T-Mobile in the first place. If you can be happy with the network, this is a no-lose plan for you. If the network isn't good for you, then you still lose nothing because T-Mobile wasn't an option for you in the first place. Either way, this is not a contract by any means. It can resemble a contract if you choose to make it resemble a contract, but that's your own doing, not T-Mobile's.

  • leo Finn

    Korea has been doing this for years. You pick your plan and pick your phone. You don't get a lot of minutes or texts but you get unlimited data and they have lte too.

    • paleh0rse

      Most of the world has... the US carriers have always been the exception since most Americans seem to be averse to paying full price for their phone up front. You could do a survey on the streets here and I'd bet that more than 90% of those you speak with will say something ignorant like "my phone only cost me $199, so why would I want to pay $600 for a phone?"...

  • N2fw

    I love where T-Mo has gone, now the next step is selling only unlocked handsets without bloatware

    • Freak4Dell

      I think they're already headed in that direction. They haven't had much bloatware on their phones for some time now, save for some T-Mobile apps (visual voicemail, account management, etc.). I think the phones they sell at full price come unlocked already now, but I'm not sure.

      • jeffrey beck

        They aren't unlocked but after 3 months any one can call and say they need their phone unlocked for international travel and get their phone unlocked for free by customer service.

    • Cuvis

      They're going that way. They sell the unlocked Nexus 4, and they've said they will unlock any phone that isn't under a payment plan upon request. Give them time.

      • N2fw

        I was pretty sure, Nexus 4 on T-Mobile isn't sold completely unaltered. I'm not complaining either way as personally I've been using Nexus S and GNex unlocked for the last 4 years, just saying that a push like that from them may get Sprint to follow suit for LTE based phones after the VoLTE switch. I'd really love to see a unified US standard for wireless bands but I know that's a pipe dream.

  • http://twitter.com/jwyche007 A Deaf Mute

    Android Police GET IT and NO ONE else does, what a shocker! /s

  • Samik Parekh

    This plan is still ripping off5..... Its not true per paid plan ......
    I am from India and in India you pay for what you want to use .... Like I play $10 to buy 500 min of talk time that I can spend in one month period same way if I font need 500 min I csm buy cheaper plan like $5 for 200 min.... And so on. ......
    Also for data plan I can pay $5 for 1 GB data for month and if I am running out I can buy again $5 for another 1 GB for month from that day..... So thats a true freedom....
    And about phone no carrier sell phone you need to buy a phone unlocked....

    • Cuvis

      We have plans like this in the US too... AT&T GoPhone, T-Mobile To Go, TracFone, etc. They're just not that popular outside the lower classes, because if you use your phone much, you end up paying more.

      • Samik Parekh

        Ya I know .... But they should change those plan and make them like I said will be good for all ... ( takeout those 2 or 3 dollar charge per day ) just buy a min that you want and use however you want ...Then no one will go for contract....

        • jeffrey beck

          They have that plan already on Tmobile prepaid. It has been around for 3 years. No one uses it except international travelers and old people.

    • AGWednesday

      You're talking about your minutes and data packages. This has nothing to do with them.

    • jeffrey beck

      You get everything unlimited. What's the problem with that?

  • http://www.facebook.com/nschiwy Nick Schiwy

    THANK YOU THANK YOU THANK YOU ERIC! I was about to write the same exact article yesterday after David was trying to make the argument that having to pay for your phone was the same as having a contract. I realize drawing the similarity between the ETF and the cost of the remainder of your phone because look the same on the surface but the cost of the phone goes away after 24 months and I realize that can be looked at as being the same as the end of contract but it's simply not the same.

  • http://www.facebook.com/green2u Charles Green

    If you go the TMO pre-paid route, you must pay for the phone in its entirety up front. I painfully did so in order to qualify for the $30 100 minutes talk | Unlimited text | First 5GB at up to 4G speeds (http://prepaid-phones.t-mobile.com/prepaid-plans). Also, I had to buy a Note 2 from T-Mo to get their 4G/LTE speeds (none of the Note 2s on the open market can access T-Mo's 4G/LTE) Good news is T-Mo is selling it at a comparable market rate. Based on my savings over my monthly Sprint bill, I will recup my Note 2 cost (inc. tax) in about 20 months. Also, if I am unhappy with T-Mo I am no longer sure what networks will be compatible with their phone besides perhaps Solavei. And I may lose out on LTE.

  • Andrew Houlne

    Wish Verizon did this. I don't want to change my contract and must now buy my own phone to avoid losing the unlimited data. In theory I've been paying for the subsidized phone, and now that the contract period has ended it would be nice if the bill went down... but it will not.

    • utopianh

      Then why the hell don't you change to Sprint or Tmobile?

  • http://twitter.com/Illegal_Machine Illegal Machine

    My issue is with users (like myself) who are still under contract. TMo has always offered plan flexibility. If you feel you pay for too many minutes, or not enough data, just call and get it straightened out.

    Now, all plans that current contracted customers use are discontinued. No changes can be made because the plans don't exist.

    If you want to make any changes, you have to pay a $200 migration fee.

    So I just started a new job and don't need unlimited data because I get no Tmo service in our building. I can't cut my 5gb data plan to 2gb without paying $200 to migrate to the new plans. One week ago it would have been a 5 minute phone call. As a contracted customer, I love the new plans....but I'm not at a point where I can take advantage., so I feel a little left in the cold by Tmo.

  • Matt

    The biggest difference between this and other carriers that makes unlike a contract is that you can keep paying on the phone but disconnect all services for as long as you may want / need. Why/how? You're not under contract!

  • Dan

    Dolla Dolla Bill, Yall.

    Best moment of my entire day! Thanks for a great article. Now, it's time for us to just ignore the folks who don't get it. Other than maybe hide their keyboards when you can.

  • http://www.ronakg.com/ Ronak Gandhi

    People have gotten so much used to this 2 year upgrade cycle for devices that they don't realize the real difference is once your contract is over. Not everyone upgrades their phone every 2 years. With t-mobile, you stop paying for the phone post 2 years but the big 3 keep charging you the same price even after 2 years.

    If your phone is working perfectly fine after 2 years, there is no reason to buy another phone. Just keep using your iPhone 5 or GS III with lower monthly bills. With t-mobile, now you have this CHOICE. With big 3, you are forced to upgrade every 2 years and they've minted millions of dollars because people delay the upgrade for one or other reason (to wait for a particular device or forget about contract being over etc).

    I hope people slowly realize that the T-mobile plans are way cheaper when you consider long term (like 5 years). And especially with devices like Nexus 4 becoming more and more popular, I hope the big 3 will be forced to come up with similar plans (current unlocked retail prices for flagship phones are inflated anyways to make the contracts look lucrative).

    • xnifex

      But there are people like me that already have a decently low rate that didn't mind the 2 year commitment because I had a very low rate in the first place. With the "contract pricing" i just got a cheap phone & still kept my lower rate.

      • jeffrey beck

        Most carriers require you to change out of old cheaper plans now to get new devices though.

  • Ryan

    Will they unlock the device, once it is paid off?

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      Yes.

  • http://www.facebook.com/profile.php?id=1203700122 Andrew Hannaford

    This is simple, its just like the Tab canadian carriers have had for a while now

  • Eric Jones

    All of this could be solved if they would make a Nexus phone that supported all bands, including LTE, on all carriers. I'm looking forward to the Qualcom's global LTE chip showing up in phones. Would be even better if it was dual SIM as well.

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      That's part of the solution, but it by no means solves everything. The contract system is still a huge mess. Buying a Nexus with universal bands for, say, Verizon would still result in you locked in for 2 years no matter what you want to do. T-Mobile is now almost completely prepared for the days when universal band support comes to phones in terms of plan structure, but the other carriers need to step up, too.

      • Freak4Dell

        Actually, with Verizon and AT&T, you would not be locked in if you bought the phone for full price or purchased it from a 3rd party retailer. However, you do still pay the same monthly prices as those who do take advantage of subsidies. With Sprint, you are required to pay the same prices, but also you are required to sign a contract. It's one of those asinine Sprint policies. Once LTE becomes the main backbone of the networks, you should be able to switch between every network other than Sprint as you wish. You will just pay a lot less on T-Mobile is all.

        • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

          Well, I suppose I should clarify that I'm imagining a hypothetical where you're buying a Nexus device directly from Verizon, much like the Gnex. The broader point is that making a phone support all bands does not, itself, solve the problem unless everyone buys their phones for full price. That's all I meant.

          • Freak4Dell

            Very true, but making a phone support all bands would at least help out those of us who do pay full price for phones, and it would reduce manufacturing and inventory costs for the manufacturers. Hence Apple switching to a world phone format when they added Verizon. They don't have to manufacture different hardware for Verizon, but rather, just put different software on it. This also lowers refurbishing costs. They're having to make a new one for T-Mobile that has AWS bands, but I suspect they'll go back to one version for everybody with the next iteration.

            I think it will be a while before we see all phones starting to support all bands, especially since as long as the CDMA networks are active, manufacturers are going to have to deal with Verizon and Sprint's proprietary radio software, but I do hope we start seeing those phones at some point in the future.

          • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

            Agreed. It's a multi-pronged approach and we're getting closer and closer. Voice over LTE, 40-band radios, and the death of shitty contracts (like what T-Mo has done here) can't come soon enough.

      • Eric Jones

        Only if I bought it from Verizon. If I bought it subsidized (or discounted, however you want to say it) on the Play Store like the current Nexus, then there's no contract. I don't know if Verizon and Sprint will ever make it easy for other's phones to work on their network. You'd think they'd want competitors customers that already own a phone coming over to pay them money every month. Problem is, if the customers can come, they can leave. I think the biggest issue is that wireless carriers don't want to make you stay because they have the best prices and the best network, they want you to pay as much as possible without you even having a choice. That's why they all offer free calling to people in the same network and contracts. They look at cable internet providers, and get jealous that most people have no choice and have to either pay high prices for crap, or go without.

    • paleh0rse
  • http://twitter.com/wade_county John P

    T-Mobile is a stone away from being a prepaid carrier. Whats wrong with that? If you were to ask people to name prepaid carriers, they'll say Boost, MetroPCS, maybe Virgin. T-Mobile shouldn't have to tell people to pay upfront for their devices, just cut the cost in half of their monthly bill to rival the competition. T-Mobile should emphasize on BYOD to their network IMO, and then the Nexus phones will get more attention.

  • M42

    It is a scam. You leave T-Horrible, you still have to pay the balance owed on the phone. You leave the other carrier you pay a termination fee, which is likely less than what you will owe T-Horrible unless you've been making payments for a long time. Bottom line it's the same difference. All they're doing is more sleight of hand b.s. that they're so good at. This reminds me of another one of their big sleight of hands moves last year when they announced they were spending billions to "upgrade" their networks, when in fact all they did was move their scarce 4G from 1700 MHZ to 1900 MHZ to get ready for the iPhone. In other words, they simply moved the pea from one shell to another one all the while making you think they were undergoing a major upgrade. Anybody who is a current customer knows that unless you are in a big city you're going to be on EDGE. There ain't no free lunches and with T-Horrible, you get exactly what you pay for. Oh, and did I mention that their customer service jobs are all outsourced overseas to some country where they don't speak English.

    • jeffrey beck

      Bitter does not begin to describe you my friend. I can recommend a good therapist.

    • paleh0rse

      I see that you have reading comprehension issues. Ever thought of going back to school for a GED?

      I'll try one more time to explain this entire concept to you: T-Mobile's new plans are easily the most transparent and honest wireless plans in the US -- they are now the only carrier that DOESN'T pull a slight-of-hand by hiding the actual cost of your phone somewhere in the monthly rates. With their new plans, you know EXACTLY what you're paying for your phones, and said costs are completely separate from the subsequently lower monthly rate plans.

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      I'm still honestly just plain shocked that people think paying for their phones is "sleight of hand bullshit."

      I mean seriously. Just pay for your phone and you're not bound to anything.

      • paleh0rse

        Are you really?! There are people in Los Angeles who believe they live directly next to the Atlantic Ocean, so that level of ignorance no longer surprises me.

  • Stocklone

    Thank you for writing this.

    • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

      You're welcome.

  • Elias

    Brazil has these mixed systems. Some carriers will "give" you a free phone when you renew your contract (the more expensive the contract, the more expensive the phone). The funny part is they often offer the same plan without a phone, so you can calculate how much the phone costs to you. And if you're gonna buy a prepaid phone, you have to bring your own device or pay the full price (which is usually just a bit more than you would pay in the long run). Aftermath: they give you a small discount on the phone in exchange for your loyalty, if you choose to be on contract, but the phone is never free. They gotta make money. If it's not on the plan, it will be on the device, but it's often in both.

  • http://www.facebook.com/keithbbarnes Keith Barnes

    I think this is the way it should be. Google is already selling its Nexus phones contract free and unlocked. Also Sony has announced plans to sell its new Xperia phone direct. Cell phone manufactures are going to be forced go down on price with all the competition and with the ability to get a good cellular service without a contract is going to be a big plus for consumers. Its a win win for the consumer.....

  • http://4LadyDi.blogpsot.com/ Lady Di

    "You may pay any extra amount at any time on My T-Mobile, through Customer Care, or at a Retail store."

    I've been on T-Mo since 2009. As for the installment plan on phones, it was a pay all of it off or nothing deal. You called in, told them you wanted to pay the phone off and then they would bill you the entire balance sometime in 2 -3 billing periods after your initial phone pay off call. No pay a little more on it a month at all other than the preset amount at time of purchase. If this is changing, it would be awesome for me.

    • kenjab

      I believe this has changed. I have a Value Plan since Nov 2011, and now when I go the billing portion of the My T-Mobile site, I now see how much I owe on my EIPs, along with a link to "Make a Payment" towards it. And I agree that it's awesome to have that as an option now.

      • http://4LadyDi.blogpsot.com/ Lady Di

        I'll look into it when I remember and/or get a chance. What a welcomed addition to greater service with T-Mo is being able to pay this expensive phone off when I want and not when THEY want me to. YAY!!

  • Josh Michielsen

    We have something "sort of" like this in Australia. Basically we have mobile phone contracts where we're given a phone for free (or a small monthly fee, depending on the phone), and if we wish to get a new phone we simply pay off the "remaining cost" of the phone we are currently using (free phones are calculated at $10 a month), we DO have to re-contract once we receive the new phone though.

  • jeffrey beck

    Great article. Thanks for being the one writer who gets why this is great.

  • Luisito Mercado

    Very good article! Just one question, if I am already paying for a phone (let's say, $20/month for an htc one) and 8 months later, a new device drops on t-mobile and I want to stop paying for the one and start paying for that other phone, do I have to finish paying for the one and then pay another $100 up front and continue paying whatever it is monthly for that new phone? Or how would I go about it?

    • paleh0rse

      From what I understand, you can pay for them simultaneously simply by adding the new phone. You'll end up paying $100 down and an additional $20 minimum a month (2 x $20 for both phones until each is paid off separately).

      There may be a cap for the number of phones you can do this for, simultaneously, but they haven't mentioned one. I imagine it's simply a matter of credit since each and every financed phone requires a fresh credit check?

  • crankerchick

    Just to be nitpicky, an "interest-free loan" IS still a contract. It's a contract wherein the buyer agrees to pay a given amount for a given amount of time. There are terms and conditions. It is a contract, that the buyer will purchase said phone from T-Mobile and pay it off over the course of 24 months at the minimum, or sooner if so desired, but at a minimum monthly payment of established amount. That IS a contract. It' just not the SAME contract that the other carriers shackle buyers with. I love your writing Eric, and I agree that it IS different, but to say it is not a contract is to ignore the dictionary.

    That said, the other writers who maintain that it isn't different are idiots. It mostly certainly is different. it's just a different contract.

  • Bob

    If I could do this with the $30 plan, I'd have a Note 2 in about twenty minutes!

  • dgarra

    The money saved doesn't seem worth it for this new configuration. Pro: The Nexus 4 works great on T-mobile, Con: T-mobile still sucks, especially for the amount of money they want.

  • Sharon

    Ok im trying to buy an iphone 4s. For the 2 year contract it's $49.99. Do I have to keep paying $49.99 every month? I'm still confused.

  • Maryamg81

    Why did i go to the store to purchase the new htc one for me and my husband and they ran a credit check to see if im eligible for the down payment plan. i have good credit and they rejected me. kind of a scam i would say. then i asked the lady for a copy of my credit check and she refused.

  • Guest

    Really great article but there's only one thing that you forgot to mention: those with insufficient credit history (not necessarily bad credit - simply people [like college students per say] that don't make enough money to get mortgages, car leases, etc. but can still afford 90/month phone payment plans) or bad credit are pretty much out of luck. To get you hooked in T-mobile might offer reasonably low down payments on the phone (even if you have low credit), but after you pay your phone balance in full, the next down payment for the next phone will be considerably higher (way more than $200 for latest gen. phones like HTC One, GS4, Xperia Z, etc.). To me that's not all "fairness and equality" and "honesty like they're trying to advertise with their "$0 down payment" ads.

  • screwed

    I'm a tmobile customer with three lines, 2 of which are still under contract. Now the third line I was kind of excited because I was ready to upgrade, but lo and behold, I cant? And I want to go to another carrier now that everything is no contract..Nope I was told I would still have to pay 400 dollars to get off of my contracts. Matter of fact that make it hard for me to even change my plan without a large migration fee. So I feel like a 7 plus year customer is getting screwed and the newer people are getting somewhat of a deal.

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    Hello, My name is Tammy and my wonderful husband's name is Shane. We've been married just over 10 years. We've been ttc for the past 9 years with no luck. We've now decided that adoption is the right option for us. We've been looking into the process over the past year or so. We're not a wealthy family but we have more than enough love to make up for it. We live in a small town in Ohio, We're actually hoping to do an adoption through the birth parent/parents that way the money spent can be put directly towards things for the child rather than wasted on pricey legal fees eat. So my question is, Where do we start? Who should we contact? I can be reached via e-mail [email protected] or call +2348163974382 Thanks and god bless.

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