With T-Mobile and AT&T announcing their new plans, I thought it would be wise to talk about plans, prices and unlocked devices. Stay with me if you want to read about how these plans really work and what are you actually paying.
T-Mobile has a new plan called "Jump" that allows you to upgrade your phone twice a year, with no contract attached to it, and all you have to do is pay a little more every month. A week after that AT&T presented its Next plan which offers the option to make an upgrade every year instead of the regular two years.
Of the two plans, Next makes even less sense when you do the math, because the plans remain the same price as always, but on top of that you're paying the price of an unlocked device over the course of two years. T-Mobile CEO John Legere took advantage of this situation to go for AT&T's throat with a pretty direct tweet:
"Did AT&t really just start charging full price for devices without discounting their rate plans? OMG. Really? #asktheschoolkids"
But don't think for a moment than T-Mobile's plan is paradise, you're still paying a fee to enter the plan, which could be as high as $150 and then a monthly fee to be in the plan and an extra price that goes into your next phone, that seems like a lot of money just to participate in a plan that supposedly helps you save money, right?
Both plans are based on the same idea, you pay some money upfront, then a monthly fee, and you can upgrade your phone more often. The final price is about the same as buying an unlocked device, so what's actually wrong with these plans? Simple actually, on AT&T you end up paying almost double the price of the unlocked device (Next fees + your plan, which has the same value than it did before which includes a phone subsidy) and on T-Mobile you have to return your device to the carrier, so you actually paid the price of an unlocked device, but you don't own it.
Turns out these plans are not so great after all, uh?
So what's the alternative? It's the same alternative most tech journalist have been recommending for years, buy an unlocked device and go for contract-free plans which have smaller rates than those with subsidies. And after two years, if you want to make the comparison to current contracts, you are actually paying less money and you have the device all for yourself to resell and earn some money back. I know that it's hard to pay prices around the $600 mark upfront, but if you can get that money, you're actually saving money in the end, there's no weird math to it.
Americans have a history of not going for unlocked devices and sticking to 2-year contracts, but it's time for everyone to start thinking not only with their brains but also with their wallets, the carriers have an amazing marketing machine working 24/7 to get people thinking they're helping them save money, while doing the exact opposite. T-Mobile's Jump might be a bit better because by going contract-free, there's one less hoop for customers to jump through, but even then, there's no better option than buying an unlocked device, and on top of all of this, you're getting an even broader range of devices to choose from. If you want to take this one step further, you're getting a phone with no bloatware at all, so you're getting more storage space on it than the carrier versions.
Here's my proposal: buy an unlocked device and leave the carriers to be nothing more than pipes, as they should. That will save you money in the short run, but in the long run, it will make carriers compete with the only thing left to them, prices and speed, so you'll also get a better service. Everybody wins, or at least the customers do, and that's what's important.