Does ‘contractless’ translate to ‘brainless’?

Data and voice plans without contracts have been around for years. In fact I can’t remember the last time I was on any mobile plan that involved a contract. These plans are usually very attractive in terms of rates and conditions because they do not include any subsidy of handsets and do not have time clauses. This is the original BYOD concept.

They are usually dead simple to understand – you buy your own phone and get a SIM from an operator. You put the SIM in the phone and ‘voila’ off you go. You can also select ‘contractless’ plans for both prepaid and postpaid accounts. In markets I frequent in Asia, I can select almost any available plan and choose to go without contract.

You can imagine my surprise when I caught an article on CNet trying to explain T-Mobile’s new ‘contractless’ plans in the US. My surprise turned to sheer bewilderment when I worked out it took almost 3,000 words to explain. That’s enough for five of my blogs and certainly enough for a short story. Who in their right mind would have the time or patience to read through something like that just to get a plan without contract?

In a nutshell, T-Mobile has introduced new plans where customers can get unlimited voice and text messaging service, and on top of that they are able to choose from a variety of data packages. A plan for 500MB of unlimited data costs $50 a month. A plan for 2GB of high-speed data is $60 a month. And users can get a completely unlimited data plan for $70. The only catch is that you have to supply your own phone. That can’t be too difficult, surely?

Wrong. The article goes on to explain why. “Yes, we guess in a sense you could say that there is a catch. T-Mobile is no longer “subsidizing” cell phones for service.” Umm, that’s obvious, isn’t it? But just in case you are under ten years of age, have an IQ of less then 50 or you are brain dead and still don’t understand, CNet is happy to help you out: “Smartphones are expensive. Some of the newer models cost between $600 and $700 at full retail price. Traditionally, wireless subscribers in the U.S. have asked customers to pay a fraction of that cost. Typically, the price is about $200. The carrier pays the rest of the cost of the phone. In exchange for this “deal,” consumers agree to a two-year service contract. And if they leave the service early, they must pay an early termination fee.

T-Mobile is getting rid of the contract and the subsidy. This means that customers will have to pay the full price for their phones.”

At this stage I started looking for a razor blade, but it got worse, a lot worse. The next gem of wisdom was titled, “What if I can’t afford the cost of a new phone?” Then don’t go for a ‘contractless’ plan, obviously! But just in case you still want one, T-Mobile is offering a financing plan so you can buy the phone to take advantage the plans that don’t subsidize the phones. Tell me I’m dreaming, please!

Some of the following section titles are even more bewildering, if that is possible.

This kind of sounds a lot like a contract/subsidy plan. What’s the difference?

“The big difference is that after you pay off the phone, your overall monthly bill goes down.”

How do the new service plans work?  Aaaarrrrggghhhhhh

Are the new plans unlimited?

“Yes, but there is fine print to consider. For talk and text, at least, “unlimited” really means just that. T-Mobile will not differentiate between weekday, weekend, and night calls. What’s more, all domestic sent and received messages (text, photo, and video) will be included. Data is unlimited as well, but not all of that data will come at the same speed.”

What are the options for buying a phone?

I kid you not, this is explained in detail just in case you have never bought anything in your life or you are a complete moron.

Will I end up paying more for the device if I “finance” it?

What happens after you’ve finished paying off your phone?

And the ‘coup de grace’  – Can I sign up for a plan and bring my own phone?

I am convinced that the joint writers of this fantastic piece have no idea how the mobile phone industry works. If they did, they would be able to explain quite simply that when an operator subsidizes a phone they are actually financing it over the period of the contract and building the financing fees into the monthly charges. If they don’t have to subsidize the phone they can offer better plans, with no contract. Bang, that’s it in 50 words or less.

Oh, I get it now, this was meant for publishing on April 1 and it was posted early by mistake. That explains everything.

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About Tony Poulos 48 Articles
Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, been contributing Analyst for IDC, a freelance writer and is a columnist and video anchor for Telecom Asia. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide.

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