Friday, February 22, 2013

When Free Is A Bad Deal: T-Mobile's Free Nexus 4 Deal Is A Bad One - Better Options Available

Today is a slow news day.  So, obviously, all the blogs out there are in need of clicks (I wouldn’t mind a couple) on this Friday.  That’s the only reason I can think of why more than a few blogs, mostly Android centric ones but also a few major ones, are boasting about T-Mobile’s free Nexus 4 deal.

It’s a bad deal anyway you look at it.  I like to think these blogs are doing more to protect and educate their readers.

First, if you’re signing any two-year contracts these days, it’s a bad deal.  Device makers know it, carriers know it, and pundits/bloggers know it.  The math is very clear and they’re all over the Internet.

Second, specific to the T-Mobile Nexus 4 deal, I cannot understand why T-Mobile is selling the 16 GB Nexus 4 for $549.99 off-contract or anyone would buy it from T-Mobile when you can buy the same exact one from Google for much, much less.  How much?  $200 less (Google Play).

Now, let’s talk about this free Nexus 4 with a two-year commitment.  Previously, T-Mobile offers the Nexus 4 for $199 on contract.  So, you’re paying a monthly fee to help T-Mobile cover the cost of the device.  You were adding $200 more to T-Mobile’s pocket when based on the Google price, it should have been free to start with.  In fact, it’s T-Mobile that should have paid you $200 to buy the Nexus 4.

Let’s move onto what  you’ll have to pay.  T-Mobile offers three tiers - $95, $90, and $60 (there are a few other choices but for the sake of argument, let’s leave it at these three).  You won’t want the $60 plan because it comes with no data.  You’ll probably take the $90 a month plan because for $5 more, you get the hotspot feature which most users will forgo because they don’t need it and if they wanna enable it, they’ll be able to find help on the Web to do it without paying for it.

So, for two years, the subscriber will owe T-Mobile $2160 (let’s wave the taxes to simply the point).  When the phone wasn’t free, amount goes up to at least $2360.

That’s the bad plan and idea. Now, let’s go with what all mobile warriors should be doing.  Buy the Nexus 4 of your choice from Google – 8 GB or 16 GB and carrier of your choice.  Here, we’re talking about T-Mobile.  Now, you’ll need a data plan.

Before, I would have suggested Straight Talk but this week, T-Mobile unveiled its own prepaid brand called Go Smart Mobile and because we are talking about T-Mobile, let's use GSM.  It offers you three simple tiers of plans but you want to go with the $45 plan that gives you unlimited everything just as T-Mobile’s $90 post-paid plan does.  The difference is that the $90 plan gives your T-Mobile’s 4G speed capped at 4 GB while the Go Smart plan gives you 3G up to 5 GB.  Having said that, I’m not absolutely certain there will be a lot of different in speed.  But that extra 1 GB the cheaper smarter Go Smart plan could come in handy.

How much would this cost you for two years by going Go Smart or any other prepaid carrier like Straight Talk?  You do have to pay for the $350 Nexus from Google upfront because no one will be subsidizing but you only pay $45 a month.  Notice that is half the monthly cost of T-Mobile’s post-paid two-year commit a month?

The total is $1430.  That’s $350 for the Nexus 4 and $45 a month for twenty four month.  This saves you $930 when T-Mobile is charging you $200 for buying Nexus 4 from them or $730 with the current “special deal” where T-Mobile offers you the Nexus 4 for free.

So, you have $730 to $930.

In conclusion, the current Nexus 4 deal from T-Mobile is horrible.  In fact, you have so many prepaid carriers and options available that signing any two-year contract is a bad deal.

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