T-mobile's misleading "makeover" pitch

Since late May, T-Mobile has been running an ad campaign that promises to help consumers find a wireless plan with the “best coverage and price—even if it’s not with us.” Online, an image of actress Catherine Zeta-Jones is the centerpiece for the T-Mobile web page that points bargain hunters to BillShrink.com, an independent website that evaluates your calling needs “against every national wireless plan.” From May through the end of July, T-Mobile says about a million consumers have clicked through to do a makeover and provided Billshrink with key information about their individual cell phone usage. 

But we found one problem: BillShrink searches for plans offered by only four national carriers—AT&T, Sprint, T-Mobile, and Verizon Wireless—which dominate the market with mostly contract plans and some prepaid offerings. So Billshrink doesn’t search “every national wireless plan,” a fact we confirmed with Samir Kothari, Billshrink’s co-founder and vice-president of products. 

Conspicuously missing are four national prepaid carriers—Boost Mobile, Net10, Tracfone, and Virgin Mobile—which together serve some 22 million price-conscious U.S. customers. 

That’s an important omission, because we found that Boost and Virgin typically had the lowest-priced deals when we compared 152 national plans, as we reported in the September issue of Consumer Reports in “Prepaid pays off.” We searched through national plans offered by eight big contract and prepaid carriers for a range of sample cellular consumers using various amounts of voice, text messaging, and mobile Internet services. Prepaid plans from Boost or Virgin were the least expensive in nine of 11 comparisons. 

Major contract carriers were cheapest in only two trials—for the sample families we studied that needed four phones. T-Mobile and Sprint tied for least-costly in one comparison, while Verizon was lowest-cost in another. Our comparison, in late June 2009, covered national, no-roaming-fee plans offered by eight carriers: AT&T, Boost Mobile, Net10, Sprint, T-Mobile, Tracfone, Verizon Wireless, and Virgin Mobile. 

The more restrictive, exclusionary search by Billshrink seems to reach a different conclusion more favorable toT-Mobile. T-Mobile can’t say what percentage of online makeovers found T-Mobile to be the cheapest. But this summer, the company conducted 9,500 mobile makeovers at its retail stores, street fairs, and music festivals in Chicago, Dallas, Philadelphia, and San Francisco by encouraging people to visit Billshrink, and “about seven of 10 of those found that they would save the most with T-Mobile,” says Tom Harlin, a T-Mobile spokesman. 

“T-Mobile tends to have the most economical voice plans, and Sprint has the cheapest plans for text and data usage,” Kothari says. He notes that Verizon and AT&T are the premium-priced carriers. 

T-Mobile fails to mention that primarily-prepaid carriers aren’t included in its “Makeover” comparisons. 

Billshrink does provide minimal disclosure in a small search progress window with a “Continue” button, but it’s easy to overlook. The box suggests a massive search is underway with the words, “Searching millions of plan combinations from these carriers.” Below that, tiny logos of the big four cell carriers are displayed. (The carrier box covered only two percent of the area on our 12 x 7.5-inch laptop screen, and got in the way of the search results we were intent on getting.) 

The more straightforward disclosure that Billshrink should provide up front is buried deep down in the “Any limitations?” FAQ on its Web site: “Our recommendations are computed by reviewing the plans available from the four national carriers: AT&T, Sprint, T-Mobile and Verizon….we do not currently include US Cellular, Boost, MetroPCS, Cricket and therefore you would not see recommendations from those carriers, even if they may ultimately qualify as lower-cost alternatives” [emphasis ours]. Still left unmentioned are big prepaid carriers Tracfone and Virgin 

Does this make the T-Mobile Makeover promise misleading? We think so. “Yes, prepaid plans do tend to be low priced, but to be used nationally there can be roaming charges,” says T-Mobile’s Harlin. But Boost, Net10, Tracfone, and Virgin are national and, with some exceptions at Tracfone, they don’t charge roaming fees. 

Harlin pressed on: “The vast majority of Americans are on post-paid plans, and that’s where the best value is. You might be able to get lower out-of-pocket cost with prepaid, but most times you’re paying more per-minute or per-use.” That’s not what Consumer Reports’ analysis typically found with the winning prepaid Boost and Virgin plans. 

Kothari also wouldn’t say T-Mobile is misleading. But he did not want to necessarily endorse T-Mobile either, when we asked him. Billshrink plans to add Boost to its analysis and expects Virgin to be next in line after that. Boost is owned by Sprint, which is also in the process of acquiring Virgin. 

Did you do a T-Mobile Makeover? Which carrier did Billshrink point you to as lowest-cost? Did you switch? What do you think now?—Jeff Blyskal

Comments

[brohicious]

"Conspicuously missing are four national prepaid carriers—Boost Mobile, Net10, Tracfone, and Virgin Mobile—which together serve some 22 thousand price-conscious U.S. customers. "

Those are MVNO's not carriers.

"The more restrictive, exclusionary search by Billshrink seems to reach a different conclusion more favorable toT-Mobile."
"Seems" to reach a different conclusion?

THis report is as biased as it accuses T-Mobile of being.

[Peter Pham]

Jeff,

I thought I'd provide some additional information to your post and I welcome a discussion with you via phone if you'd like as well.

We currently have the 4 major carriers because they represent 95% of the market with the 250M subscribers. As you mentioned the prepaids have 22K and as a small company we are doing the best we can to represent and build a great tool for the masses. It took us 2 years to build the underlying technology and we actually do go thru 10M plan combinations when making the calculations. And yes that's just with the 4 majors. The reason it's that high is that you have to consider all the plans available, all the add-ons (sms, data, night/weekend), family plans (multiple lines), and phones that have requirements (blackberry etc) it's very complicated.

The other thing is that the 4 majors are the only ones that provide street level detail of their coverage. One of the main features on BillShrink is not just the price of the plans but looking at the actual coverage at your home and work. We overlay this on google maps and give you a commute score. All the prepaid carriers you list below do not provide this information on their websites, they all just have maps that say yes they have coverage with no detail.

We are currently in discussions with some of the prepaid folks to get them into our site, but there is a tremendous amount of data that we need, and today they don't have the coverage maps which is a primary necessity for us but hopefully they will soon.

The other main feature of BillShrink is the ability to import your cell phone bill to get a detailed analysis of your calls, we look at what time those calls are made, what network they were made to, how many sms messages, data usage etc, to find the perfect plan based on your usage. The 4 major carriers have bills that we can analyze, but the prepaids do not have this that we know of.

We proudly are averaging a savings of about $300/year for people that come to BillShrink for their cell phone plan. We take customer service and feedback seriously so if anyone reading this has questions please do contact us from our website www.billshrink.com

Tom, we take our mission to be unbiased and provide transparency seriously and really hope we get a chance to talk and get a second chance with you, as Consumer Reports is a brand that we look up to and strive to become. If you notice we even take into account termination fees and activation fees which again no other site today does.

Thank you,

Peter Pham
CEO
BillShrink

[Liz]

This past weekend, my fiance and I took a trip up the coast of Washington. On our way back down the coast, we saw a car drive over an embankment...the car was going about 60. It literally flew off the road, flipped over, and landed in some brush.

Immediately, we stopped the car and jumped out to help. While my fiance was running down the hill to help the family in the car, I was trying to call 911 for help. To my utter amazement-I had NO cell phone service. We were not in a major city when this happened, but, we were not in the middle of the country, either. We were in an area that, according to T-Mobile's website, should've had cell service. (Both my fiance and I have T-Mobile service).

The driver of the car that flew off the road was able to get out of the car and move/walk around. He got out and tried using his cell phone as well; unfortunately, his cell service was through T-Mobile as well. We were terrified because there was at least 1 serious injury as a result of this accident and no way for us to get help. All the while, the young woman in the car with the worst injuries was going in and out of consciousness, asking "when can I get out...when is help coming?"

Luckily, 2 more cars saw us outside car, and stopped to help. A woman and her husband from California stopped, and tried their cell phone. They were able to get through to 911 to get police and an ambulance on the way. Their service was through AT&T. All I can say is THANK GOD for AT&T, or we would've been stranded, with no way to care for the injured. Had my fiance and I not stopped on the side of the road, no one would've known there was a car accident. The car that flew off the road was far enough down the embankment that you couldn't see it just driving past. There was no visible sign of a car accident from the road.

I'm sharing this story because I hope it makes you think twice about what carrier you want to go with. Don't just go with the cheapest, because they may not be there when you need them the most. I would've paid $1000 dollars a minute to get through to 911 on my cell phone when this happened, heck..I would've paid more than that...there is really no price I can put on it. T-Mobile was not there when I needed them...when that family needed them.

AT&T and Verizon, even Sprint, all have better service than T-Mobile, I can attest to this (not only from what happened over the weekend, but after having their service for a year). My fiance and I are switching carrier's immediately, because we do not want to end up in a situation like this ever again.

Had the other people not stopped, and been able to get through to the police, minutes...hours could've gone by before help arrived.

Please pass this story along to anyone who may have T-Mobile service, or who may be considering switching to T-Mobile. What's good cell service worth to you...what's it worth to be able to make a phone call when you need to the most...

[J L Williamson]

How about Consumer Reports misleading title for this article? The title makes it sound as if T-Mobile is carrying on a big deception.

[Doctor TracFone]

If BillShrink's goal is to assist consumers in lowering their bills, than they're doing an imcompletet job when they exclude prepaid options.

If coverage is a consideration (as Mr. Pham asserts), most prepaid providers (MVNOs) use the networks of larger carriers, especially AT&T and Verizon, so that's not really an issue. (MetroPCS has their own network, so coverage IS an issue for them... and their customers, unfortunately.)

But the savings -- and other advantages -- from prepaid offerings are quite real; flexibility, service, the ability to manage costs and more. And no bills!

TracFone, Net10 and Straight Talk are very worthwhile considerations for anyone seeking these advantages.

BillShrink ought to deal with them, too.

[Tatum Hawkins, Boost Mobile]

@brohicious Actually, Boost Mobile is not an MVNO, we are a wholly owned subsidiary of Sprint Nextel. In other words, we don't "rent" air time from larger carriers. Also with the pending acquisition of Virgin, they may become part of Sprint's no contract division, too. In our opinion, Boost Mobile and Virgin are accurately defined as carriers and deserve to be represented on BillShrink.com.

@peter pham According to research firm IDC as of 2Q09, there are approximately 277M cell phone users in the U.S. and nearly 20% of those users, or roughly 55 million people, are on no contract phone and service plans. And, many wireless industry analysts believe this segment will continue to grow. That's a major chunk of the population BillShrink.com is ignoring.

Also, Peter, who's Tom?

[Michael]

Yeah, this a very biased article with misleading title. I get a feeling that Verizon or AT&T made a $$$ contribution to Jeff and CR to write this piece of supposedly "independent" review. I have been paying my CR annual fees for many years to get unbiased opinion on products, but this article makes me question if I need to continue paying if CR publishes this type of material ....

If anything, the main issue seems to be BillShrink limitations which will probably be addressed in the future. I can only praise T-mobile for helping consumers get the best deal.

[Aaron P.]

Well see billshrink.com computes info based on their criteria and the data needed. Although i'm almost certain they get some kind of money for signing up a T-Mobile customer. And although i disagree regarding all that info billshrink.com says they need, it's a sub-par site at that. They only include the 4 major N.A. carriers. Here's an idea. The person reading this can get off their butt and GO TO THE STORES and see what they have. Then go to boostmobile.com & virginmobile.com and see what they have. And get what YOU need, not what someone else tells you, you can save an imaginary $300 on if you get them and are stuck in a 2 year contract with a crappy phone and disappearing cell reception.

[Wilmot]

Well I think it is a great shame that the other carriers are not included in the comparison but I can see why - because the contracts are so much more expensive than prepaid. I have a simple Tracfone which is great because there are no hidden charges, no roaming or extra taxes either. The best thing is that I can make long distance and international calls to over 100 country's for the same price as a local call so I can speak to family and friends all around the world.

[IanH]

I also think this T-Mo 'makeover' is misleading. I mean c'mon, If you're going to go around advertising that you'll find the best deal over all networks for cell users, give them the best deal. Not 'the best deal on my network'.

Quote:as we reported in the September issue of Consumer Reports in “Prepaid pays off.”
Hell yeah, prepaid pays off. I ditched my contract after reading that article and now use Straight Talk, a great unlimited plan on Verizon's network. I settled for this plan 'cause of the low price ($45) and the fact that in my area VZ is still the best network to be on.
I couldn't get ANY contract that cheap (after service fees and taxes), never mind unlimited plans.

[James]

In my opinion BillShrink should be equivalent to all providers.
My prference for example is Net10. They offer low prices with non of the contract catches and hidden costs. 22million users understand prepaid is the best option so it is an option Billshrink should offer for a far choice.

[Tess]

Another great thing that Net10 offers is their International calls.
The rate is only 15 cents per minute and thats only 5cents more than ordinary calls. so a bargin like that should certainly come into play for choosing a mobile provider.

[Sa-Rai Townsend]

Hello! I have been a faithful Virgin Mobile customer for about5 years now. I have fount that their prepaid plans are way better than those of AT&T, Sprint, Verizon and T-Mobile. For only about $70.00 a month, I get unlimited everything- text, calling, and internet. I looked at other phone companies like Cricket and T-Mobile, but my brother and my mom who have those services are always complaining about them. My mom is now switching over to Virgin Mobile because of all the problems that she's been having with T-Mobile.

[Mad as Hell]

T-Mobile is full of deception, I believe that their Contract Flex Plan is illegal, has any one had any problems with the charge of $200.00 per line termanation fee that they charge on pre-paid services. I have been lied to by T-mobil concerning this issue.