Does the Un-Carrier Have What it Takes to Beat Verizon and AT&T?

T-Mobile's "Uncarrier" initiative has been gathering some attention since launching about 11 months ago. Often, these types of statements are made with few actual consumer-friendly actions. The first, and arguably most important move, was to unbundle the phone subsidy from the monthly contact amount while simultaneously getting rid of the oppressive two-year contracts still operated by the other the major carriers.

To explain, as part of your monthly service fees, Verizon, AT&T, and Sprint charge you about $20 for each phone to subsidize the cost. This is how the $650 iPhone can be offered for $200 on-contract. Now this would be fine, but if on month 25 you decide that you like your phone just fine and don't need to upgrade you still keep paying this hidden cost (my mom is still using a Samsung Fascinate, so yes, many people do this). In essence, my mom has paid about $1,000 to-date ($199 up-front plus $20 x 40 months) for her phone. To explain the difference, T-Mobile's plans separate the phone cost from the contact cost so that once your phone is paid for, you stop paying for it. So after your phone is paid off, you monthly bill will be about $20 less (or $40 if you've got two phones).

Another alternative would be to buy a phone off-contact for around $200 (We bought two Nexus 4's), and have significantly lower monthly payments. I've figured that given the difference between Verizon and T-Mobile, the cost of the phone will be covered in about seven months (less actually as we both sold our old Verizon smartphones). Not to mention, but if you use AT&T, you can probably unlock your current phone and use it on T-Mobile.

To put some actual hard numbers down as to the savings, we were paying $143 after taxes, fees, etc on Verizon. Our last bill with T-Mobile was $84. That's about $600 extra in cash we will have at the end of the first year, and an extra $720 each year thereafter.

Now I knew that this difference in price would not be without compromises, and I definitely understand why many would be hesitant to switch. T-Mobile does not cover many of the areas between cities, and is still 2G in a surprising number of areas (including my home town of about 20,000 people). I'll say it right now, 2G is only good for calls. Data speeds are so slow that even receiving or sending MMS or Gchat messages is often beyond it's capabilities. It's one of the more frustrating aspects of their service.

That's not to say that their network is always bad. Harrisburg, Pennsylvania, a city of about 50,000 people and the city where I work, has excellent HSPA+ coverage. In fact, download speeds were about 30% faster on T-Mobile HSPA+ than I was getting on Verizon LTE (in real-world use I don't notice the difference).

Hopefully T-Mobile can get more of their network onto at least 3G in the near future, then I would recommend them whole-heartedly. Until then, I'm in a spot where I feel like they've started something good, but left it unfinished. In some ways, the "Un-carrier" moniker is true, though not always in the flattering way they'd hope.