Is My Cellphone Plan Better Than Yours?

By Carlos Portocarrero

nexus one phone

A month ago I thought my contract with T-Mobile was up, so I called them up to see why I couldn’t upgrade to a new phone on their website.

I had been obsessing over buying a new phone and I was finally ready to pull the trigger.

Here’s what they said:

Sir, you aren’t on a contract. You haven’t been for months. You’re on a contract-free plan that doesn’t feature any handset upgrades. Good day.

In other words, no phone for you.

Seeing as how I had been counting down the days until my contract was finally over so I could get a new phone, I was surprised. And I was pissed off.

My Mysterious Cellphone Plan

Turns out I had changed my phone plan months ago without reading the fine print. Here’s what my plan consisted of:

500 minutes per month
Unlimited data
Unlimited Texts
No contract
No phone upgrades

The plan is called Even More Plus and T-Mobile recently (and quietly) took it off their website. Which leads me to believe it’s either a really good deal for customers or people just don’t know/care about it other than the morons who accidentally stumbled into it.

Why This is All Moderately Interesting

Here’s what makes this plan so unique: you pay less on a per-month basis and in exchange you give up those “generous” phone subsidies.

In other words, I have the same amount of minutes and texts and all that as the “regular plan,” but I pay $20 less per month. So basically T-Mobile is saying, “We will give you a monthly $20 discount on your bill if you pay for your own phone. Oh and we’ll also let you leave whenever you want—no contract.”

The downside is that, when I want to buy a new phone, I have to pay retail.

Which for a smartphone will run you over $500.

Which sucks.

Math Time

It’s simple math. Let’s look at what each plan costs over a two-year span (assuming you already have a phone):

My plan: $59 * 24 months = $1,416

Regular plan: $79 * 24 months = $1,896

Pretty simple, right? My plan kicks ass to the tune of $480.

But after two years the regular plan will get a subsidy when the person upgrades their phone. Instead of paying over $500 for a phone, they’ll pay around $199. The carrier is essentially “giving” you $330.

Back to the math:

My plan: $1,416 + new phone = ?

Regular plan: $1,896 – $350 (new phone) = $1,546

And this is assuming you upgrade after 24 months. For every month that I delay my upgrade, the gap between the two plans widens by $20. So if I go three years with the same phone, my plan just got $240 cheaper.

So Which is Better?

The math shows that my plan is better, but it doesn’t account for how much money I will have to spend if/when I decide to buy a new phone. And it also doesn’t factor in the monetary value of not being in a contract.

I can leave whenever I want (which I like), but then I’m leaving this plan because no one else has anything like it that I know of. And it’s the cheapest plan I’ve ever seen for a smartphone.

I’m curious to hear what other people out there think: is this a good deal?

Would you rather pay less on a per-month basis and in exchange give up your privilege to upgrade to a new phone every two years at a discounted rate?

Image by pittaya

The Writers Coin