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Of course, some people are wedded to the idea of a contract plan.
Usually a contract plan hides part of the cost of the phone in the monthly fee.
But perhaps the best way to see how a no-contract plan works is to compare a T-Mobile plan with a standard contract plan from another major carrier, like AT&T.
They are thought of as being cheap, unsophisticated and for people who can't afford a contract plan.
Month-to-month plan holders are billed monthly, just as in a contract plan, but they can walk away at the end of a month without penalty.
Meanwhile, AT&T, with its subsidized phone, offers a contract plan for $70 with unlimited talk and text and 300 megabytes of data.
Similar(39)
Many no-contract plans provide smaller coverage areas than standard contract plans on the same network.
Personal contract plans, lease plans and contract hire, work in a similar way.
T-Mobile appears to be going to all prepaid with no monthly contract plans.
Another factor is that carriers aren't marketing prepaid plans as heavily because they want more customers on contract plans.
Prices for the plans, called Even More Plus, are lower compared to contract plans with the same features.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com