Should you buy a subsidized or unsubsidized cell phone?
In the days in which everyone has a cell phone, prices are just getting higher and higher when you compare them to what they used to be in the past. Companies have been increasingly pushing their "shared" plans in which, if you are an individual, it really doesn't make sense to pay a higher price. However, providers still think this is the "best" for the consumer.
In recent news, T-Mobile USA has announced that they will end subsidized phones. What does this mean for you, the consumer?
If you want to purchase a new phone, you'll have to pay full price for it. That means that no phone will be cheap at $199 or below. The factor is do you think you want to spend that kind of money upfront?
Here's how it works:
1. Pay for the phone at an unsubsidized cost (full price), which could be anywhere from $500-$800 depending on the handset.
2. In lieu of the higher payment, T-Mobile has introduced their Value plans which are generally less expensive per month (because you're paying full price for the phone upfront).
3. Depending on the plan, you can pay the full unsubsidized cost of the phone upfront, or you can pay for it in monthly installments.
As you can see, there are options to make your bill lower instead of paying the huge upfront cost. But does this really benefit the consumer compared to other providers who still offer subsidized phones? Let's make a comparison.
Comparison of T-Mobiles Value vs. Classic Plan
Plan Cost (per month)
2-year commitment cost (service + device)
Unlimited Value Talk+Text
Difference saved with Value plan
As you can see from the comparison, you actually save money by going on the unsubsidized Value plan with T-Mobile. Many people think they save when getting a discounted phone. This is not the case. As you can clearly see, the device cost upfront is high, but you do get a lower monthly rate as compared to Classic plan. In the end, it's very close. And can be even thought of a "negligible." Ultimately, you're essentially spending the same amount of money, it's just the cost of the phone that is changing. Do you want to pay a higher price now? That's the basic decision consumers must choose and face.
In conclusion, other providers may (or many not!) follow T-Mobile's unsubsidized cell phone structure. We'll just have to wait and see.