T-Mobile completely overhauled their cell phone plans today, droppping ‘myFaves’ and simplifying to just 3 plans each for individual and family plans.   The highlight is a new low-water price point for contract unlimited voice service — just $59.99 for one line and $99.99 for a two-line family plan.    All plans include unlimited mobile-to-mobile and free nights and weekends.    On a per-line basis, unlimited text messaging is $10.00.  The optional data feature is an additional $10 for regular phones, while the required data plan is $30 for BlackBerry and other smartphone devices.      At the same time, T-Mobile has launched an identical series of no-contract plans that are priced $10 ($20 for some family plans) less than the corresponding contract plan.     As with other no-contract and prepaid plans, you’ll pay significantly more for the phone.    To compare the new contract plans with other carriers’ options, visit our CellCalc rate plan comparison tool.

MyRatePlan Analysis: We’ve been forecasting that by the end of 2010, there will be just two voice plan options –a small bundle or pay-as-you-go for light users, and a flat rate unlimited voice for everyone else, with text and data as add-ons (probably marketed as bundled plans).  T-Mobile has taken a big step in that direction with these changes.     They’ve also addressed a pricing distortion in the marketplace, where contract unlimited service was $100 per month, while prepaid unlimited with services like Boost Mobile and Virgin Mobile is about $50 a month.   T-Mobile is now matching the $50 for no-contract service, and sets a price point for contract service that will force other carriers like AT&T and Verizon to respond.

Digging deeper into the changes, T-Mobile has actually raised some prices as part of these changes.  Data pricing for smartphones has increased $5 per line, while text messaging has been consolidated into a single $10.00/month plan.  Previously, there was a $5.00 plan offering 300 texts.  Since pay-as-you-go messaging remains $0.20 each, this will force more new customers to opt for a more expensive text bundle than they might have otherwise preferred.   The low-end $39.99 rate plan actually has fewer minutes now than before; this will also encourage more new customers to trade up to a more expensive rate plan.

At long last, AT&T has made picture and video messaging available on the iPhone. For those who already have a text messaging package, these message types are included in the plan and are treated like text messages.

To receive the new capability, you’ll need to connect the iPhone to your computer and download the latest update from Apple.

Shipped directly from AT&T with priority two-day free shipping.   Requires new two-year AT&T service.  Per AT&T, “refurbished phones are previously owned devices that have been unused or lightly used and returned during the 30-day trial period.”

8 GB iPhone 3G:  $49

16 GB iPhone 3G: $99

Apple iPhone 3G

Correction added 9/11: This offer is a bit better than we originally thought. Despite specifically indicating in the press release that this new service applies to calls “from the Sprint network”, it actually applies to both inbound and outbound calls between two wireless phones.

Sprint announced today a new feature called “Any Mobile, Anytime” that builds on the concept of free mobile-to-mobile calling by offering free calls to any wireless phone on any U.S. carrier.    The new feature will be available to new and existing subscribers of Sprint’s Everything Data plans, which start at $69.99 for one line and $129.99 for a family plan.

MyRatePlan Analysis: This move is a bit of a yawner. Sprint is obviously hoping this feature will encourage more people to move to the higher revenue data plans.  They are promoting the feature as a way to break free of restrictive calling circles (where a subscriber can call a set number of ‘favorites’ free of charge, whether wireless or not).   We’re not sure the comparison is relevant, since Sprint is pre-determining what the calling circle is (all wireless phones) and it only includes outbound calls.    Granted 250 million cell phones is a big calling circle, but since most people probably don’t know if numbers they are calling are wireless or not, it is going to be tough for customers to translate this feature into anything actionable in terms of saving money.  We think it will make it more confusing for prospective customers to choose the right Sprint plan for their needs.

Bigger picture, however, this is one step closer to the day where all cell phone plans have unlimited minutes.

Starting September 6, new AT&T customers who purchase a smartphone or BlackBerry, as well as existing AT&T customers that upgrade to one of those devices will be required to purchase a $30 data plan with their phone.   This requirement puts AT&T in line with the other major carriers, all of whom have had this requirement for a while (although pricing varies by carrier).   Until now, AT&T had only required a data plan for the iPhone, one that is built into a separate series of plans available for that device.

MyRatePlan Analysis: The impact is likely to be fairly small, as most people who purchase a high end device would likely purchase data service to take full advantage of the features.  However, future customers (and those upgrading) who are mainly interested in having one of these phones for texting via the QWERTY keyboard may choose to instead purchase one of the many “quick messaging” phones offered by AT&T.  These will not require a data plan.    On the business side of things, BlackBerry may see a slight reduction in market share of AT&T’s business if customers forgo those devices to avoid the data plan.

There was an interesting column Thursday (July 23, 2009) about aggravating cell phone company policies by technology writer David Pogue of the New York Times. He argued the pros and cons of exclusivity agreements on cell phone devices (such as the iPhone with AT&T) and whether Congress should intervene to eliminate. However, the main thrust of the article is that if the government were to intervene, there are other areas, that affect many more people, that should be looked at first. The full article can be found here; it may require a subscription, however.

The remainder of the article is about other areas that Mr. Pogue thinks are possibly worthy of governmental inquiry. He takes a pretty populist view here, using the word “greedy” at least one time (and implying it in others), with many of the issues he raises. While we aren’t here to defend the carriers, and have no doubt they are out to maximize profits, we did want to highlight a few counter-arguments for the first three of his major points.

The summary of each of Mr. Pogue’s arguments is below; our thoughts follow.

Text message rates for all the carriers have doubled (to 20 cents per) in the last couple years. Even if the carriers aren’t colluding, there is no cost justification for this increase.

MyRatePlan Analysis: Text messaging is by far the most popular activity people use their phone for, after talking. It has become even easier to text of late as a large percentage of new phones, from budget to high-end smartphones, have full QWERTY keyboards, either ‘real’ or touch screen versions (or both). We don’t have U.S. data at hand, but strongly suspect that the 20 cents vs. 10 cents cost has had no effect on the increase in texting rates. The reason is that very few people pay the per-use rate for messaging; most are on a bundled plan offered by their carrier. (As an aside, if you are sending or receiving even one message a day and aren’t on a bundle, you are probably overspending.) The effect of the increase in per-use rates was to push more people to bundles. This benefits both carriers (increasing the guaranteed revenue/user) and subscribers (adding cost certainty to texting). The cost-to-serve argument is irrelevant (perceived value should drive pricing, not cost +), but if anything the low network cost to deliver messages has allowed the carriers to make it much easier for users to message at reduced rates (with bundles).

Since mobile party pays in this country (vs. other countries or our landlines where calling party pays), the cell phone companies are ripping us off by charging both parties mobile-to-mobile calls.

MyRatePlan Analysis: There is some truth to this, although the impact for carriers is decreasing with larger minute allowances and benefits such as “Calling Circles” (e.g., myFaves for T-Mobile) and unlimited mobile-to-mobile. However, we wanted to point out a historical reason that this is the case. When cellular came into being in the 1980s, it was extremely expensive, with bills averaging hundreds of dollars per month for those that had the service. Since the U.S. already had a well-established landline infrastructure based on calling party pays, and since a caller from a landline wouldn’t know if they were calling one of these new cellular lines when they dialed, the decision was made at the outset to charge the mobile party to spare landline callers the expense.

Part of your monthly bill actually goes to reimburse the carrier for the discounted phone you received when you sign up. When you’ve ‘repaid’ the carrier, your bill should drop.

MyRatePlan Analysis: We’ll save a discussion on the economics of the wireless industry for another day; and instead will just make three related points:

• Many people think the phone should be separate from the carrier/plan (i.e., I should be able to buy the phone I want and take it to the carrier I want service from). The subsidy model, with all its flaws, has allowed the wireless market to grow much more quickly than it otherwise would have. If it was to be eliminated, the price of phones, particularly higher end ones, would likely increase, perhaps substantially.
• The carriers’ unwillingness (until recently) to offer discounted phones to those renewing their contracts led to a perverse market where new customers were treated better than existing ones, causing a high defection (churn) rate to other carriers. Given the high cost of acquiring a new customer, we always found this a bit self-defeating for the carriers.
• Carriers are somewhat addressing the economic argument that Pogue makes, although from the back end, by reducing termination fees the closer one is to ending their contract. However, this also only happened with government prodding, so the the larger point that Pogue is making — why is this an industry that seems to mostly move in response to regulatory as opposed to market forces — seems one well worth exploring.

16 GB, $199, 32 GB $299. New iPhone 3G S includes a 3.2 megapixel camera with video capture, a compass and song recognition feature. Current iPhone 3G, 8 GB drops to $99!

Let MyRatePlan pay your activation fee!    For a limited time, MyRatePlan will rebate $36 for a qualifying single line plan or $72 for a qualifying family plan that is purchased via the site.  Since most carriers charge about $35 per line, this will offset the activation cost for up to two lines.   See rebate form for full terms, conditions and restrictions.

Use our rate plan or phone finder to find the best deal for your needs, and then save an additional $36 or $72 in this exclusive MyRatePlan offer.  Hurry, offer ends May 15.

T-Mobile has launched a number of improvements to its single and family calling plans, including its very popular myFaves plans. Already offering an attractive number of minutes at each price point (vs. its national competitors AT&T, Sprint, and Verizon), these changes further separate it from the pack.

1. Free mobile-to-mobile added on all plans $49.99 and above, including myFaves plans.
2. Introduction of Individual Plus plan which offers 1,000 minutes plus nights and weekends.  This plan sits nicely between the $39.99 1000 minute plan (no nights & weekends) and the $59.99 plan which offers 1,500 minutes with nights and weekends.
3. 500 minutes added to the family plans (myFave and regular) with 2,000 and 3,000 minutes (now 2,500 and 3,500).  For the two myFave family plans, the monthly fee was reduced by $10.
4. Creation of a promotional myFaves family plan — $89.99 for 1,800 minutes, a large improvement over the normal 1,000 minutes offered at this price point.

MyRatePlan Analysis: These are nice improvements for consumers.  T-Mobile was the last holdout on mobile-mobile among the major carriers.  Adding this feature slightly may reduce the value of myFaves for some of its customers, perhaps enough for them to switch over to a regular plan that offers more minutes for the same price.  However, the impact will be somewhat minimized as T-Mobile is only offering the feature on plans of $49.99 and above.

To see and compare all T-Mobile plans vs. those of other carriers, click here.

This special offer from AT&T expires March 22nd at midnight.   You must use this link or click the image below to get to the promotion. The link goes to the touch screen LG Vu; you can browse and switch to a different phone.

Details:   Order a new line of service with a two-year contract from AT&T and receive an automatic activation credit from AT&T.   No activation fee applies for up to a 5 line family plan.  You could save up to $140!     Must be new contract service.   Contract renewals,  upgrades, prepaid, add-a-line do not qualify.  Apple iPhone is ineligble.

AT&T Waived Activation Fee