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Total Cost of Ownership: AT&T vs T-Mobile vs T-Mobile
| Total Cost of Ownership: AT&T vs T-Mobile vs T-Mobile |
| Written by Ben | ||||||||||||||||||||
| Saturday, 21 November 2009 02:37 | ||||||||||||||||||||
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I have resisted getting a smartphone for as long as I can, but now I am in the process of giving in. It's in my nature to resist being more wired-in regardless of the clear irony that I am a serial Internet entrepreneur. I even resisted getting a cellphone until 2005. Despite its advantages, being more connected just feels like I'm taking one step closer to the Borg. I'm also I'm Jewishly frugal; if I don't absolutely need a new gizmo, I'm not going to pay an extra $40 per month for it - not unless it's going to save me even more money. That being said, it's time to put my heritage to use and calculate the total cost of ownership for the smartphones and plans that I am considering: the AT&T iPhone 3Gs, T-Mobile myTouch 3G (with contract), and T-Mobile myTouch 3G (no contract). This is only a total cost of ownership comparison. I've played with both and I'll be happy with either phone. I've also been a T-Mobile customer since 2005 (yes, since my first cellphone) and I've been mostly satisfied. MethodologySince "future dollars" are worth less than "present dollars", calculations will be for the present value for two years worth of service payments (since two years is the standard contract length) plus the cost of the phone. If the phone comes with a 0% interest payment plan, then it will be utilized and present value will be calculated for it as well. Present value will be calculated at 3% (not likely to get more than that in these current economic conditions). Fractions of dollars are rounded up. Activation fee and taxes will not be considered as they will be roughly the same. 500 Minute PlansI personally use about 500 minutes. I also resist text messaging whenever possible, but people text me and that costs me money. So I'll assume I'll need a text messaging bundle as well.
The Bottom LineSince all other factors are even for me (although I've not had the opportunity to work with AT&T customer service), the choice is quite clear: the myTouch 3G with the "Even More Plus" plan. Lowest total cost of ownership, best cash flow, no contract, and then at the end of two years, I'll only be paying $60 per month. Even better, I'll actually be going in on a family plan and split 1500 minutes between two people for the same cost."Even More..."Let's not pass up the most striking bit of this analysis though: the T-Mobile "Even More" (with a contract) plan costs $223 more than its own "Even More Plus" (no contract) plan! And since you can get 0% financing for 20 months on the "full price" phone, the plan with a contract even makes you pay more upfront; let alone the fact that you'd have a new two-year contract on your hands. In Short? There is no reason what-so-ever to purchase the "Even More" plan.Other factorsThe total cost of ownership is most likely to be affected by the price of the phone. You can lower the iPhone cost of ownership by purchasing a refurbished iPhone, or the old iPhone, or beg your friend to give you his old iPhone that he uses as miscellaneous desk clutter. Perhaps you can get a myTouch for $250 on eBay, or get one for $0 on Christmas.However, even if you can bring the price of the phone down, after two years (should you survive your contract) you'll still be paying $75 per month to AT&T and only $60 per month to T-Mobile. Just keep in mind that those payments are made with less valuable "future dollars". |
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| Last Updated on Saturday, 21 November 2009 07:53 |