We Did The Math, And It Turns Out The T-Mobile iPhone 5 Could Save You A Bunch Of Money
But T-Mobile's pricing plans for the iPhone are a bit different from the other three carriers. Instead of paying a flat $200 for the iPhone along with a two-year service contract, T-Mobile will charge you $100 up front for the phone plus an additional $20 per month over 24 months.
So is it worth it?
If all you care about is saving money over your two years with the iPhone 5, then yes. (At least for individuals). You'll save $580 over two years compared to similar plans on Verizon, Sprint, and AT&T.
But there are a few caveats.
Let's break it down.
Assuming your credit is good (yes, there's now a credit check involved if you want to buy a new phone or plan from the carrier), T-Mobile will ask you to pay $100 for the iPhone 5 up front. You're then obligated to pay $20 per month over the next 24 months to pay off the rest of the device.
That means you're paying a total of $580 for your iPhone 5 over two years.
Until you pay off the iPhone, you're device is still locked and will only work on T-Mobile, so you'll need a plan.
T-Mobile's new voice/data/text plans don't force you to sign a contract. You pay month to month and can quit any time.
Here are your options. To keep things simple, we're only going to discuss T-Mobile's individual plans :
- $50 per month gets you unlimited talk and text plus 500 MB of "full speed" data. (That means T-Mobile may slow down your speeds after you pass 500 MB of data in a billing period.)
- $60 per month gets you unlimited talk and text plus 2 GB of "full speed" data.
- $70 per month gets you unlimited talk and text plus unlimited "full speed" data.
How does that compare to other carriers?
Sprint, Verizon, and AT&T each sell the iPhone 5 for a flat $200 if you sign up for a two-year service contract.
However, those carriers' plans are a bit more expensive than T-Mobile's.
Below we have the total cost of owning an iPhone 5 over two years with a plan that offers similar benefits as T-Mobile's $60 monthly plan listed above. This includes the $200 cost of the iPhone.
- Verizon: $2,600 (With unlimited talk and text plus 2 GB of monthly data)
- AT&T: $2,600 (With unlimited talk and text plus 3 GB of monthly data)
- Sprint: $2,849 (With unlimited talk, text, and data) or $2,600 (With 900 minutes talk time, unlimited text, and unlimited data) or $2,120 (With 450 minutes talk time, unlimited text, and unlimited data)
Now compare that to the $2,020 two-year cost of owning an iPhone 5 on T-Mobile. You're saving $580 in most cases. (Sprint comes close with its 450 minute plan, but keep in mind you still get unlimited minutes with T-Mobile. If you talk a lot on your phone, you're still getting a better deal with T-Mobile.)
Now for the caveats
T-Mobile's network is a bit behind AT&T and Verizon's. Starting today, T-Mobile only offers LTE in seven cities. Verizon and AT&T offer LTE in just about every major city. (Verizon has the largest LTE network.) Sprint's LTE network is live in approximately 50 cities.
On the other hand, T-Mobile does have a large HSPA+ network, a type of 4G network that can at times be just as fast as LTE. The T-Mobile iPhone 5 will use this HSPA+ network when LTE isn't available.
And just to reiterate, we're comparing individual plans here. Things get really tricky and nuanced once you get into family plans, shared data plans, etc.
You're getting the iPhone 5 at a cheaper price with T-Mobile, but depending on where you live, you may not get the best service.
Sprint comes the closest, and if you don't do a lot of talking on your phone, it's $80 per month plan for the iPhone is a good alternative to T-Mobile's plan.