T-Mobile’s Un-Uncarrier “Four 5G Phones for $5 Each” Offer
Context (What Happened)
T-Mobile announced “supercharged Un-carrier deals” including four unlimited data lines for $20 per line, per month, or four Samsung Galaxy A71 5G phones, worth $600 each, for just an additional $5 per month per phone. The offer is available for new and existing customers alike.
Press release: https://www.t-mobile.com/news/un-carrier/supercharged-un-carrier-deals
Analysis
The service offer is competitive, although there are plenty of limitations. For example, taxes and fees are not included, subscriber speeds are slowed during congestion, tethered data is slowed to 3G speeds, streaming video is limited to 1.5 Mbps (standard definition), and T-Mobile’s free international data roaming is not included. It is not an unprecedented offer; Sprint offered five lines for $100 during its desperate pre-merger stage, and four-lines-for-$100 has been a common offering across the prepaid landscape. Despite all the conditions, this is still a strong offer for families and small businesses, with unlimited data, CallerID, and access to a 5G network that will soon balance of speed and coverage. The plan skips things that most people won’t miss at a price point that postpaid rivals don’t match.
However, the phone offer is rife with so many conditions and caveats that few people can take advantage of it the way it is positioned:
Only one phone model is being offered in this deal: Samsung's $600 Galaxy A71 5G (Techsponential will have a unit in to review later this week). If customers want an iPhone or the Galaxy Z Flip 5G that T-Mobile also announced yesterday, they can use it with the service, but T-Mobile will not subsidize it with this offer.
The service offer can be expanded to up to six lines for an additional $20 per line, but the phone deal maxes out at four devices.
The biggest problem is that it is not just $5 per month per phone; you need trade-ins to get the deal. No trade-in, no phone deal.
How good is this offer? To find out, let's do some math:
The monthly added cost per phone equals $120 ($5 per month x 24 months). For four phones, that’s $480.
Before any trade-ins, this deal looks incredible. Each phone costs $600, less the $120 you pay over 24 months, or a saving of $480 per phone. For four phones, that’s a staggering savings of $1,920 off the $2400 retail price. Sounds great! However, you only save $600 when you trade in one of the following phone models:
-Apple: iPhone 8, 8 Plus, X, XR, XS, XS Max, 11 (any variant)
-Samsung: GS9 series, Note9, GS10 series, Note10 series, GS8 series, Note8
-Google: Pixel 4, Pixel 4XL
-OnePlus: 7T Pro McLaren, 7T, 8, 8 Pro
-LG: V60 ThinQ
Some of those phones are worth $600 – or more! – all by themselves. You would have to be crazy to trade in a Note 10+ (worth $600 on Samsung's trade-in chart) and then pay another $120 over 24 months to get a Galaxy A71 5G. If you did so, you’d be effectively paying $720 for a $600 phone. The math on trading in an iPhone 11 Pro Max to get a $600 discount on a Galaxy A71 5G is even more upside down, but literally nobody is going to do that, so it's almost silly that T-Mobile bothered to include iPhone 11’s on the list.
But let’s say you have a Galaxy Note8 (worth $175 as a trade-in at Samsung). In that case, you're paying $175 worth of trade in value + $120 over 24 months = $295 for your new $600 phone. Trade in four Note8’s, and you've saved $1,220. This is not four phones for $20 per month, but it is still a substantial savings. Fortunately for T-Mobile’s accountants, they will not have to pay this out often. Who has four Galaxy Note8's to trade in?
Consumers who don't have a high value phone to trade will get $300 off for the following phone models:
-Apple: 7, 7 Plus (any variant)
-Samsung: Galaxy S7 series, A20, J7 Star
-Google: Pixel 3A, Pixel 3A XL, Pixel 3, Pixel 3XL
-OnePlus: 6, 6T, 7, 7 Pro
-LG: G7 ThinQ, G8 ThinQ, V40 ThinQ, V50 ThinQ
This is not as good a deal, but it is more realistic. Those iPhones still retain some value, but the rest of the list are not worth very much. There are plenty of families on budgets who have multiple Samsung A20's, and LG G7 ThinQ’s were repeatedly offered in BOGO deals. A G7 is only worth $50 as a trade in (or as little as $21 at a kiosk). That means you can get $2400 worth of new Samsung 5G phones for around $200 of trade-ins + $1,200 + $480 over 24 months = $1,880, for a savings of $520. That is hardly “just $5 per month more for a $600 phone,” but it is a $130 discount per phone, and it is reasonable to assume that some consumers will take advantage of it.
Of course, if you are chasing hardware discounts and not the underlying service offer, you could just switch to a different carrier where you'll find $300 switcher offers all day long.
Conclusion
T-Mobile’s discounted multi-line plan has limitations, but it is competitive. Consumers who want to take T-Mobile up on that four-line deal, and who have specific phones ready to trade in, and want the Samsung A71 5G, can save up to $295 per phone. Most will be saving a lot less. Since this is on top of a competitive service deal, you could argue that it does not matter that the device offer is weak. If it was just a modest discount and presented that way, it wouldn’t be a problem. However, John Legere and Mike Sievert rebuilt T-Mobile’s business based on selling a rejuvenated network with strong “Uncarrier” marketing (see Scam Shield, which I praised earlier this week). This is as far off-brand as you can get. T-Mobile promises that you can “get 5G phones included for $5/month more each,” but there is fine print for miles, everything is a gotcha, and what looks like a great deal is just OK – or could actually cost you money if you trade in the wrong device. It is precisely the sort of offer that CEO Mike Sievert would mock if it came from AT&T.
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