T-Mobile Will Buy You Out of Your Wireless Contract: Here’s How the Math Adds Up

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T-Mobile today announced that it would pay up to $650 per line to get customers to switch away from competitors such as Verizon, Sprint and AT&T.

Under the offer, customers who switch can get up to $300 when trading in a cell phone and up to $350 toward the early-termination fees incurred when breaking a contract with a competing carrier.

(MORE: T-Mobile to Pay Customers to Leave Rivals)

A T-Mobile spokesperson gave the example of a person turning in an iPhone 5S from AT&T: T-Mobile would pay $282 for the phone, plus whatever early-termination fee AT&T charged the customer. “You paid $200. It’s actually worth $282 … You’re gonna make a profit on your phone of $82,” said the T-Mobile spokesperson.

Early-termination fees work on a sliding scale based on how much time a customer has left on his or her contract. Once the customer receives the final bill from AT&T, for instance, the bill can be sent to T-Mobile, at which point the company will reimburse the customer for the early-termination fee.

For comparison, the T-Mobile iPhone 5S starts at $25 per month spread out over 24 months for the handset itself, plus $50 per month for 500 MB of high-speed data and unlimited voice service and text messages. Once the 500-MB data limit is reached, data speeds are slowed considerably, but there are no overage charges. For $10 more, customers can get 2.5 GB of high-speed data; for $20 more, it’s unlimited.

T-Mobile also revealed that its high-speed data network now boasts faster average download speeds than Verizon, AT&T and Sprint and that it’s been rolling out additional bandwidth to better serve locations in suburban and rural areas.

11 comments
DesereDavila
DesereDavila

$789 my at&t bill for two phones. (Plus $300 activation fee plus $135 internet) At&t Employee Lied to me saying two phones and internet bundled would only be $150 so when I called about the $300 bill explaining what the 1st employee told me it would cost. He told me enothing Was bundled. So he said he would fix it & send me a gift card. I payed the $300 thinking I was getting a $150 gift card. when I got the $700 bill I called Back thinking it was a mistake. After finding out that was my bill I asked to cancel everything the employee said we are really busy & I wanna see if I could lower ur bill cause u would owe AT&T over $1000 if u cancel he asked to call me back .... He never called me back thank AT&T

JtHawk
JtHawk

Read the super fine print. You're actually signing away your portability rights - that means they're actually buying your phone number. T-mobile tried that crap on me when I left them over a year ago, but they never paid early termination fees because I had waited until my previous contract was up. I screamed bloody murder for 3 months and threatened suit if they sent me to collections before they finally gave up...

TRAVISCOPLEN
TRAVISCOPLEN

I WAS WITH T MOBILE FOR 12 YEARS AND THE LAST 2 YEARS IT SUCKED AND THEY COULDNT FIX THE ISSUES WE HAD. SO I LEFT THEM AND HAVE BEEN WITH AT&T FOR 3 YEARS AND LOVE IT. AMAZING SERVICE, AND I HAVE NOT FOUND ANY ONE IN MY AREA THAT HAS FASTER INTERNET SPEEDS THAN ME. UNTILL I SEE THAT T MOBILE 4G IS ACTUALLY FASTER I WILL NOT EVEN CONSIDER THE SWITCH BACK.  THE LAST 2 YEARS I WAS WITH THEM, PEOPLE WOULD CALL ME FOR DAYS AND MY PHONE WOULD NEVER RING, AND TAKE WEEKS TO RECIEVE TEXT MESSAGES. IN ONE TROUBLE CALL TO CUSTOMER SERVICE THEY TRIED TO CALL MY PHONE 14 TIMES AND I ONLY RECIEVED 1. THEY COULD NEVER RESOLVE THE ISSUE, SO I WALKED AWAY AND THEY STILL TRIED TO CHARGE ME EARLY TERMINATION...I NEVER PAYED THEM A DIME. AT THE TIME I KNEW OF 20+ OTHER PEOPLE IN MY AREA THAT HAD THE SAME ISSUES.

DoTheMath
DoTheMath

The math does NOT add up. My 2-line family plan on att with 3gb data per line, 200 texts per line (which we never go over) and 550 talk/rollover which we never go over is about $150/month. The similar (2.5gb data) plan on T-Mobile is $90 + phones (~50/mo). iPhone 5s/32gb will cost $99 per phone + $25/month for 2 years.


SO... this jump will save me $10/month, we will get unlimited talk/text (not relevant) - but then I am locked into T-Mobile for 2 years, else buy the $700 phone. OK, T will buy my iPhone 5 @ ~$225 each -- so new iPhone5s will "only" cost about $520 each including taxes.


I see the savings @ about $10/month. Is that worth switching from a rock solid sure-thing perfect service here in NYC to a network that may or may not be as good? I don't see the value in making the jump - EVEN IF the ETF is reimbursed.


If the monthly savings were in the $25+ range, I'd start to think about it. But not with these numbers.


NOW... if T-mobile will permit me to sell my iPhone 5 on the open market (craigslist), I could probably get $350 for them (they are almost new) - but still, the math is not as big a deal as it sounds. Unbundling the phones is just moving the line items around on the page. I see the value of the T-mobile plans for those who own their phones outright and are willing to use a 2+ year old device. Go for it!

NoTimeLeft
NoTimeLeft

“You paid $200. It’s actually worth $282 … You’re gonna make a profit on your phone of $82,” said the T-Mobile spokesperson.


And now you have NO phone.  Be prepared to pay T-Mobile $600 for the phone you just sold them for $282.

Hotpuppy
Hotpuppy

I switched 2 years ago... it works great and I save a ton.

PoppaCharlie
PoppaCharlie

Ah.  The last impediment to my switching has just been eliminated.  No more endless (rhymes with horizons).

ramone1954
ramone1954

You can actually keep the 5s and sell it somewhere else, let's say eBay. On eBay you can double those 282$ and there you made an enormous profit, which is what I did. You just have to be smart about it.