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T-Mobile has a new ‘unlimited’ data plan that’s $10 cheaper – but there’s a catch

Published Aug 6th, 2018 5:01PM EDT

Early on Monday morning, T-Mobile launched its new Essentials plan, a mildly stripped-back version of its flagship “unlimited” plan, T-Mobile One. The plan is similar to pared-back “unlimited” plans that have recently been debuted by Verizon and AT&T: You get mostly-unlimited mobile data, talk, and texts for less than the flagship plan, but lose additional extras like high-speed hotspot data and international roaming. Customers on the Essentials plan will also be the first to be throttled when T-Mobile’s network is experiencing congestion, so it’s probably not a great buy for users who need a guaranteeably fast connection.

There’s one other detail about the Essentials plan that merits attention: the sticker price doesn’t include taxes and fees, unlike the T-Mobile One plan. That’s a hypocritical move from T-Mobile, a company that has raked its competitors over the coals over the added cost of their taxes and fees, but it also makes the Essentials plan less of a bargain than it might seem.

In return for a discounted price, Essentials customers lose the free Netflix that comes with the One plan, as well as the free high-speed roaming in Canada and Mexico, and the free low-speed roaming in most countries around the world. Most importantly, the company says that “during times and places with heavy network demand, Essentials customers may notice slower speeds than other customers.” Other than that, the Essentials plan includes much of the same stuff as T-Mobile One, including unlimited data (up to a 50GB deprioritization limit), 3G mobile hotspot, and 480p video streaming.

The Essentials plan is only modestly cheaper than the One plan, especially for a single line of service. For one line, the Essentials plan costs $60, while One costs $70 (including taxes). How much you pay in tax will vary wildly from state to state, but an analysis from the Tax Foundation in 2017 suggests that the nationwide average is 18.46 percent. Using that average, a single line of T-Mobile Essentials would cost $71, which is more than a single line of T-Mobile One! In T-Mobile’s home state of Washington, the combined federal, state, and local rate is 25.6%, which is enough to bring a single line of T-Mobile Essentials to $75.

The savings get a little better when you add two lines of Essentials, which costs $90 ($106 with the nationwide average tax). Two lines of T-Mobile One costs $120 including tax, so you’re saving $14 a month with Essentials — although two lines of T-Mobile One comes with a free Netflix subscription, and when you add the price of that to the Essentials plan, it’s nearly a wash. Four lines of Essentials works out to $120 before tax ($30 a line), but $150 including that average nationwide tax. T-Mobile One is $160 for four lines.

A quick note on those tax numbers: they’re just rough estimates based off Tax Foundation data. Wireless companies (including T-Mobile, which was contacted for this article) don’t provide any guidance on average taxes, given the vast difference in how the taxes and fees are calculated and applied in different states. Oftentimes, the only way to find out what you’d actually be paying in taxes and fees is to start the application process for a new line, which requires proof of residency and is therefore difficult to do. The tax numbers in this article are a best-guess estimate and will undoubtedly be different based on your location.

Costs aside, it’s a bad look for T-Mobile to be adding a new “unlimited” option that doesn’t include taxes and fees. In January 2017, T-Mobile made a huge deal out of rolling taxes and fees into the price of its One plan, and all of the arguments it used back then against taxes and fees still apply. T-Mobile commissioned a survey in which “a whopping 86 percent of respondents “it is wrong for the price on your monthly wireless bill to be more than the advertised price” and said “wireless carriers should include taxes and fees in the prices they advertise,” T-Mobile crowed in its press release.

On one hand, it does seem unfair to be taking T-Mobile to task for not including taxes and fees, something that every other wireless carrier does. But T-Mobile has rebuilt its brand over the last five years by calling itself the “Un-carrier” and railing against things that most people hate, like additional taxes and fees or offering a confusing variety of different plans. So when T-Mobile makes the kind of move that it was decrying 18 months ago, it’s only fair to judge it by its statements back then.