T-Mobile CEO John Legere announces a no-contract plan called the Simple… (John Moore / Getty Images )
T-Mobile introduced its new no-contract Simple Choice Plan this week, with Chief Executive John Legere boldly telling users that if the service is not good, they can drop it after one month of trying it.
The new plan includes unlimited talk and text and half a gigabyte of high-speed Internet data for $50 a month. Users can choose to pay an additional $10 for a total of 2.5 GB of high-speed data or $20 for unlimited high-speed usage. Adding a second line costs $30, and each line after that costs $10.
Although T-Mobile says there are no contracts, users must either provide a T-Mobile-compatible smartphone or buy one from the company. Users can pay for their smartphone at full price right off the bat or make a down payment followed by 24 monthly payments.
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So although users can choose to leave the service whenever they want, they'll still be on the hook to finish paying for the phone. In a way, they still have two-year contracts -- or at least contracts that won't go away until they're done paying for their devices.
That made me wonder: How does T-Mobile's Simple Choice Plan compare to similar plans offered by rivals AT&T and Verizon? How do those plans compare if a person gets a top-of-the-line phone, such as the iPhone 5? And is this new plan cheaper than what T-Mobile previously offered? We crunched some numbers, and here's what we found.
Simple Choice Plan vs. previous T-Mobile plans
T-Mobile no longer offers any of its older plans to new customers, but existing customers can keep what they have. For some users, especially those who aren't looking for a data plan, it makes sense not to switch. Other users, particularly heavy Web users, may want to consider the Simple Choice Plan.
Customers using T-Mobile's Classic plan, for example, pay a minimum of $79.99 for unlimited talk, text and 2 GB of high-speed data per month. (Some users pay more to increase the limit so they don't have their connection speeds "throttled" down when they exceed 2 GB.)
In the new Simple Choice Plan, users pay $50 for unlimited talk, text and half a gigabyte of high-speed data. They can add 2 GB of high-speed data for $10, bringing the total amount of data usage to 2.5 GB and total price to $60; or get unlimited data for $20, bringing the total price to $70.
So under the new plan, users can have all the same services, plus unlimited data usage, for $10 less than under the old Classic plan.
Simple Choice Plan vs. AT&T and Verizon
If you take T-Mobile's Simple Choice Plan and compare it to similar offerings by AT&T and Verizon, T-Mobile offers a cheaper monthly price.
At AT&T, an individual user can get unlimited talk and text plus 1 GB of data for $85 a month. Meanwhile at Verizon, an individual can get unlimited talk and text plus 1 GB of data for $90 a month.
With T-Mobile, a user can get unlimited talk, text and data for $70.
If you compare the plans using a family of four as the example, T-Mobile once again wins out. Accounting for four smartphones with 2.5 GB of data each, a family of four will pay T-Mobile $140 a month. If you give each device unlimited data, the price goes up to $180.
At AT&T, the price of having four smartphones on the company's Mobile Share plan with 4 GB shared by all the devices costs $250 a month. Getting 6 GB of shared data, bumps the monthly price to $270. (Users who want even more data can pay for it as well.)
Verizon's Share Everything plan, meanwhile, charges $220 a month to a family with four smartphones and 2 GB of data shared by all. Sharing 4 GB among four smartphones costs $230 a month, and sharing 6 GB costs $240 a month. (Users can also pay Verizon for additional data.)
Simple Choice Plan plus flagship vs. competitors plus flagship
The Simple Choice Plan once again is cheaper than similar offerings at AT&T and Verizon even when you include the price of a top-of-the-line smartphone like the iPhone 5 and add up the monthly service plan costs over the course of two years.
Through T-Mobile, buying an iPhone 5 -- which becomes available from the carrier April 12 -- costs $99.99 plus 24 payments of $20 for a total of $579.99. That means an individual who gets an iPhone 5 from T-Mobile and pays for 2.5 GB of data per month will pay a total of $2,019.99 over two years.
A family who gets four iPhone 5 devices and 2.5 GB of data for each device through T-Mobile will pay $5,679.96 over two years.
Meanwhile, at AT&T, getting a $200 iPhone 5 for one user with unlimited talk, text and 1 GB of data per month will cost $2,240 over two years. A family who gets four iPhone 5 devices from AT&T and shares 4 GB of data will pay $6,800.
At Verizon, an individual can get a $200 iPhone 5 and get unlimited talk, text and 1 GB of data for $2,360 over two years. Over that same amount of time, a family with four iPhone 5 devices who share 2 GB of data will pay Verizon $6,080 over two years. The cost goes up to $6,320 if the family shares 4 GB of data.
Of course, none of these cost comparisons mean much if the network isn't up to par and you don't get a good signal. That should also be a major consideration depending on where you live and work.
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