Switching iPhone(s) from AT&T to T-Mobile

Premise

I have been an AT&T customer for more than 8 years (from the time it was Cingular). My first iPhone was an iPhone 3G and then a 3GS, followed by 4S and finally an iPhone 5. However I was never too happy with AT&T's service plans. I was allowed once to upgrade from an iPhone 3 after 1 year of my contract for a partial upgrade price to iPhone 3GS. But then I was told that I was allowed early upgrade only once in every two upgrade cycle. Recently AT&T modified the upgrade policy further that prevented me from upgrading to iPhone 5S unless my two years  of the contract was over (previously it was 18 months). This was the tipping point for me, frankly. 

I understand the fact that the iPhone costs $200 after subsidy by AT&T and I have to pay them back the reminder of around $450 over the period of next two years of my contract. But the fact was that even if I had an un-subsidized iPhone, my service price was not any cheaper, until recently, thanks to the competition from T-Mobile's JUMP plan. So irrespective of if I bought an iPhone from AT&T for $200 or $400 (partial upgrade) or $650 (un-subsidized), my monthly plan pricing was the same. What sort of a trick was this to steal customer money! However since all the networks in US had the same plan, I had no choice but to stay put and endure this craziness. When I was growing up in India, the phone and the plan were different. You buy your own phone and pay for the service. Sometimes the carrier might discount a particular phone, but that would have no bearing on my service fees. This is how it should be if the carriers are not money minded and do not try to steal from their customers. 

Apple iPhone on AT&T or T-Mobile? (Source: Apple.com)

Apple iPhone on AT&T or T-Mobile? (Source: Apple.com)

T-Mobile - the game changer?

T-Mobile recently introduced a bunch of new Smartphone plans that separated the phone and the service plan for the customer. This is how it works. You pay for service (typically $50 for 1GB to $80 for unlimited 4G LTE) and you can either bring your own Smartphone or buy a Smartphone from T-Mobile. If you buy a Smartphone from T-Mobile, say the new iPhone 5S, 16GB for example, then you either pay the entire $650 for the new iPhone upfront and just pay $80 per month for the service or you pay $648/24 = $27 per month on top of the $80 service fee. So for a total of $107 per month, you get unlimited everything and a new iPhone 5S. A comparable plan on AT&T is more expensive, I say comparable because AT&T does not offer unlimited data with any of their plans. For a 6GB data on an individual plan, it costs around $100 per month for the service alone, that is $20 more than T-Mobile's unlimited data. 

So you may ask what happens when iPhone 6 comes out and I want to upgrade to the iPhone 6 on T-Mobile and it has been one year since I bought my iPhone 5S. If I had bought an iPhone 5S and paid for it in full during purchase, I just have to let T-Mobile know that I am buying an iPhone 6 and they will transfer my number to the new phone. That is it. Say I bought the iPhone 5S from them using their installment plan, then in 1 year, I would have paid half of $648 or $27 X 12 = $324 towards my iPhone 5S (no interest will be charge for the installment plan), then I will owe T-Mobile $324 towards my iPhone 5S before I move to the new iPhone 6. Fair and square. Looking at the resale values of iPhones, a year old iPhone 5S can easily be sold for $324 and hence I can move to iPhone 6 after a year at no additional cost (you have to pay sales tax of course)! No early termination fees, no upgrade pricing, no $36 activation fees that AT&T charges me every time I buy a new phone. Note that the 1 year time frame here is only an example, I can upgrade to a new phone anytime, either after 1 month (I will have to pay $621 in this case) or after 23 months (I will just have to $27 in this case). The phone and the service plan are separate and you can even track how much of the phone you have paid off anytime. 

T-Mobile introduced new Smartphone pricing plans, separating out the service fees and the phone's price (Source:T-Mobile.com)

T-Mobile introduced new Smartphone pricing plans, separating out the service fees and the phone's price (Source:T-Mobile.com)

For the JUMPer in you

T-Mobile has an even better plan for fanatics like me who need to have the latest and greatest phones right away and are lazy to sell the old phones on their own, called the JUMP. For an additional $10 a month, you get an option to trade in your Smartphone for half of its price to T-Mobile and upgrade to a newer phone anytime. So say after 10 months of buying the iPhone 5S, I decide to move to iPhone 6, I will have to pay ($648/2) - ($27 X 10) = $54 and trade in my iPhone 5S to T-Mobile to get a brand new iPhone 6, again no extra cost or change in monthly pricing. Obviously the best way to take advantage of JUMP is to keep changing to a new phone every 1 year, hence you will get a new phone every year with no additional one time or monthly cost. However note that you are paying a $10 more per month, so it is technically a premium of $120 per year, but its a choice to make if you are lazy (not to sell your old phone on your own) and if you want to have the latest phone always. This is literally like leasing a Smartphone and upgrading every year.  Another advantage of JUMP is that it comes with its own phone insurance, like Apple Care, actually like Apple Care Plus, as it also covers water damage. AT&T also came up with an 'also ran' plan called NEXT, similar to T-Mobile's JUMP, but is certainly more expensive than T-Mobile and slightly more trickier as well (of course it is... its AT&T!).

Family plans

In both T-Mobile and AT&T, individual plans are more expensive than family plans (as they should be). In T-Mobile if I need two lines, for example, one line with unlimited data and one line with 1GB data and both lines with unlimited talk and text, its a monthly price of $110 plus 2 X $27 (if you buy two new iPhone 5Ss), a total of $154 per month. Again since AT&T has slightly different plans, two lines in AT&T with a mobile share data plan of 6GB with two new iPhone 5Ss comes to around $190 per month! There may be slight differences in this pricing depending on how many months you want to pay off your iPhone in, with AT&T and if or not you choose JUMP plan with T-Mobile. But in conclusion T-Mobile is definitely cheaper than AT&T by $25 - $50 depending on your situation. 

An even better reason to switch 

Finally now is the time to switch as T-Mobile offers to take care of your Early Termination Fees (ETF) that AT&T will charge you if you break an existing contract with them (AT&T also has this by the way). For me it was almost $450 for two lines, that T-Mobile will refund via a VISA cash card. And with that I also have two of my old iPhone 5s that I was using with AT&T that are out of contract and I have to call AT&T to unlock them for me. So after this switch from AT&T to T-Mobile, my monthly price for two new iPhone 5Ss with one line having unlimited data and another with 1GB data and both having unlimited talk and text is $154 (plus tax) and I have two spare iPhone 5s that are at least worth $235 each (according to Gazelle), that I can cash out. In contrast, I was with AT&T with a so called unlimited data (grandfathered from my iPhone 3G days) that was throttled terribly after 5GB per month of usage with 450 minutes per month and no text plan and all this for $150 per month for two lines. So for me switching to T-Mobile was a blessing, at least financially. 

Miscellaneous stuff

T-Mobile has other small advantages over AT&T, like free roaming, texts and data, Internationally! You will be charged only for phone calls at some 10c per minute when you are roaming Internationally. Also since my house always has had terrible reception, I wanted a signal booster (AT&T calls it MyCell), but I had to pay $200 for it as if bad reception in the heart of City was my fault. I however called up customer care later and after a yelling match for about 20 minutes, I convinced a customer care manager to credit me the $200 back. It always is the case with AT&T, nothing is straight forward, it just felt gimmicky and dishonest. With T-Mobile I of course had the same bad reception issue at my house. All I had to do was call up customer care and after 5 minutes I was getting a signal booster for free (that I have to return when I quit T-Mobile). Another advantage with T-Mobile is that the unlimited data plan also allows up to 2.5GB of tethering per month at no additional cost. With AT&T I was told that I was supposed to forgo my unlimited data plan (and move to some 5GB data plan for a horrendous amount of monthly charge) if I wanted tethering and I chose to stick to unlimited data plan over tethering. Lastly T-Mobile has AAA and Costco discounts as well, on top of preferred employer discounts, make sure to check those out. I got a recurring 15% discount on my monthly bill thanks to my AAA membership! 

AT&T's superior 4G LTE coverage is definitely a plus over T-Mobile (Source: AT&T.com)

AT&T's superior 4G LTE coverage is definitely a plus over T-Mobile (Source: AT&T.com)

Conclusion

Everything in life comes at a price. T-Mobile's coverage is not as good as AT&T. Though when I am in a good coverage area, the 4G LTE speeds of T-Mobile and AT&T are comparable, T-Mobile's LTE coverage is average at best compared to AT&T. Other than this down side I haven't faced any so far. 

In conclusion this article might sound like it was written by a disgruntled AT&T user, and the reason for that is because it is true. I have been really unhappy with AT&T for a while now and thanks to T-Mobile for initiating the much needed change in US Smartphone plans. AT&T has lost my trust and though they might not care, it is going to take a lot for me to even consider them for any service in the future. Next up, will someone please overhaul the greedy cable service system here in the US, so I can write up my next great article on how bad Comcast is!

Note: The estimates of prices in this article are only approximate and are very specific to Smartphones in USA and can vary depending on the situation and hence do not hold me accountable for an inaccuracies. As an informed consumer do your due diligence and use the above pointers, more as guidelines than rules.