How Do U.S. Wireless Carriers’ iPhone 6 Plans Stack Up?

+6.53%
Upside
39.93
Market
42.54
Trefis
VZ: Verizon logo
VZ
Verizon

Increasing competition in the U.S. wireless industry has benefited customers the most, with more options to choose from and competitive monthly rates. However, the innovative plans offered by carriers has also made it very complicated for users to choose between different service providers. Starting with Sprint (NYSE:S), all major providers – Verizon (NYSE:VZ), AT&T (NYSE:T) and T-Mobile – have tweaked their monthly plans in the last few weeks to attract subscribers, and the recent launch of Apple’s new iPhone 6 and 6 Plus handsets has intensified this price war.

See our complete analysis for AT&TVerizonSprint

In this article, we compare the service plans of different carriers for individuals willing to buy the iPhone 6 without a contract. All prices mentioned below are based on the iPhone 6 16 GB model, which has an unsubsidized retail price of $649.99. In addition, “Monthly Plan Charges” for all carriers reflect costs for 2 GB of high speed data with unlimited talk and unlimited text. However, both Sprint and T-Mobile are currently offering unlimited data as part of their $50 plans, and therefore subscribers can use as much data as they want and have no risk of inflated bills. It should further be noted that while Sprint is offering unlimited 4G data, T-Mobile offers just 1 GB of 4G LTE data and the rest is lower speed 3G. The monthly rates of T-Mobile’s plans increase with the amount of 4G data as part of the total unlimited data offerings. Verizon and AT&T do not currently have unlimited data plans on offer. The prices mentioned below are exclusive of taxes.

Relevant Articles
  1. Up 25% Over The Last Three Months, Will Verizon See Further Gains Following Q4 Results?
  2. Down 50% From Covid Highs, Will Verizon Stock Recover Post Q3 Results?
  3. Will Verizon Stock Recover To Its Pre-Inflation Shock Highs?
  4. Verizon Stock Has Over 60% Upside If It Recovers To Its Pre-Inflation Shock Highs
  5. Will Verizon’s Postpaid Woes Continue In Q1?
  6. Verizon Stock Had A Tough 2022. Will Next Year Be Better?

 

Verizon AT&T Sprint T-Mobile
Down Payment/Upfront Taxes $52 $10
Activation Fees
Monthly Line Access $30 $25
Plan Name Edge Plan Next Plan Easy Pay Jump
Monthly Plan Charges $50 $40 $50 $50
Plan Offering 2 GB 4G Data+Unlimited Text & Voice 2 GB 4G Data+Unlimited Text & Voice Unlimited 4G Data+Unlimited Text & Voice 1 GB 4G Data+ Unlimited 3G Data+Unlimited Text & Voice
Monthly Handset Cost $32.49 $27.09 $27 $27.08
Handset Payment Period 20 Months 24 Months 24 Months 24 Months
Upgrade Possible After 12 Months 18 Months 12 Months 12 Months
Upgrade Fee $5
Limited Time Offer -$20 per month
Total One Time Cost $52 $10
Total Monthly Cost $92.49 $92.09 $82.09 $77.08
Current Special Offers 1 GB Data Extra Free for 2 years + 25 GB Free Cloud Storage 50 GB Free Cloud Storage “iPhone for Life” Lease Plan WiFi Calling + Free Music Streaming + Free International Data & Texting
Total Cost Over 2 Years $2,090 $2,210 $2,022 $1,860

 

As visible in the above table, T-Mobile offers the lowest cost over a two-year period for new customers buying the iPhone 6 16 GB model , followed by Sprint, Verizon and AT&T. However, as mentioned before, T-Mobile offers only 1 GB of 4G data at this price. If users opt for 3 GB of 4G data on T-Mobile’s network, the total cost over two years comes out to be $2,100, which is slightly more expensive than Sprint and Verizon but still cheaper than AT&T.

Compared to other carriers, it would be fair to say that Sprint leads the way in innovation in iPhone pricing plans. Apart from the Easy Pay option, the carrier is offering an “iPhone for Life” payment plan wherein the customer can lease an iPhone 6 at a cost of $20 per month for two years, with the plan charges remaining the same at $50 per month. After two years, the customer will be able to upgrade to the latest version of the iPhone, again on a monthly lease basis. Although the customer will not own the device under this plan (and will therefore forgo the potential trade-in value when upgrading), the total cost over two years comes out to be only $1,680, which is significantly lower than all other service providers.

Differences in Network Quality

Before jumping to conclusions about which network offers the best value for money, users should also take note of the fact that Sprint and T-Mobile lag behind the market leaders in network coverage, network quality as well as network speed. At present, Verizon and AT&T lead the U.S. wireless market with about a 34% share each, followed by Sprint and T-Mobile which have shares of 14-16% each. ((Report: T-Mobile overtakes Sprint in Q1 as No. 3 U.S. smartphone buyer, Fierce Wireless, May 22 2014)) [1] (Also read Verizon’s Top Spot Threatened As AT&T Catches Up)

According to the latest mobile network performance report by RootMetrics, Verizon leads the U.S. carriers in overall performance with a score of 80.5/100, closely followed by AT&T at 79.5/100. The only parameter where AT&T lagged significantly behind Verizon was network speed, likely due in part to the latter’s new upgraded LTE service, XLTE. Smaller players T-Mobile and Sprint are a distant third and fourth in the latest report, with scores of around 70/100 each. Therefore, the above price comparison can also be looked at from the perspective that the smaller players are trying to lure customers with highly competitive data plans and pricing, while the market leaders are focusing more on network quality and retaining their high-ARPU (Average Revenue Per User) customers. [2] (Also read Network Quality Differentiates Top U.S. Wireless Players)

View Interactive Institutional Research (Powered by Trefis):

Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
More Trefis Research

Notes:
  1. T-Mobile now #1 prepaid carrier, overtakes Sprint, Tmo News, Aug 6 2014 []
  2. Midyear Mobile Network Performance Report, RootMetrics, Aug 18 2014 []