T-Mobile became the last major U.S. cell company to officially support the iPhone today, and they appear to have come up with a pretty sweet deal.
Typically, every cell phone from every carrier is sold at a subsidized price. The catch is that you have to sign up for a two year contract with the carrier, and they will charge you an early termination fee if you cancel before the two years are up. For example, you can get an iPhone 5 from AT&T, Verizon, or Sprint for $199 with a two year contract. The phone you get will also be locked in such a way that you can never, ever use it on another carrier’s network. You can buy an un-subsidized, unlocked, contract-free iPhone 5 directly from Apple, but it will cost you $650. Of course, you’re paying the carrier that much over time, as part of your contract.
T-Mobile has decided to go in a slightly different direction. The phone itself is being financed separately. An iPhone 5 costs $100 up front, with 24 monthly payments of $20. This is not part of a cell service contract, and the phone is unlocked. It’s basically just a credit agreement between you and T-Mobile. Again, this is just to buy the iPhone 5 with no cell service. The payments total $580, which is $70 less than an unlocked iPhone from Apple. I couldn’t find any notes on paying the phone off early (although why not?) I did find one note that claimed the balance would have to be paid off if you left T-Mobile before the phone was paid for.
So that’s the phone half of the equation. How about the cell plan? Well, it’s pretty nice, as American cell plans go. First and most importantly, there is not contract! It’s month to month. $50 gets you unlimited talk, text, and 500MB of data on the 4G network. If you go over 500 MB, they throttle you down to the 3G network. They do NOT charge you more money! You can add a second line for $30 per month, and extra lines above that for $10 per month.
If 500MB isn’t enough for you, for an additional $10 per line you get 2Gigs of 4G data before throttling. Or you can spend $20 per line and get unlimited data.
Why would you want unlimited data? Well, T-Mobile is offering some iPhone 5 features that other U.S. carriers have been pretty stingy with. For example, you can use your iPhone 5 as a cellular WiFi hotspot, connecting your computers to the internet through your phone.
While I couldn’t find concrete confirmation, one would expect T-Mobile to allow Facetime over Cellular, which means that you’ve got a freakin’ videophone in your freakin’ hand, and now we just need jetpacks and robot maids, and we’re good.
And unlike Sprint and Verizon (but like AT&T,) T-Mobile uses a frequency that allows you to talk and use data at the same time. So you can be on the phone and looking at a map at the same time, for example.
T-Mobile also has something called “HD Voice,” which uses a little more bandwidth to transmit phone calls, resulting in a clearer sound. But it only works if both callers are on T-Mobile.
T-Mobile’s 4G network is mostly using an older mode called HSPA+ as opposed to the newer LTE. Both are much faster than the old 3G networks, but LTE is much, MUCH faster. T-Mobile is busy switching their network over to LTE, and they claim that they’ll have the majority of the country done by the end of the year. The iPhone 5, by the way, can handle either network.
Oh yeah, one other thing: You MUST buy an iPhone 5 specifically enabled for T-Mobile’s network. You’ll be able to use your new phone on other networks, but you cannot use an old phone on this new network. Something about firmware or something. Bits. You know how it is.
The iPhone 5 is pretty kick-ass, and this is the first U.S. carrier to take full advantage of its features, and at a (for the U.S.) reasonable price. This all becomes available on April 12. If your contract is up, I’d give it a good hard look.
For me, well, I’m 1 year into a 2 year Verizon contract. I’m going to wait until June and see if the rumor mill solidifies around a new iPhone. By fall, I expect that I’ll eat Verizon’s early termination fee and move to T-Mobile with either an iPhone 5 or iPhone Whatever.