To Sign or Not To Sign A Wireless Contract That Is The Question

But what’s the answer?

It’s been a slow couple of days for Android news, so I decided to take a look at the benefits, if any, to signing a two year wireless contract to get your new device on the cheap.

People are under the impression that phone subsidies are a lie, while others believe they’re the greatest thing since the invention of the cell phone. Let’s take a look at the true cost of subsidizing your new device by signing that new two year agreement.

The only carrier this really applies to is T-Mobile being that they’re they only U.S. carrier to offer tiered plan pricing. First we have the Even More (subsidized), plan which is their À la carte option. With Even More you pay separately for talk, text, and web, plus you get your phone on the cheap, or do you? Their Even More Plus (non-subsidized), plan is T-Mobile’s all you can eat buffet, you get talk, text, and web for one price, but you pay full retail for your device.

Since we’re an Android site we’ll be looking at their most and least expensive Android devices, and we’ll assume you want to use your device to its full capabilities.

First let’s take a look at what each plan will cost per month:

Even More:
Unlimited Talk $59.99 per month
Text $10.00 per month
Web $30.00 per month
Total: $99.99 per month

Even More Plus:
Unlimited Talk, Text and Web $79.99 per month
Total: $79.99 per month

With the Even More plan you’ll be paying $480.00 more for service over the course of your two year contract.

Nexus One:

$179.00 subsidized price + $480 = $659.00 paid for a $529 Nexus One. That contract just caused you to pay $130.00 in “finance fees” for your Nexus One.

T-Mobile G1:

$99 subsidized price + $480 = $579.00 paid for a $369.99 T-Mobile G1. You just paid $210 in “finance fees.”

If you’re a T-Mobile customer, financially it doesn’t make sense to sign a two year contract.

While you can buy unsubsidized from AT&T, Sprint, and Verizon, there is no incentive to buy a non-subsidized phone because you don’t receive a discount on the rate plan. The only reason not to go unsubsidized is to avoid signing a two year contract.

Looking at T-Mobiles Pre-paid Plans, that may be the way to go is you’re not a heavy SMS (10¢ to send, 5¢ to receive), /MMS (25¢ to send and receive), user. You’ll pay 30 bucks a month for data plus the cost of your prepaid minutes. For me 1,000 minutes will last just a little over 3 months, most of the time I’m G-Talking, e-mailing, Facebooking and Twittering. So, if you’re not a big talker and you don’t send and receive a lot of SMS/MMS messages going prepaid is something to consider. Heck, who doesn’t want to save a few bucks in this economy?

T-Mobile Pre-Pay Options

What do you think about phone subsidies? Looking at the numbers do you wish that AT&T, Sprint, and Verizon offered subsidized and non-subsidized pricing similar to T-Mobile? Let us know what you think in the comments.

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