T-Mobile is the first major U.S. carrier forging the way towards non-contract service, unveiling its new plan that doesn’t require a two-year agreement and won’t include the extra cost associated with traditional phone subsidies. These new terms replace T-Mobile’s previous two-year contract requirements, freeing users from lengthy commitments. Similar plans are already available through smaller carrier services, such as MetroPCS and Cricket Mobile, but this is the first time a major U.S. carrier is offering these same deals.
The base cost of this new plan includes unlimited voice minutes and text messages with an allowance of up to 500 MB for data, including HotSpot data tethering. Rather than charging large overage fees once this data cap is met, data is simply throttled for the remainder of the billing cycle, eliminating surprise charges on monthly bills. Adding $10 to the monthly base charge bumpes the data allowance up to 2 GB, also including tethering, and $10 more a month provides unlimited data, with a cap of 500 MB of device tethering. This brings the monthly total to $70 for unlimited talk, text, and data.
The plan can also be upgraded to include additional family members, $30 a month for the first and $10 for each additional person, each month.
Unlike traditional plans with AT&T, Verizon and Sprint, T-Mobile users must already own a phone to take advantage of this service. Customers who want a new plan, however, can purchase their device from T-Mobile at full price, either paying the total up front or splitting the payments across a separate 24-month payment plan. For example, the Samsung Galaxy S III costs either $549.99 at checkout, or can be purchased for a $69.99 upfront charge followed by a $20 per month charge for 24 months, totaling the price of the phone with no interest added.
The downside is that T-Mobile hasn’t yet launched 4G LTE anywhere and, even when it does it could take a while to cover all the major markets.
The upfront cost of the new T-Mobile plan, when purchased alongside a new smartphone, may cost more than other carriers depending on the selected model of smartphone. But users will most likely be saving money over the course of two years. Users who feel trapped when locked into two-year contracts may find a solution with these new plans.