iPhone 3GS on T-Mobile for Beginners

I've been a fan of Apple mobile products for a long time but I never could get over the sticker shock of an iPhone until now.  As their portfolio has aged it has made it possible for people like me to own an iPhone at a more reasonable price.  What's missing, then, is the service to put it on and according to my research, T-Mobile is the only carrier who offers a plan closest to what I am used to as a former Tracfone user.

So let's start with the basics :

1) You need a factory unlocked iPhone that has a GSM radio.  All iPhones, iPhone 3G's and iPhone 3GS fit into this category.  Starting with iPhone 4 you have to be a bit more specific in your searches but if cost is part of your constraint in buying an iPhone, you're not looking at iPhone 4's in 2012.  Also, the phone must be unlocked and if you're buying one, my research says there is no real way to tell if it has been unlocked other than to trust your seller.  I have zero experience in unlocking phones so my commentary on it will end here.

2) You need a T-Mobile SIM card.  For iPhone, iPhone 3G and iPhone 3GS, you're dealing with the old larger SIM cards,  Starting with iPhone 4, you're asking for a "micro-SIM".  You will need to know this going into the store because if your experience is like mine, the guy at the store had no clue and wasn't real keen on finding out the real answer.  Keep in mind that T-Mobile does not officially support the iPhone so they're going to tell you things like "we don't guarantee this will work" and other salesmanship award winning lines like that.

3) Installing the SIM is relatively simple - stick a paper clip into the hole at the top of the iPhone, the SIM tray pops out, you put the SIM in with the pink "T" facing you or facing up and the gold SIM facing down (or towards the back of the phone),  carefully slide that back in until it clicks in and you're done.  I had to work with the SIM card a bit to get it to sit in the tray just right.  Don't force it - it will slide nicely when it's in place.  There are great videos on youtube if you need help.  About 30 seconds later you will see the T-Mobile name in the top left of the iPhone screen and the signal bars.  About 30 seconds after that, I got a voicemail, inviting me to set that up.  I made a test phone call to my wife and it went great.

4a) Cell Phone Plans - Voice - For me, I wanted to have an iPhone but I never wanted the monthly bill that most iPhone users have.  I also do not make a lot of phone calls - I have just never enjoyed the experience of talking on the phone.  To put it into perspective for you, most people pay close to $100 a month for their smartphones - I have not typically paid more than $100 a year for my tracfone.  I was willing to move up the price scale a little bit but not a lot.  Lately, we've been paying $20 every three months for our tracfones, but if you don't already know - the quality of tracfone handsets and tracfone software is just awful, I mean really, really bad.  So fast forward to T-Mobile - they have a plan similar to tracfone's that costs $50 every three months for 400 minutes of voice and text messages only (no data) and of course you can always add more when needed.  

4b) Cell Phone Plans - Data - I have started carrying a mifi at the cost of $20-$25 a month so the no data thing doesn't bother me in the slightest.  Plus with the mifi I get data for all my other devices as well (laptop, iPad, wife's iPod, etc).  The 3GS can function as a mobile hotspot but it will only work through bluetooth, not wifi and the cost difference is significantly more than the $20-$25 monthly for the mifi.  A MiFi does cost about $100 and I have had one die on me after 15 months of daily use, but even with that said, I think it's the better option.  Important caveat on T-Mobile data - as of early 2012, even if you do pay for data, you will only get 2G or "Edge" speeds which are pretty brutally slow (remember dial-up?).  This is supposedly changing at some point in 2012 as T-Mobile is turning on 3G that is compatible with iPhones.

So my advice is be careful - this whole process was a lot of work for me to get it right and I didn't get much help along the way.  Apple isn't going to help me because I'm not giving them any money.  T-Mobile isn't going to help me because I'm not buying one of their phones and I'm not signing up for a contract.  The most important parts are Factory Unlocked GSM iPhone (1, 3G or 3GS is where the lowest cost models are), get your full size SIM from T-Mobile and have them activate it, install the SIM into the iPhone, and pick a voice and/or data plan that's right for you.

And enjoy what the rest of the world has been raving about for the past 5 years.

Postscript : November 2013 -

A year and a half has gone by and much has changed.  T-Mobile is now the "UNcarrier" complete with their CEO cursing out the competition on stage.  Two things have changed just enough since I wrote this article to change the economic viability of this strategy :

1) Mobile Broadband prices have gone up.  T-Mobile's cheapest monthly plan is now $30 a month and they effectively no longer discriminate between prepaid and postpaid plans.  I would never go back to Virgin Mobile after the experience I had with them and the price of data at other carriers has gone absolutely through the roof.  It's truly shocking how expensive Verizon and AT&T have become.

2) T-Mobile's monthly phone plan prices have gone down, rather attractively in fact.  I never had a desire to pay $50 a month for my cell phone until I realized that I was already spending $30 a month for the mifi. Additionally, I can use my iPhone as a hotspot in a pinch.  Finally, my wife started using the exact same setup as I did and she was having problems keeping her minutes "in stock", so adding her to my plan only cost another $30, the same price as her monthly mifi.  At that point, it became a no brianer for us to go post paid.

I still think it makes sense to buy your own device (used) and then put your own plan on it but I no longer think that prepaid + mifi is a particularly attractive option unless T-Mobile (or another carrier) changes their rates significantly.