T-Mobile's 'Get Out of Jail Free Card:' they'll pay your early termination fee to switch

T-Mobile's 'Get Out of Jail Free Card:' they'll pay your early termination fee to switch

T-Mobile's brash, outspoken CEO John Legere took the stage at CES today to unveil the latest phase of the company's successful "Uncarrier" program: what the company has billed as a "Get Out of Jail Free Card." T-Mobile will pay you as much as $650 per line to cover your early termination fees (ETFs), if you break contract and switch service from AT&T, Sprint or Verizon.

"Customers tell me, 'I wish I could switch but I'm handcuffed,'" said Legere. He called such fees "anti-consumer" and said they're another form of subsidy for the wireless industry.

Beginning Thursday, T-Mobile will give up to $300 in instant credit if you switch to their service and get one of T-Mobile's postpaid "Simple Choice Plans." What's more, once you get your final bill from your carrier, mail it to T-Mobile and upload it to their web site. T-Mobile says they'll give you an additional payment equal to those fees, up to $350 per line. There's a hitch: you have to trade in your old phone and purchase a new T-Mobile phone and port your phone number too.

The deal is good for up to five lines that are part of a family plan. "That's a multi-day trip to Disneyland," said Mike Sievert, T-Mobile's chief marketing officer.

Additionally, T-Mobile now claims it's the fastest LTE network in the country, surpassing AT&T, which also makes that claim. The company bases its claim off of the aggregated results of Speedtest test results carried out by T-Mobile customers, comparing their results to the results of Sprint, Verizon and AT&T customers. Speedtest is a popular benchmarking web site that enables you to measure the upload and download speeds of your Internet connection.

Of course, T-Mobile LTE coverage varies widely. And sadly, for some customers, 4G LTE speeds are still a pipe dream - though T-Mobile now says its LTE network covers 270 million people nationwide. To check T-Mobile coverage in your area, visit their coverage map page.

Shoddy coverage stands to change, according to Neville Ray, T-Mobile chief technology officer, thanks to a recent arrangement with T-Mobile rival Verizon. Ray said that the 700 MHz spectrum deal that T-Mobile announced with Verizon earlier this week will improve the company's network footprint, giving it additional bandwidth and better coverage inside buildings and in rural areas where coverage is sparse.

"I can't tell you we're going to do it overnight," said Ray, but T-Mobile plans to make huge strides building out its network with that spectrum in 2014 and 2015.

Are you tempted to switch to T-Mobile if you're not going to have to pay an ETF with your current carrier? Is Ray's promise of improved network coverage inside buildings and rural areas reassuring? Sound off in the comments - I want to hear what you think.

Check out our play-by-coverage of the T-Mobile press conference, and make sure to visit our #CESlive Superpage for all the news from CES.

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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Reader comments

T-Mobile's 'Get Out of Jail Free Card:' they'll pay your early termination fee to switch

31 Comments

You're right, but by making it credits, T-Mobile is removing a very important pain point of an ETF - having to pay a steep fee and then get hit with more fees to start another service. You still have to pay your old carrier to leave, but you're making it up by not having to pay T-Mobile an equal amount.

Call me when I don't have to pay $750 for a new iPhone. When will people learn that prepaid isn't worth it

You do know that you don't have to pay $750 up front if you don't want to, right? You can pay in monthly installments, just like on any other carrier, except that when you've finished paying off the device, the cost of your plan drops - unlike with every other carrier.

Correct. People are stuck in the old model of getting a "cheap-er" phone and then paying big bucks for their plan. Choosing cell phone service should not be like paying for a car loan over 2 or 3 years, but people have been hoodwinked for years by this strategy. For years, the cell phone giants have been laughing all the way to the bank, until T-Mobile went after their customers. By the way, I am a happy T-Mobile customer.

Try $600 total (on an Equipment Installment Plan), $0 down + $25 x 24 months. You can pay it off at any time and save a bit on interest. It has been a while since I've looked, but I'm pretty sure an unlocked one from the Apple site is about $650.

The service issues are probably a bigger blocking point for most people. I get pretty good coverage in my area, but I understand that there are areas where that isn't the case.

(I can't post the link to T Mobile's site since the commenting system is considering it spam. You'll have to go to the site yourself and click the image of the iPhone 5s to verify.)

I paid $800 for a new iPhone 5S + $30 per month (5GB data) x 24 months = $1,520.

Att - $299 for the same phone + $135 per month (4GB data) x 24 months = $3,539.

I'm pretty sure I'm coming out on top with Tmo.

Prepaid can be worth it. It all Depends on what Smartphone you get, the price tag, and how long you plan to upgrade. An iPhone can easily last 3 years, a Nexus 5 (which is cheaper), can easily last 2 years if they are well taken care of. Obviously for the type of person that wants to throw away $649+ every year to have the latest iPhone just proves that the money management is being done wrong so prepaid isn't the solution (Hey, to each their own). And it even seems that even the carriers don't even wanna deal with that much longer. It doesn't make them right for their actions, but hey let the wallets speak.

Anywho, I will be finding out just how much everything will be in total and how long it'll take to actually see money being saved before I make a decision to move my family to T-mobile, or just leave them at AT&T until the contracts expire in September and let them go their separate ways. But I am 1000% certain that the days of signing a cell phone contract are OVER!!

You're paying that much for a new phone one way or another. With ATT it's higher monthly rates, with T-Mobile it's over time.

This is a very tempting offer.

Man I wish competition was this good in Canada. I know it's not the best but I'd take this over the Rogers, Bell, and Telus monopoly and collusion.

This is a new thing here. Normally we are just as screwed as you. My issue with T-Mobile is coverage otherwise i would dump Verizon in a second.

Hey he needed something to bash att about. It's easy to talk when you're the little guy, but wish they would up their coverage rather than pay to buy users.

Thats because they didn't go far enough.. ATT kicked themselves by only go part of the way at $450.. T-Mobile went all the way to the average total cost of a new high-end smartphone + ETF ($300 + $350) You end up paying full price of phone, but really, even with 24 month cost of phone, T-mobile is cheeper than ATT/Verizon. Plus, with the total credits, you should end up breaking even, depending on trade in value of phone.

Trade in value of phone is what I want to hear about.. thats the weak point.. they traditionally low-ball everything except the most recent phones.

I'd love to switch to T-Mobile, but the coverage just isn't there yet. I would get Edge where I live and get NOTHING where I work (a high school in rural SC). Verizon is currently the only network that has the coverage I need. If T-Mobile really builds out their network in the next couple years, I might make the jump in 2016. We'll see.

Yep, tmobile is junk just like Sprint. They can do all the offers they want but it's still not worthwhile.

I was with tmobile for 8 years and then switched to att and have been with them for the past 5 years. The service for both of them are pretty good in my area but ATT is kinda pricy but they do have better service than T Mobile. However the benefit of this offer by Tmobile is that this will now force ATT to give customers (at least those in the know) better deals. I was able to get my plan (price) lowered (albeit I have to call in every year to renew the promotion) when Tmobile introduced the 50$ unlimited plan. All you do is call in and make sure to go straight to the retention dept and just ask how much your ETF will be if you want to leave and they will then ask why and blah blah blah you explain Tmobile's new deal and cheaper plans which the ATT customer rep has already been preped and trained for and when they counter just say no until the price is right for you. In all honesty I have tried to leave att several times but they just keep making it worth my while to stay (and then they do something dumb like get rid of standalone data like the 2GB, and 3GB to this shared data crap). AT&T is a little faster but Tmobile has made huge gains and it really boils down to price points (for me at least) It will be interesting to see AT&T counter this offer. While there will be those who say "Well AT&T has already countered this by offering Tmobile customers up to 450$ if they switch it does not take into fact the customers who have been with AT&T already for some time and are the one's who make them the most money.

Capitalism go figure.....

This is sweet, but here in Vegas I've had horrible coverage with tmob. I'll wait till they build out their network more.

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Coverage>>>> price everyday. Phone is only as good as the network. Is the saving worth the risk of potentially not having service in an emergency?

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This is very, very tempting. I tried T-Mo for about two months last year. I was not completely satisfied with my coverage, compared to what I had on VZW. In the end, I switched back to VZW. I desperately want to lower my monthly bill. A comparable plan would cost us $100 (before taxes and fees) on T-Mo, versus the $160 (before taxes and fees) on VZW. Legere has my ear, I'm listening.

I used to have AT&T MVNO's for the longest time, then made the switch to actual AT&T service. The service is great here in Los Angeles was great at any given day, but the cost was killing me. After a year of paying close to $170 for 2 lines on the Mobile Shared Plans, I made the switch to T-Mobile. So far the service has been great here in LA. An occasional bad spot here and there but nothing to complain about. I hated it when I went out of LA to the southern San Joaquin Valley. Nothing but EDGE. As of now I am OK with it and am saving over $50 from AT&T. But, and the only but... is if T-Mobile decides to merge with Sprint, then I will have no choice but go back to AT&T. For now, I am happy, and so is my wallet!

I'm switching for the savings. simple, verizon with 5 lines and 4gb shared = $270, tmobile 5 lines is $110. My kids don't use much data and I could care less about having LTE all the time, if the coverage is bad and I can still call and text, I don't see the issue, there's so many places with free wifi, I think i'll be ok with the savings.

With the new plans from AT&T, T-Mobile now is only a little bit cheaper. However on Staten Island at least, their coverage sucks. While AT&T coverage is really good. Even in Manhattan AT&T's LTE is faster then T-Mobiles. Plus AT&T works much better in doors. I tried T-Mobile late last year (October - December) and they just don't have good coverage.

When you talk to their Customer support, they say ah our coverage map shows you have excellent LTE/4G coverage, where in reality, at my house (inside and outside and on the street) we had 0 coverage. Every residential house I went to had 0 coverage (family and friends), no signal. While with AT&T I have 3 bars of LTE at home, and 5 bar LTE coverage all the way to work.

If their coverage was as wide as ATT or Verizon it would be appealing to me, but I live in a pretty decent sized city in the midwest and their coverage here is atrocious, and it's worse where we go in DFW where my inlaws live. So still not much of an incentive. FWIW, AT&T bought me out of Sprint without any grandiose promises made at CES. They said they do it all the time.

T-mobile is showing they somewhat understand the consumers issues with the carriers. It may not be perfect, but it's a start in the right direction.

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I made the switch. It got family and I out from Sprint. Getting great speed too. Doubling Sprints speed. Very happy!!!

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