Tablets With Data Plans: Just Say No

At a time when consumers are drowning in recurring fees for services they can’t afford, wireless carriers have been looking for another way to make you spend money you don’t have to on something you don’t need: a tablet with its own monthly data plan. Just say no.

It’s easy to see why carriers would want to lock you in. In business there’s nothing like a steady revenue stream and nothing steadier than a two-year mobile broadband contract (complete with sky-high termination fees). A tablet contact gives your carrier a chance to either double-dip you by tying you down with two different contracts or to attract new customers who already have phones on a competitor’s network. 

Unfortunately for them, there’s no good reason for consumers to bite. These days most people who are shopping for tablets already have a smartphone, because phones go with you everywhere and make phone calls. Asking these same consumers to pay a second time for 4G on their tablets is like making you pay separately for home Internet for each of your family’s computers, something ISPs tried at one point without success. When you consider that most users have reliable Wi-Fi at home, at work, at the coffee shop, and even on airplanes, it’s even harder to justify signing a two-year contract, just to get your tablet online from the one park in town without it. 

Even worse, the tablet market is so new and changing so rapidly that making a two-year commitment today is like promising to date your first high school girlfriend until graduation, even though you’re only at the beginning of freshman year. Six months from now, all your friends will be dating cheerleaders with quad-core processors and 1440p displays while you’ve still got 18 months left with single-core Jenny and her 1280 x 800 face. If you spend $400 to $500 on a tablet today, you can always give it to a relative when something better comes out next year, but not if you’re tied down by a long-term contract.

A new study shows that most consumers are too smart to fall into this trap. According to NPD, only 65 percent of consumers have ever used their tablets to connect to 3G/4G networks. What about the other 35 percent? There’s no breakdown available showing how many of these are users on two-year contracts, but I’d wager that 90 percent of that 35 percent are iPad 3G owners, since the iPad allows users to buy mobile broadband at rates as low as $15 a month, without a long-term commitment. 

Unfortunately, carriers don’t seem to have gotten the memo, as they continue trying to hook users onto long-term tablet data plans. Because the concept doesn’t sell itself, they’ve tried a couple of lame tactics to fool you: model exclusivity and payments over time. The concept of model exclusivity, selling a tablet only with 3G/4G and only through the carriers, goes back to at least the original Galaxy Tab, which didn’t become available in a Wi-Fi version until months after it had launched on Verizon, Sprint, and T-Mobile.  

This fall, the HTC Jetstream and T-Mobile Springboard never came out in Wi-Fi-only versions and probably never will. And this December’s new Verizon exclusive is the Motorola Xyboard, a sequel to the Xoom that you can only buy for an arm and a leg. 

If you want the new Motorola Droid Xyboard 10.1, a lightweight Android tablet with the best speakers I’ve ever heard on a slate, you simply cannot purchase it with Wi-Fi only. To own this slate, you have to pay anywhere from $1,449 to  $2,649 over 24 months, the total cost when when you combine the $529 to $729 device price with the compulsory 4G data plan. If you’re not fit to be tied to a contract, Verizon will sell you the Xyboard 10.1 for just $699 for the 16GB version, a mere $200 more than the entry-level iPad 2 and the quad-core ASUS Eee Pad Transformer Prime, our favorite Android tablet.  

If the price of these carrier-exclusive slates seems prohibitive, T-Mobile’s developed another way to troll for suckers, the Equipment Installment Plan. To the ignorant eye, the carrier’s 7-inch SpringBoard tablet looks like a bargain at just $179. However, should you buy the device, there’s another 20 monthly payments of $10 apiece for the hardware, on top of the $20 to $60 a month data plan. For those as bad at math as T-Mobile hopes you are, that’s a $379 tablet with a minimum $480 commitment for data.  Pay no attention to the better-looking  Toshiba Thrive 7-inch you can get for one $379 payment, the much-cheaper Kindle Fire that’s $199, or the blazing-fast $499 Eee Pad Transformer Prime.

A Wi-Fi-only tablet offers you the best combination of value and flexibility. If you truly need mobile broadband on your slate, you are far better off paying for tethering on your phone. If your phone doesn’t support tethering or doesn’t do it well, I recommend connecting the tablet to a mobile hotspot device such as the Verizon Wireless LTE Mobile Hotspot MiFI 4510L, because at least the hotspot will still be useful two years from now when the tablet’s sitting in a closet somewhere.

At some point in 2012, carriers such as Verizon will start introducing more consumer-friendly data plans that cover multiple devices for one price. At this point, we have no idea whether these plans will be a good deal. For now, though, my advice is simple: avoid carrier-subsidized tablets at all costs.

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