T-Mobile SIM

I recently reached the uneventful end to my two and a half year run with Verizon Wireless. After flirting with the possibility for a few weeks, I decided to take the jump, and port my phone numbers over permanently to T-Mobile. I guess you could say that I fell for a very effective marketing strategy, but it’s hard to argue with the fact that I will be saving a bunch of money each month by switching.

My current Verizon bill is approximately $165 every month; that’s with two iPhones, and an iPad. A comparable setup on T-Mobile should position me well within the $100 range, effectively saving me around the ballpark of $60 each month.

Granted, this isn’t a cookie cutter solution for everyone; there’s tons to consider before taking the plunge, but I think it will work out nicely for me. It could work out nicely for you too, as long as you take into consideration a few important points…

Ensure you have good coverage

First and foremost is coverage. T-Mobile is known for having subpar network coverage; they play second fiddle to Verizon and AT&T in this area. That’s something that you’re definitely going to want to investigate before making a move like this. It doesn’t matter how inexpensive the plan is if it doesn’t work.

To help, you can create a pre-paid T-Mobile account in order to test out the service for a few days before taking the next step. Pre-paid accounts are excellent ways to reveal the true nature of the T-Mobile’s network in your area. These accounts are easy to setup, easy to cancel, and they’ll tell you a lot about the health of the network in your area.

Counting the real cost

Chances are that T-Mobile will save you a sizable amount of money each month, but it isn’t a forgone conclusion. You need to do the math before you rush into making a decision.

T-Mobile Numbers

The very first thing you need to do is analyze your current situation. Do you have an existing contract with another carrier? If so, you’ll probably have to wait until that contract ends, or else pay an early Termination Fee (ETF). While these fees are generally looked at with severe apprehension, it may be less than you think, and you could still end up saving money by paying the ETF.

First of all, find out how much money you will actually save by switching to T-Mobile. If you find out you’ll save $50 a month, and your contract ends in 6 months, you can do some simple math to see what decision is the right decision.

$50 per month for 6 months = $300.

If your ETF is less than $300, then it may be advisable to go ahead and pay the ETF. Generally speaking, ETFs reduce in price by about $10 per every month fulfilled on your contract. That means that if you have a 2 year contract with an ETF of $350, your ETF will be $170 after a year ($350-(18*10)). Since $170 is substantially less than the $300 of savings you’d receive by switching to T-Mobile, it may be wise to go ahead and switch, regardless of the ETF. Of course, your specific case and mileage may vary. This is just a general synopsis of a typical situation.

Keep in mind, that you must accurately calculate your own net savings. I recommend throwing everything into a Numbers spreadsheet. I created the chart that lies below by throwing some basic data in Numbers. It shows the difference between a two year contract with Verizon and T-Mobile when canceling Verizon at the very beginning of a brand new contract. Even with paying the $350 ETF, you still come out way ahead when staying with T-Mobile for two years.

Verizon vs T-Mobile

Is switching worth the effort?

So what’s the catch? Why don’t we see more people flocking over to T-Mobile if the savings are so great? One word: subsidies. With T-Mobile’s latest “Uncarrier” initiative, you get no such subsidies. You need to pay full price for your new device, which comes close to the total amount of savings you gain from switching to T-Mobile.

In the above example, I saved approximately $799 by switching from Verizon to T-Mobile. Guess how much a brand new full price unsubsidized iPhone is? Not too far away from $799, depending on your configuration. Based on your usage, the savings, if any, could be negligible long term, especially when you consider taxes, fees, etc.

But, T-Mobile is without a doubt the best deal for you if you don’t plan on switching devices every couple of years. Let’s say you planned on keeping your iPhone 5s for the next 4 years. By doing that, you’d save a boatload of cash, and the savings would just add up every year you kept the same device.

Wrapping it all up

So remember — Consider these three things: Coverage, Contract, and Devices. If the coverage is good, and you plan to keep your device for a while, it doesn’t really matter if you have an ETF, you’d still be better off switching in most cases.

If the coverage is bad, then don’t switch at all.

T-Mobile iPad

If you plan to get a new device every couple of years, then it’s more of a toss up, but you’d still probably come a little bit ahead with T-Mobile, especially if you need unlimited data, have a family plan, or have a Tablet.

The absolute best thing you can do is to sit down, break out a spreadsheet and count the cost. You might be surprised by what you find. In some cases, switching could save you big, and in other cases, the savings aren’t as great, or don’t even exist at all. Do the math before you make the switch, and definitely get a pre-paid SIM to test out T-Mobile’s network before you even think about making a move.

What mobile provider do you use? Have you considered switching to T-Mobile due to the company’s “Uncarrier” initiative? Have you determined that you will save money by making the switch? Be sure to sound off with your thoughts, observations, comments, and suggestions below.