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Apple Just Released Another 'Cheap iPhone'

For a one-line plan with 2GB of data and unlimited voice and text, you'll pay $100 a month on Verizon ($40 for the line and $60 for the data plan) and $80 a month with T-Mobile ($50 for unlimited talk/text, $10 for the 2GB data plan and $20 a month for the smartphone).

Total cost for the plan over two years on Verizon equals $2,400 plus $199 up front for an iPhone 5. You're looking at $2,599.

Total cost for the plan over two years at T-Mobile comes to $1,920 plus the $99 iPhone 5 down payment. That comes to $2019.

Total savings: $580 at T-Mobile over Verizon.

And, of course, at the end of two years, you have paid for your phone and no longer have to shell out $20 a month. It's reasonable to believe, however, that that's not much of a perk for most of us who prefer -- and quite possibly require -- a new phone at least every couple years.

While it sounds great to say you have no contract, you, in effect, do. You're on an installment plan for the phone. You make the down payment of $99 and then you owe T-Mobile $480 for the iPhone 5 it sold you.

Want to skip out early, you need to pay off the remaining installments. So, how is this not a contract? From that perspective, it's hardly any different than the predicament you're in with Verizon, AT&T (T - Get Report) or Sprint (S). Granted, if you bail from a traditional contract, you'll pay more.

As much as I hate to admit it, I recently escaped from an AT&T three-line contract with roughly one year remaining. That set me back $647.32. That's quite a bit more than the $220 you would pay to get out of your it's not really a contract with T-Mobile after one year.

If T-Mobile improves its network by expanding 4G LTE ( and fast because there's nothing like the experience I have daily with Verizon's 4G LTE) and comes through with a trade-in/resale program so users have versatile upgrade options, this news could really change the game.

At this point, however, T-Mobile does save you money, but it's still a contract and the experience won't be quite the same -- warts and all -- as it is with AT&T, Verizon or Sprint.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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