- T-Mobile announced new 2.0 versions of its existing flagship plans
- Once again, T-Mobile is focusing on the switching environment, saying it’s removing a barrier by reducing upfront device costs
- Analysts say the move from 24-month device financing to 36 months gives T-Mobile a chance to keep customers longer
T-Mobile today unveiled new Experience and Essentials 2.0 Plans with an equipment installment plan (EIP) financing option that promises a “zero-dollar-out-of-pocket” path to a new device, while “paying nothing” upfront. T-Mobile introduces it as the “Nothing” plan.
The plans are actually the 2.0 versions of T-Mobile’s existing flagship plans, according to the company. Experience Beyond, Experience More and Essentials are becoming Experience Beyond 2.0, Experience More 2.0 and Essentials 2.0, which add features like EIP Flex 36 and extended financing.
The operator is pitching the new plans as a way to make it easier to switch carriers – by eliminating the barrier of upfront costs, which are often unexpected. It follows the “15-Minute Switch” process it offers through the T-Life app and same-day device delivery provided via DoorDash.
It’s also throwing in some new Student Perks just in time for back-to-school shopping. According to T-Mobile, more than two-thirds of students say they want a wireless plan of their own for greater autonomy and control, but affordability often stands in the way.
“Lowering upfront costs with EIP Flex 36 and making our plans more accessible through Student Perks are just the latest ways T‑Mobile is continuing to remove the barriers that keep people from experiencing everything T‑Mobile has to offer,” said Chief Marketing, Brand and Broadband Officer Andre Almeida said in a statement.
T-Mobile: Something more than nothing?
Given the press release announcing the “Nothing” deal is more than 1,300 words long, including the fine print, Fierce set out to see how this adds up to more than nil.
The first thing that stands out is it’s a churn deterrent because the offer is for 36 months, representing a departure from the usual 24-month financing that was T-Mobile’s differentiator against Verizon and AT&T in the past, said Bill Ho, founder and principal analyst at 556 Ventures.
Techsponential President Avi Greengart echoed that sentiment, noting that by adding a third year to the finance plan, it will take longer to pay off that phone – potentially increasing the time a subscriber stays with the carrier – but it also means that the monthly payment drops by a third.
“This can offset rising phone prices, whether that's due to component cost increases or consumers moving upmarket for premium and foldable devices that are central to their digital lives,” he told Fierce.
A T-Mobile spokesperson confirmed that the 36-month EIP for smartphones is a new offering.
“Customer needs have evolved and we’re evolving with them. People are keeping their phones longer, premium devices are more expensive than ever, and customers consistently tell us upfront costs are one of the biggest barriers to switching,” the spokesperson said.
Upfront costs get a makeover
As for the average upfront costs to upgrade a device, T-Mobile said that for any wireless consumer, those costs typically run about $120 per line, so for a family of four, that’s almost $500 before they’d even walk out of the store.
According to T-Mobile, the EIP Flex 36 is the first financing option in wireless that lets new and existing customers finance the device, taxes and fees at checkout. The offer helps lower upfront costs for everyone and eliminates them entirely for “well-qualified” customers, the definition of which isn’t specified.
Fierce asked if the “Nothing” offer will be in effect when Apple introduces is next iPhone line-up in September.
T-Mobile’s answer: Yes. “Customers have to be on the new 2.0 plans, but with EIP Flex 36, well qualified customers can walk out with any phone, watch or tablet (not just the latest devices) for $0 out-of-pocket,” the spokesperson said.
The new plans announced today launch Thursday, August 6.
T-Mobile’s Student Perks
The new Student Perks include a single wireless line for $30/month with autopay, plus taxes and fees, and a student-exclusive 5G Home Internet bundle that comes with a $200 virtual prepaid card.
Greengart said the student pricing “nicely bookends T-Mobile's senior plans, providing a lower entry point for what would otherwise be an expensive single-line plan, and keeps students from buying a prepaid plan instead.”
The edginess factor
How “un-carrier” is this move?
556 Ventures’ Ho said he agrees with some of the comments on customer forums surmising that T-Mobile has gone more corporate since the tenure of former CEO John Legere and the early days of Mike Sievert, who preceded current CEO Srini Gopalan, a veteran from T-Mobile parent Deutsche Telekom in Germany.
Those previous CEOs represented more of an “industry rebel” culture. “The installment of Gopalan and his moves of late are driving to a more corporate direction,” similar to its peers at AT&T and Verizon, Ho said.
According to Greengart: “Dropping the activation charges is uncarrier-like (except Verizon did it first).”
Touché!
That said, “financing everything, including taxes, with nothing due at time of purchase is new and eliminates a pain point that often surprises buyers,” Greengart concluded.
Read more Fierce stories about T-Mobile and wireless payment plans:
T-Mobile pivots to premium as wireless pricing lanes blur: Navi
Verizon launches Simplicity pricing, new loyalty program
What happened to T-Mobile's ‘un-carrier’ edge?