T-Mobile US yesterday made an offer that is seemingly too good to refuse. AT&T, Verizon, or Sprint customers can jump to the underdog "Un-carrier" and get a lower monthly bill, a phone trade-in credit of up to $300, and T-Mobile will pay off their early termination fees (ETF). T-Mobile CEO John Legere celebrated the offer by calling his competitors' offerings "horseshit."
But like anything, it's not a slam dunk for everyone. If I were to switch from Verizon Wireless to T-Mobile, for example, I'd end up paying T-Mobile $150 more than I would pay Verizon over the next two years. Here's why.

Un-carrier marketing, real carrier restrictions

It comes down largely to the fact that, as we reported yesterday, T-Mobile's promise to pay off early termination fees is contingent on customers trading in their old phones and purchasing new ones from T-Mobile. While you can still bring your own phone to T-Mobile if it's unlocked and compatible with the network, if you do, T-Mobile won't pay off your ETF.

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I have an iPhone 5S with 64GB of storage that I bought for $400 which (sadly enough) is the subsidized price that required me to enter a new two-year contract with Verizon Wireless. I pay Verizon $75 a month (plus $6 in taxes and fees, but I'm setting that aside to make the comparison with T-Mobile an apples-to-apples one). That gets me 250 texts, 450 minutes, and 6GB of data. The amount I actually use is much less, so it's plenty. I barely talk on my cell phone, and I've only gone over 250 texts once in nearly 10 years (due to excessive texting caused by the Red Sox romping through the World Series).
To qualify for T-Mobile's new program, I have to trade that device in. The T-Mobile website estimates that turning in my iPhone would provide $300 in credits.

In addition to that, T-Mobile would reimburse the early termination fee I'd have to pay to break my contract with Verizon. That fee is $350 minus $10 for each full month of the contract I've completed. The fee for me would be $320, but in this scenario it doesn't matter because T-Mobile will cover the charge.

Now, I need to purchase a new iPhone 5S with 64GB of storage from T-Mobile since I was required to trade in my Verizon one to get the incentives. The T-Mobile iPhone 5S will cost me $800 plus $10 for a SIM starter kit. Instead of paying that up front, T-Mobile assumes I will pay $200 now and $25 per month over the next 24 months to cover the other $600.

At this point, I am effectively paying T-Mobile $210 up front and receiving a $300 credit, so I'll actually pay nothing and have $90 in credits toward my monthly bills. Now I have to choose a monthly plan.

The cheapest option is $50 per month for "unlimited talk, text, and Web." While unlimited talk and text sounds cool, I don't talk or text enough to make that a selling point. Unlimited Web sounds great, but in reality T-Mobile throttles your speed after you pass 500MB each month.

I don't want slower service, so I would go with one of the more expensive plans. It's $60 per month for a plan that throttles speed after 2.5GB and $70 per month for one that is truly unlimited. My usage may go up over time, but as of now, I never go over 2.5GB, so I'll select the $60 per month plan.

That, in addition to the $25 I'm paying for the device each month, gives me an $85 monthly bill (plus taxes and fees). That means I'm paying T-Mobile $10 a month extra for two years, and if I left early, I would have to pay off the balance owed toward the $800 iPhone.

Over two years, the extra $10 a month is $240. I have a credit of $90, so I'm going to pay T-Mobile $150 more than I would pay Verizon over the same amount of time. The only way to save money would be to get a different, less expensive phone or accept slower speeds after 500MB each month.

It would actually be cheaper for me to pay the Verizon early termination fee myself and bring my phone to T-Mobile. The Verizon iPhone 5S is unlocked out of the box, and customer reports suggest I could use it on T-Mobile's network. Assuming that's the case, I'd pay a breakup fee of $320 to Verizon and pay T-Mobile $60 a month, $15 less than what I'm spending today. It would take a little more than 21 months to break even.

I would make out better on T-Mobile's ETF-reimbursement offer if I was satisfied with a 16GB phone. Trading in a 16GB iPhone 5S would give me a $295 credit instead of $300. A new 16GB iPhone 5S from T-Mobile costs $600, paid off with no money down and $25 a month for two years. If I did that, I'd save $55 over two years by switching to T-Mobile, about $2.30 per month.

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This was all hypothetical—I'm not going to switch. Verizon has its annoyances, but the cellular coverage has always been spectacular for me. I wouldn't risk going to a different carrier unless I got real savings and was certain the service would be nearly as good.

None of this answers the question of whether you would benefit from switching to T-Mobile. For one thing, my monthly bill may be lower than those of other Verizon customers because I'm holding on to an ancient plan from before the iPhone and Android even existed. My 6GB of data is better than normal too. I used to get just 2GB, but Verizon helpfully tripled my monthly allotment after iTunes Match malfunctioned and ate up a ton of my cellular data when it wasn't supposed to.

Other Verizon customers have it worse. Business Insider reporter Steve Kovach writes that he pays Verizon $110 per month for 2GB of data and unlimited calling and texting. He's switching to T-Mobile.

Still, my own situation probably isn't that unique. Ars Senior Reviews Editor Lee Hutchinson, an AT&T customer with a family plan for him and his wife, did the math. He found that if he really wanted to switch to T-Mobile, the best course would be to eat the ETF himself.

Why isn't this easier? Oh right, money.

The nagging question behind all this is: why can't you just bring your own phone to T-Mobile and get the deal they so enthusiastically announced yesterday? We asked T-Mobile PR and found that, while the company calls itself the "Un-carrier," it uses pretty much the same marketing speak as all of the non-Un-carriers.

When we asked why customers can't qualify for this deal if they bring their own phone, T-Mobile PR responded, "A big reason customers want out of contracts is to get a new phone. Customers can upgrade to one of the latest devices, get initial credit to help offset startup costs like down payment, insurance, device taxes, or accessories."

That doesn't answer the question, but T-Mobile got closer to the truth when it told us, "When customers trade in their device, it is really a win-win for both the customer and T-Mobile. A device trade-in provides consumers some initial credit to help with new device purchase or startup costs like down payment, device taxes, or accessories. For T-Mobile, we still see value in the devices consumers no longer want."

In all likelihood, T-Mobile is reselling those phones so it can make a profit despite paying off those early termination fees. There's nothing wrong with that—it's just good business sense. But it means T-Mobile's newest gambit won't attract the bring-your-own-device customers that typically love T-Mobile.

And while T-Mobile offers this deal without breaking its pledge to eliminate service contracts, it effectively saddles new customers with an early termination fee if they decide to leave T-Mobile before two years. "If you cancel wireless service, remaining balance on phone becomes due," T-Mobile will tell you when you buy a phone.

Overall, T-Mobile's offer is a good thing for a market where many consumers feel trapped with a carrier they don't like. While I wouldn't benefit, other people surely will. Just make sure to do the math before switching.