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Why Is T-Mobile So Expensive? (10 Reasons)

By William Butterworth March 11, 2023

Facade of the T-Mobile USA regional headquarters

 

T-Mobile offers phone, TV, and internet services.

You can even use the company for your banking needs.

However, you’ll find that T-Mobile’s prices tend to be on the expensive side.

 

Why Is T-Mobile So Expensive? (10 Reasons)

T-mobile logo on the smartphone

 

T-Mobile has several plans for both individuals and families, with some of the highest plans costing around $170 a month.

T-Mobile is expensive because it offers unlimited phone plans, discounts, price lock plans, connections with streaming services, banking savings, and spends a good amount of money on marketing.

Let’s look at these and some other factors in more detail.

 

1. Unlimited Phone Plans

smartphone with T-Mobile app on the screen

 

T-Mobile offers a series of different phone plans at different prices.

One of its best phone plans is its unlimited option.

With an unlimited phone plan, you’re able to receive unlimited data, talk, and text.

This means that T-Mobile doesn’t charge you if you happen to go over a certain cap.

That can save you a good deal of money if you find yourself on your phone a lot.

However, the fact that you’re saving money means that T-Mobile isn’t making money.

Some phone companies might rely on extra charges to earn more profit.

With an unlimited plan, T-Mobile is unable to gain as much money as it might like from the plan.

This makes the company expensive because it means it has to draw funds from elsewhere.

That usually means higher prices on other plans or on the plan itself.

Since it’s a monthly payment, T-Mobile can earn what it believes it should earn through extra charges by having a high price on the monthly payment, to begin with.

T-Mobile is expensive because of any lack of extra profit it misses out on through unlimited plans.

 

2. Senior And Military Discounts

Military Discounts

 

If you’re 55 or over or served in the military, then you can also receive a steep discount from T-Mobile.

T-Mobile recognizes that seniors and those approaching the senior phase of their lives don’t always earn that much money.

As soon as seniors retire, they may be entirely reliant on social security for funds.

Not everyone can put together a sizable retirement nest egg.

As such, they have to be careful of how much they spend.

Certain companies looking to serve the elderly in their communities tend to offer discounts.

T-Mobile is one of those companies.

It also looks to do its part to thank military personnel for their service.

Military veterans are also able to receive a discount on T-Mobile’s services.

While both of these discounts are great to have, it also means that T-Mobile isn’t making as much money on its products and services.

The more veterans or people over 55 who use T-Mobile’s services, the less profit the company is generating.

That means that T-Mobile may need to ensure its prices elsewhere are still high enough that it’s able to reach its financial goals.

T-Mobile is expensive because of the reduced profit it receives from seniors and military veterans.

 

3. Price Lock Plans

hand holding a smartphone with T-Mobile app

 

When new customers sign up for one of T-Mobile’s unlimited plans, they also receive the benefit of having their price locked.

This means that T-Mobile won’t increase the plan’s payment price.

The customer can enjoy whatever price they sign up for originally for as long as they remain a T-Mobile customer.

That also means that the customer can enjoy unlimited data, text, and talk at that price virtually forever.

That’s a problem that some customers have with other companies.

They’ll agree to pay a certain price for a plan, then find themselves paying more and more each year.

A company might increase the plan’s price to keep up with inflation or just to generate higher profit margins.

A locked-in price guarantees that the individual will continue to pay the same price.

That said, taxes might increase, which could raise the price of their plan marginally, but it’s a slower creep than a non-locked plan.

While this is great for customers, it also means that T-Mobile isn’t making as much money as it could.

If it didn’t offer a locked plan price, then it could slowly raise rates over time to generate more profit.

Since it’s not doing that, the company has to ensure it makes enough profit from higher prices.

T-Mobile is expensive because of its price-lock plans.

 

4. Free Streaming Services

Online movie stream with mobile device

 

In an effort to attract more people to its platform, T-Mobile has partnered with some popular streaming platforms.

Through your T-Mobile service, you can receive certain streaming services for free.

Some of the benefits only last a year or for a few months.

Others require you to have two lines or more at T-Mobile.

If you qualify, you can gain access to Netflix, Apple TV, and Paramount Plus.

It also offers reduced prices for other platforms like YouTube TV, Pluto TV, and Philo TV.

Customers benefit because they can enjoy their favorite streaming shows while paying a reduced price for them.

T-Mobile benefits since it helps the company attract more customers to its services.

That said, such partnerships don’t come without costs.

T-Mobile likely covers the costs of certain deals themselves.

Since the company is spending money to offer this perk to its customers, it means the company needs to generate revenue to cover the expense.

That usually means higher prices on its plans and other services.

Depending on how expensive your phone bill is, you may even find yourself paying more for the streaming service than if you had just signed up for it separately.

T-Mobile is expensive because of the expenses it incurs by offering streaming platform deals.

 

5. T-Mobile Tuesdays Costs

T-Mobile app on the smartphone screen

 

Another perk you can enjoy as a T-Mobile customer is T-Mobile Tuesdays.

If you have the T-Mobile app, you can receive access to perks, benefits, and even discounts.

For example, through Pluto TV, you can receive exclusive viewing experiences and even have access to popular movies.

T-Mobile can also offer a limited selection of exclusive tickets to various concerts and live events.

Another perk is steep discounts at certain theme parks.

Sometimes, you can even receive a 30% discount on admittance to a theme park.

Besides perks, T-Mobile Tuesdays can give you travel discounts as well as free items.

While these are great benefits for customers, it means that T-Mobile is taking on some sort of expense to offer them.

In an effort to attract more people to its services, the company is spending a good amount of money to offer such premium advantages.

To make up for those expenses, it has to charge high prices for its plans and services.

T-Mobile is expensive because of the costs it gains through its T-Mobile Tuesdays.

 

6. iPhones With Plans

Man using New iPhone 13 Pro

 

One of the primary reasons certain phone plans are as expensive as they are is that you’re paying for the phone through the plan.

For example, a lot of phone companies, like T-Mobile, will offer a monthly plan that includes a “free” phone.

In reality, the high price on the plan means you’re paying for both the phone and the service.

Other plans will strictly state that you’re buying the phone with the service.

Whether it’s advertised or not, if a plan comes with a brand-new phone, then it’s going to be expensive.

That’s because phones, particularly iPhones, are quite expensive.

Since you’re not paying for the phone all at once, you’re essentially paying for it in installments.

T-Mobile wants to earn its share, too, so there’s a certain amount of interest that you’re paying each month, too.

The newer the phone is, the more expensive the plan is likely going to be.

You’ll also continue to pay that amount even after you’ve paid off your phone with some plans.

As such, your monthly payments remain high despite having paid off the phone twice over.

Since some plans are family plans, if anyone gets a new phone or does something that adds more to the plan, then you’re going to face even higher prices for that as well.

T-Mobile is expensive because it adds the cost of a new phone to some of its plans.

 

7. No-Fee ATMs

ATM EPP keyboard

 

T-Mobile isn’t just involved in phone plans.

It also has its own banking service.

T-Mobile Money is an online bank aimed at removing typical bank fees.

One of the fees that people tend to have to pay a lot is ATM.

Banks typically partner with an ATM company to give its members access to those ATMs without a fee.

The member can use a select type of ATM usually at the actual bank.

If they use an ATM that the bank doesn’t partner with, however, then they’re usually hit with a fee.

The fee differs from bank to bank and ATM to ATM, but they can be quite high.

You might find yourself paying a handful of dollars extra just to take out some money.

T-Mobile banking wants to change that.

If you use T-Mobile Money, you can access more than 55,000 ATMs that don’t charge you a fee.

That said, it has to be one of those specific ATMs.

Otherwise, you’ll face a fee all the same.

However, if you do happen to live close to one of T-Mobile’s ATMs, then you can enjoy using it without having to pay extra.

This can help you save money in the long run.

For T-Mobile, it’s a lost opportunity to make extra money.

Since the company isn’t collecting as much money as it could through ATM fees, it needs to have high prices on its other products and services.

T-Mobile is expensive because it doesn’t charge ATM fees.

 

8. $50 Overdraft Coverage

showing cash

 

Another benefit of using T-Mobile for banking is that the company will cover you for $50 if you end up with an overdraft.

An overdraft occurs when more money than you have in your account ends up leaving it.

For example, if you have $200 in your account and you buy something that costs $250, then you have a $50 overdraft.

There aren’t any funds in your account to cover the charge.

Some banks will deny the purchase from occurring depending on your overdraft preferences.

Other banks will charge you a high fee for overdrawing your account.

T-Mobile will spot you $50 if you accidentally overdraw your account.

Since this costs the company money, it has to ensure it has enough money to do so while still maintaining a profit.

It does so through high prices.

T-Mobile is expensive because it offers $50 overdraft coverage which increases its costs.

 

9. Termination Fee Payments

word Fees

 

Some people can’t switch to another provider because they’re locked into a contract.

Terminating the contract usually results in a termination fee.

That fee can be quite expensive to pay.

T-Mobile is willing to help pay termination fees if a customer wants to switch to its service.

As such, the company will actually pay you to terminate your contract with a competitor and sign up for T-Mobile’s service instead.

This also results in T-Mobile taking on higher costs.

Since it’s taking on higher costs, it needs to set high prices to cover those costs.

T-Mobile is expensive because it offers termination fee payments.

 

10. Marketing Costs

Cropped view of businesswoman using smartphone in office marketing

 

A final reason T-Mobile is expensive is marketing costs.

The phone plan business is highly competitive.

Although there are only a few major phone plan carriers in operation, the competition between them is still quite rigid.

As such, T-Mobile has to spend a good amount of money reminding people to choose its services over its competitors’ services.

The more money the company spends on its marketing, the higher its operating costs.

To cover those costs and fund its marketing, it needs high prices.

T-Mobile is expensive because of the cost of its marketing budget.

Filed Under: Internet

About William Butterworth

William Butterworth is a professional writer of both compelling content copy and fiction. When he isn't rescuing his faithful dog's ball from beneath the sofa, he's busy with his friends playing Dungeons and Dragons or various other nerdy past times. A lover of books, tea, and 1800s fashion, he often feels a small step out of place amid modernity. In the words of Tolkien, all those who wander may not be lost, but William certainly is.

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