Struggling cellular carrier T-Mobile USA, fresh from merging with pay-as-you-go provider MetroPCS, has been hinting for months about a radical new approach to data plans for smartphones and tablets. Those plans went public this week and bear out T-Mobile's claim of offering better deals than its competitors. The only "radical" part of the long-awaited plan is that you won't have to purchase additional data as you approach your cap, but you will see your speed severely throttled. Don't be fooled by the lack of a two-year contract either; U.S. cellular networks are largely incompatible, so you can't move a phone from one carrier to another, except between AT&T and T-Mobile -- and then only for 3G service.
Those lower prices come with three potential costs:
- No iPhone, though that changes when the iPhone 5 becomes available on T-Mobile on April 12.
- The end of subsidized smartphones, though customers can pay on an installment plan to lessen price shock. Once you've fully paid for the phone, your bill goes down -- which is not the case with the other carriers.
- Poor coverage in many parts of the country, though T-Mobile has finally begun investing in sorely need infrastructure, which will take years to accomplish.
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Once you do the math on the often-confusing options (see my calculations later in this article), the data plans tend to break into two broad camps: T-Mobile and Verizon are the relative bargains, while AT&T and Sprint come with higher costs. For many usage scenarios, the four carriers' prices are very similar.
Service quality continues to vary considerably, with each carrier having sections of the country with great coverage and speed, and other areas where the coverage is spotty and unreliable. Your odds of coverage are highest to lowest in the following order: Verizon, AT&T, Sprint, and T-Mobile. For LTE 4G coverage, the odds follow the same pattern, but the odds are steeper: Verizon has by far the most coverage, AT&T has moderate coverage, Sprint has isolated coverage, and T-Mobile is only now starting to deploy LTE, though it's inheriting limited LTE coverage in some urban areas from MetroPCS. T-Mobile's first LTE cities are Baltimore, Houston, Las Vegas, Kansas City, Phoenix, San Jose, Calif., and Washington, D.C.
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