Consumer Law

Comparing Total Cost of Ownership for T-Mobile, AT&T, and Verizon

By Sam Glover

When T-Mobile threw a $9.99 charge on my bill, I was ready to ditch T-Mobile and never look back. But in the comments to that post, as well as the comments to a similar post on Consumerist, I learned there was nowhere to go. All the major cell phone carriers engage in preacquired account marketing—or third-party billing, as they prefer to say.

Faced with no good options, it makes sense to look at price. What I found was that the most-expensive phone works out to cost significantly less.

When I buy a new phone, I will buy a smartphone. I am primarily interested in three, the Google Nexus One on T-Mobile, the iPhone 3G S on AT&T, and the Motorola Droid (or Palm Pre Plus, when it arrives in a couple of weeks) on Verizon.

The Nexus One costs a lot more up front—$529—while the iPhone and Droid are both $199 with a two-year commitment. But T-Mobile’s unsubsidized phone plans are much less expensive. Here is the total cost of all three phones with comparable minutes and unlimited data and messaging on all three carriers:

As you can see, T-Mobile is $600 less than AT&T, and $800 less than Verizon over two years.

If you have a choice of evils, I suppose it makes sense to choose the least-expensive, as well as the one that makes it easiest to undo some of the evil (T-Mobile did make it fairly easy to get a refund for the third-party charges, even if they never should have happened in the first place).

(photo: nedrichards)

Full post as published by Caveat Emptor on January 18, 2010 (boomark / email).