Monday, April 01, 2013

The T-Mobile- How Free is Free?

Cellular phone companies have people by the throat and they know it. A cellphone is a modern necessity. Finding where you are, where your friends and family are at, what the closest and best places are in a finger press are now taken for granted. People of an older generation talk of things called maps and phone books as ways to get information, but no one I know believes these things ever existed.

So now you're trapped into a cellular prison of your own making, and your options are narrowing. The horse race for your cell dollar is pretty much between Verizon or AT&T. As all the others are squeezed out of the field, by the simple fact they don’t have the coverage areas or money to give you all you want for less like the big boys. But then there are those that seem themselves as upstarts, and one that has begun an intriguing gallop for third place is T-Mobile.

T-Mobile is known mostly as the Chicago network. They have Roseland to Rogers Park covered like the melancholy that takes over the town when Derrick Rose gets a hang nail. But they slowly began to branch out all over and now they have come up with a plan that they think will rival the big boys. The contract-less cell phone plan. Now everyone knows how most plans go, you get a two year deal and in exchange you get a free or reduced cost phone. But if you don’t like your carrier or your cellphone you are up the creek. T-Mobile wants to give you complete freedom to do what you want with your phone where you want to. But just like anything “free”, it comes with a price.

The biggest diff is that you have to pay full price for your phone. Now most may say, no problem, cell phones are at most like what $100? People spend that much getting a latte and a gallon of gas. But what many don’t know is that without your cell phone carriers “subsidies” you can pay upwards of $600 for your phone. Now if that doesn’t stop your heart, remember after you pay that you still have to pay for service which is about $100 with data and voice combined.  But you can bail at anytime. Which for some maybe worth it.

The model that T-Mobile seems to be following is the same that car dealers use to get into that 2014 Fiat. You can pay full price or a strong down payment upfront and get everything, or you can slowly pay it off. Either way at any point you can walk away once you have fulfilled your obligation. Giving you flip or stay as often as you want without much changing. Which for some people would be very attractive. But there are still some downsides.

Most people do not have $800 lying around to make a cellphone purchase. And paying it off monthly doesn’t sound much different than what people are doing now. Also T-Mobile’s coverage is better than it was, but it still isn’t the behemoth that Verizon or AT&T are. So the money you save on your “free” plan may evaporate in roaming fees and non-service areas.  

So at the end of the day, T-Mobile is trying to explore new ground in hopes of taking the cellphone industry by storm. But they still have some more excavating to do. They know that there is gold in them there hills, for whoever can crack the stranglehold of the big bads of the wireless community. They aren't quite there yet, but hopefully this is a step in the right direction.