Often, we steer people away from that kind of arrangement, but in this case, the pricing should work out well for a lot of consumers. Let's crunch the numbers for someone who needs just one phone line. With All-In, you can get a 16GB iPhone 6 and use it for two years for $1,920 (that doesn't include the activation fee.) The same phone and 24 months of service would cost $2,210 on the company's 4GB Family Share Pack data plan ($65 a month, plus about $27 while you paid off the phone, which costs $650).
What if you keep your iPhone for a third year? All-In will end up costing $2,880 ($80 per month for 36 months). If you have the Family Share Pack, the monthly bill will drop to $65 after two years, once the phone is paid off, but the total for three years is still higher, at $2,990.
That doesn't mean the All-In is better for everyone. You need to do some arithmetic to get the best deal. If you need multiple phones, the price-per-phone drops for most plans, but not for the All-In. You can economize on data usage to bring costs down on most plans, but not the All-In. And if you keep a phone you've paid off for a fourth year, trade it in—or just decide to sell it on E-Bay—the numbers change again.
Update 2/5/15: Thanks to price-war incentives and greater plan flexibility, there are more opportunities now to save a few bucks on the new, no-contract plans from AT&T, Sprint, T-Mobile, and Verizon Wireless—a.k.a. the Big Four.
These plans separate the purchase of the phone from the service charges, effectively giving you an interest-free loan you can pay off in about two years. When you’ve paid off the phone, your monthly bill goes down accordingly. And there are no termination fees; if you want to leave the carrier, you just pay any remaining balance on the phone.
Although our recent report, "Small carriers outrank the big ones in Consumer Reports' latest cell phone service survey," covering 63,352 subscribers in 26 metro areas, found some very happy customers who switched to smaller cell providers, there are still good reasons for staying big.
Verizon, for example, earned decent marks across the board for voice, text, and data service, while AT&T was a standout for its 4G service. It recently slashed prices on its More Everything plans, added more data tiers to allow customers to better fine-tune plans, and monkeyed with the access fees it charges (for a limited time) to lower costs further.
T-Mobile was tops for value and customer service. And Sprint, which didn’t do particularly well in any category, has recently become very aggressive about pricing—and some people actually do like the company.