After eliminating subsidies and service contracts a couple years ago, T-Mobile has invented a new kind of lock-in with its Score program.
With Score, you pay $5 per month on top of your existing T-Mobile bill in exchange for a discount on your next upgrade. After six months, subscribers can get an entry-level 4G smartphone for free. After 12 months, subscribers get a discount on any phone in T-Mobile’s lineup.
On the entry level, for example, T-Mobile is offering the Alcatel OneTouch Evolve 2 (regularly $79) at no extra charge after six months, for a discount of $49. The discount after 12 months depends on the phone, with T-Mobile listing $100 off Samsung’s Galaxy S5 and $150 off Google’s Nexus 6 as examples. (The actual discount is at least $60 less than the MSRP of the new phone after factoring in the extra monthly payments.)
Why this matters: While Score may sound like a good deal, it’s not much different from the subsidized plans that T-Mobile and its competitors have been phasing out over the last couple years. It just works in reverse, with the discounts only coming after you’ve been paying the higher monthly costs. Either way, the result is the same: Signing up for Score makes it harder to switch carriers, as you’d basically be throwing money down the drain with each untapped installment.
Scoring the economics
Let’s say you’re a loyal T-Mobile user who has no intention to switch carriers anyway. Whether Score is actually a good deal will depend on the phone you get and how committed you are to regular hardware upgrades.
Consider, for instance, T-Mobile’s offer of $100 off the Galaxy S5, whose listed price is $610. The total price you pay, minus the $60 in monthly installments, would be $570. That’s better than nothing, but right now you can buy an unlocked Galaxy S5 on Newegg for $520, pop in a T-Mobile SIM card, and avoid the Score program altogether.
Score is going to make the most sense for new phones that aren’t being discounted elsewhere, and for phones that don’t usually sell for less than the list price, such as the iPhone and Nexus 6. But keep in mind that waiting any longer than 12 months erodes the discount you’ll get.
On a related note, Score takes away one of the biggest advantages of having an unsubsidized plan, which is the ability to keep your phone for a long time and reap significant monthly discounts. With Score, you’re under constant pressure to upgrade your phone at full price, which means you never get to the point where you’re paying less than the subsidized rates of a few years ago
As the improvements in each new phone generation become less significant, it’s never been a better time to slow the upgrade process. For most people, that makes Score—despite the “Un-carrier” marketing around it—a non-starter.
This story, "T-Mobile Brings Back the Subsidy (Sort of) with Score Discount Program" was originally published by PCWorld.