Help understanding classic vs. value plan please!

[Ratsinthehouse]

I appreciate any help understanding this as dealing with tmobile always makes me feel completely confused and like I need to have a drink immediately!

Ok, so yesterday I spoke with a retention specialist who offered me the SG3 for $179.99 plus a plan with unlimited everything for 69.99/month. This is supposedly a better plan than I currently had by $5. Great.

Today, while tracking the order, I realized that even though he had asked for my address, the package was being shipped to my old address. I call to rectify the situation and the woman I spoke with started talking a mile a minute about "why would you have this classic plan when you could have a value plan for $20 less? The phone would be $149.99 for same phone...Mail in rebate..."

So why would I? Help.

 

[Kelmar]

From my understanding (from talking with a friend who worked for Tmobile) the value plan sometimes sounds cheaper but if you are purchasing a phone in contract (and at the subsidized price) you actually have to pay an additional $15 a month for the device.

So a $200 phone + $15 (at 20 months) = $500 bucks for the phone but with a cheaper plan.

 

[raychelabcdefg]

they charge $15 a month just for a new device?! wtf. why?!

 

[Kelmar]

For giving you a discounted phone AND a discounted plan :shrug:

Buy the phone out of contract and avoid that entire thing all together

 

[Ratsinthehouse]

Thanks for the response!
I think I get it. It seems with my discounted phone price, it won't make a difference at all bc either way I'll be paying the $20/month. Whether through the plan or paying full price for phone?

 

[mogelijk]

As was alluded to, the difference between the Classic plan and the Value plan is that the Classic plan includes a subsidized phone and the Value plan doesn't, so the Value Plan tends to be cheaper per month.

T-Mobile does have a few options for purchasing a phone through the Value Plan, including an option that makes it much like the Classic plan (where it adds a set amount to the plan cost each month). It can be cheaper if you just pay the full price and buy the phone outright -- it costs more in the short term but you a few hundred dollars less over the life of the contract.

FWIW, T-Mobile has said they are getting rid of Classic Plans next year, as they will no longer offer subsidized phones. It is believed they will still offer the monthly payments option if you buy a phone with the Value Plan.

 

[LoyalServant]

They are going with the EIP over subsidizing the phone.
It's an accounting trick.

Value vs. subsidized.... the problem with Americans is they are used to the subsidy model and the subsidy model -SUCKS-.

A classic plan is the old subsidy model.. they give you a phone for x dollars and they eat the rest, hoping to recoup it over the life of the contract.

The Value model is... you pay x dollars for a device and they FINANCE the rest.
They do this at 0% interest so it's not costing you anything extra... it's basically free money for you. (If you got a loan from a bank it would cost you interest)

It does cost less money over the life of the contract and it's better for you, really.
If you decide a year later that you do not want that device because there is a new, flashier one you can pay off the EIP and they will finance another one for you, again at 0% interest.

I have done it twice... I usually pay off the EIP fairly quickly.
I don't know that I have explained it well enough but I prefer it this way because they are being completely transparent about it.
Phone costs x dollars, your paying x dollars now, that leaves x dollars to be financed at x dollars a month for x months.

I can understand that model.
I cannot understand the contract model which essentially rips you off at the end of your contract term - and that's why they like it.
Yes, the contract model of Verizon, AT&T, and Sprint RIPS you off.

 

[mogelijk]

They are going with the EIP over subsidizing the phone.
It's an accounting trick.

Value vs. subsidized.... the problem with Americans is they are used to the subsidy model and the subsidy model -SUCKS-.

A classic plan is the old subsidy model.. they give you a phone for x dollars and they eat the rest, hoping to recoup it over the life of the contract.

The Value model is... you pay x dollars for a device and they FINANCE the rest.
They do this at 0% interest so it's not costing you anything extra... it's basically free money for you. (If you got a loan from a bank it would cost you interest)

It does cost less money over the life of the contract and it's better for you, really.
If you decide a year later that you do not want that device because there is a new, flashier one you can pay off the EIP and they will finance another one for you, again at 0% interest.

I have done it twice... I usually pay off the EIP fairly quickly.
I don't know that I have explained it well enough but I prefer it this way because they are being completely transparent about it.
Phone costs x dollars, your paying x dollars now, that leaves x dollars to be financed at x dollars a month for x months.

I can understand that model.
I cannot understand the contract model which essentially rips you off at the end of your contract term - and that's why they like it.
Yes, the contract model of Verizon, AT&T, and Sprint RIPS you off.

Some of the articles talking about T-Mobile getting rid of Classic plans mentioned that only about 20% of new users are buying Classic plans -- 80% are buying either Value or Monthly plans. I have to wonder what AT&T, Verizon, and Sprint's numbers would be if they offered good non-Classic plans.

American's have seemed to be in love with the "free" (or cheap) phone -- I suspect the love is similar to the amount of credit card debt the average American has (why pay for it now when I can pay for it later). From that standpoint, the Value plans make a lot of sense.

Of course, the best thing that could happen is for people to have a choice as to where they buy their phones and then buy the plan after. While T-Mobile does offer zero percent interest, they are still charging a premium for the phone, it is typically cheaper if you buy the phone somewhere else. A great example of this is the Nexus 4; T-Mobile charges $499 for the Nexus 4 (if not on a Classic plan), when the same phone is available from Google for $350.

 

[NeXuS4]

How to win at cellphones:

1. Buy Nexus4
2. Get T-Mobile Sim and Value Plan
3. ????
4. .winrar

 

[bob60626]

I haven't had a contract phone in years. I don't like them but still! am tempted by a free Note and the possibility of a 15% discount.

 

[colnago]

How to win at cellphones:

1. Buy Nexus4
2. Get T-Mobile Sim and Value Plan
3. ????
4. .winrar

Better yet, change step (2) to "Simple Mobile" or "Straight Talk" SIM...use the same at&t or T-Mo network for less money.

 

[Crashdamage]

Better yet, change step (2) to "Simple Mobile" or "Straight Talk" SIM...use the same at&t or T-Mo network for less money.

Coverage area is reduced though, due to no roaming between the networks. T-Mobile plans include roaming and so better coverage, particularly in the boonies.

Very poor customer service.

They are cheaper for a reason...

 

[LoyalServant]

It is true that you are paying a premium for the phone.
If you are going to buy it outright then it is better to shop around.

The Nexus 4 is an example of how to really save a lot of money - even with a value plan.
This is how the market SHOULD work.
You buy your phone - it's yours..... and you pick a carrier and put a sim in.

I can't fault T-Mobile for much... the value plan as I have seen it explained by their reps is straightforward. It's just numbers.
That may be because I am a numbers person.... so to me it's a no brainer.

I guess for the OP.... take whatever deals they give you and run with them as long as they are in your best interest. If you can save $20 a month with very little strings attached then it's a win for you.