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Old Dec 6, 2012, 03:19 PM   #1
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T-Mobile USA to Cease Offering Subsidized Device Pricing Options in 2013




Just as it announces that it will begin offering Apple products, presumably including the iPhone and iPad, next year, T-Mobile USA has also revealed that it will be restructuring the way it sells to customers by eliminating device subsidies and focusing on lower monthly plan costs. The plans were announced at Deutsche Telekom's annual investor conference today and noted by Fierce Wireless.
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Currently T-Mobile offers Classic plans that subsidize the device and require a two-year contract and Value plans that let customers pay the full cost of their smartphones or pay it off in monthly installments in exchange for lower monthly plan rates. Legere said that in 2013 T-Mobile will eliminate its Classic rate plans that include device subsidies and instead only offer Value plans to customers.
Under one example for "the most iconic device in the world", Legere noted that customers might pay $99 upfront and then $15-$20 per month for 20 months on top of their monthly plan in order to pay off the full cost of the device. With the customer being responsible for the full cost of the device, T-Mobile can offer lower base plan pricing.
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Legere did not provide specifics on the company's plans to offer Apple products, which was announced earlier today. However, he did say that when the company launches Apple's products, it will be dramatically different. He also said that T-Mobile had not made a volume commitment to purchase Apple products on size of what Sprint Nextel has committed to "or anything close to it." Sprint last year inked a four-year, $15.5 billion deal to sell the iPhone.
T-Mobile will become the last of the four major U.S. carriers to offer the iPhone, joining AT&T, Verizon, Sprint and a host of smaller carriers that have partnered with Apple on the device.

Article Link: T-Mobile USA to Cease Offering Subsidized Device Pricing Options in 2013
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Old Dec 6, 2012, 03:20 PM   #2
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This ought to prove interesting.
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Old Dec 6, 2012, 03:22 PM   #3
bboyredcel
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sounds awesome. makes me actually want to consider t-mobile.

too bad i <3 my straight talk.
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Old Dec 6, 2012, 03:25 PM   #4
MJedi
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Depending on how much the monthly plans are, this might a good way to attract customers. Your monthly plans SHOULD be lower if you use an unsubsidized phone. Isn't the point of a contract is that you pay for the phone over the 2-year contract? And when the phone is paid off, your monthly should go down.

Not at AT&T or Verizon.
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Old Dec 6, 2012, 03:27 PM   #5
koban4max
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is this suppose to be a good thing?
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Old Dec 6, 2012, 03:42 PM   #6
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Yep, I asked AT&T why my monthly payment didn't go down when my iPhone 4 was paid off and they wouldn't give me an answer.

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Originally Posted by MJedi View Post
Depending on how much the monthly plans are, this might a good way to attract customers. Your monthly plans SHOULD be lower if you use an unsubsidized phone. Isn't the point of a contract is that you pay for the phone over the 2-year contract? And when the phone is paid off, your monthly should go down.

Not at AT&T or Verizon.
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Old Dec 6, 2012, 03:52 PM   #7
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Yep, I asked AT&T why my monthly payment didn't go down when my iPhone 4 was paid off and they wouldn't give me an answer.
Because with VZ and ATT, you're signing the contract on the plan, not the phone. You can sell the phone right now if you wanted - you're just going to have to keep paying the rate you signed up to plan. Even if the phone is paid off, you're contracted to the plan.

Thus, you have to keep paying the same price.
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Old Dec 6, 2012, 04:22 PM   #8
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Originally Posted by bdkennedy1 View Post
Yep, I asked AT&T why my monthly payment didn't go down when my iPhone 4 was paid off and they wouldn't give me an answer.
Yea, After I got my phone unlocked / 2 years w/ AT&T, I asked them about this before telling them I was switching to straight talk. The person on the phone admitted it didn't make sense.
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Old Dec 6, 2012, 06:26 PM   #9
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Quote:
Originally Posted by MJedi View Post
Depending on how much the monthly plans are, this might a good way to attract customers. Your monthly plans SHOULD be lower if you use an unsubsidized phone. Isn't the point of a contract is that you pay for the phone over the 2-year contract? And when the phone is paid off, your monthly should go down.

Not at AT&T or Verizon.
We already made the switch to a value plan, it worked out at about half the price of our old plan, including the cost of the devices. Once the devices are paid for, our bill will drop a lot.

We have 5 lines and it works out to about $34 per line, including the equipment purchase. We have two lines with unlimited talk, text & web and the rest all have 500 anytime minutes, unlimited mobile to mobile, unlimited texting and two of the other lines have unlimited data. So, all in all, it works out pretty cheap. Not as low as I think they could make it and be profitable, but still pretty good.
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Old Dec 6, 2012, 03:28 PM   #10
chiefsilverback
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I'm not really sure how this changes anything, instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!

They already address the difference in the handset costs with the amount they charge for the handset hence why a 64GB iPhone 5 costs considerably more on a subsidised contract than a lesser handset.
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Old Dec 6, 2012, 03:30 PM   #11
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Originally Posted by chiefsilverback View Post
I'm not really sure how this changes anything so instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!

They already address the difference in the handset costs with the amount they charge for the handset hence why a 64GB iPhone 5 costs considerably more on a subsidised contract than a lesser handset.

At the end of two years you’re paying $60 a month, currently you would continue to pay $80 a month despite having “paid off” the phone. So if you’re the type of customer who likes upgrading more frequently the net result is the same, if you couldn’t care less and keep your phone for more than 2 years you end up ahead of the game.
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Old Dec 6, 2012, 03:35 PM   #12
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Originally Posted by dashiel View Post
At the end of two years you’re paying $60 a month, currently you would continue to pay $80 a month despite having “paid off” the phone. So if you’re the type of customer who likes upgrading more frequently the net result is the same, if you couldn’t care less and keep your phone for more than 2 years you end up ahead of the game.
But am I not right in thinking that after 2 years you can ask Verizon or ATT to unlock your device and you're then free to go wherever you like?
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Old Dec 7, 2012, 08:17 AM   #13
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Originally Posted by dashiel View Post
At the end of two years you’re paying $60 a month, currently you would continue to pay $80 a month despite having “paid off” the phone. So if you’re the type of customer who likes upgrading more frequently the net result is the same, if you couldn’t care less and keep your phone for more than 2 years you end up ahead of the game.
Yeah, or even if it's a bit more than 2 years because of the upgrade cycle.

But this provides a nice option if I'm happy to keep my existing device. Maybe I can live with it for 3 years instead of 2.

Delighted that some company is going to try to separate the phone from the plan a bit better.
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Old Dec 6, 2012, 03:34 PM   #14
as0016
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This does not seem materially different then than the way it works now.

Unless there is a specially designed iphone that gets aws (and thus can work even in places with their older spectrum) or something, it's just like it is with their current value plans and an unlocked unsubsidized iphone 5 from the apple store. The only minor difference is paying for the phone more slowly, over time, instead of having to lay out all 650+ at the time of purchase...
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Old Dec 6, 2012, 03:35 PM   #15
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Give me a pay-per-voice-minute, unlimited text and unlimited data plan, and I'm there.
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Old Dec 6, 2012, 03:37 PM   #16
notjustjay
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Location: Canada, eh?
Quote:
Originally Posted by chiefsilverback View Post
I'm not really sure how this changes anything, instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!

They already address the difference in the handset costs with the amount they charge for the handset hence why a 64GB iPhone 5 costs considerably more on a subsidised contract than a lesser handset.
Like someone said a few posts above mine, it benefits you in the long run. You pay $x/month regardless of whether you're in a contract or not.

This is what made me decide to get an iPhone in the first place. I've been with Fido (in Canada) since 1999 and I always prided myself on NOT locking myself into a contract during all that time. Then it finally occurred to me that whether or not I was in a contract, I was still paying the same $x/month for my service fees, except the guy with the contract was getting a new phone every 3 years! Not so proud after all!

What really should happen for a "best of all worlds" experience is that the subsidy should be billed separately, and then stop, once the phone is paid off. Some providers are moving to this model (the "tab" model).
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Old Dec 6, 2012, 04:07 PM   #17
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Quote:
Originally Posted by chiefsilverback View Post
I'm not really sure how this changes anything, instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!

.
No subsidy you save $20, presumably once it is paid off you also save that amount.

Instead of paying $900 for off contract phone and the same $50 as the guy with a subsided phone
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Old Dec 6, 2012, 07:36 PM   #18
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Originally Posted by chiefsilverback View Post
I'm not really sure how this changes anything, instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!
The big change.....no need to sign a two year - or any contract. You may come and go as you please. No penalties for leaving early.

I would hope this would create an atmosphere for the carriers to focus on quality of service and customer service to keep your business since they won't have you locked in for two years.
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Old Dec 6, 2012, 10:46 PM   #19
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Quote:
Originally Posted by chiefsilverback View Post
I'm not really sure how this changes anything, instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!

They already address the difference in the handset costs with the amount they charge for the handset hence why a 64GB iPhone 5 costs considerably more on a subsidised contract than a lesser handset.
After you pay off the device your contract is $60.
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Old Dec 9, 2012, 12:45 PM   #20
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Originally Posted by bboyredcel View Post
sounds awesome. makes me actually want to consider t-mobile.

too bad i <3 my straight talk.
is straight talk good ? better service?
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Old Dec 26, 2012, 01:11 AM   #21
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http://news.cnet.com/8301-1035_3-573...less-industry/
T-Mobile exec: Subsidies are hurting wireless industry

http://www.neptunemobile.com/2012/12...ing-subsidies/

There’s been no shortage of detractors over T-Mobile’s risky decision to move to a Value Plan only world in 2013. Now, Tracy Isacke, director of Telefonica Digital, a large Spanish multinational telecommunications company with more than 313 million customers worldwide is advising T-Mobile not to go down this path.

Isacke suggests taking it from experience as Telefonica decided to undertake the same move earlier this year with less than favorable results. In September of this year alone, Telefonica lost 253,520 mobile users as Vodafone, another large European operator (part owner of Verizon/Wireless) is also seeing negative results from the removal of subsidies.
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Old Dec 6, 2012, 04:05 PM   #22
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Originally Posted by ixodes View Post
This ought to prove interesting.
Yes it could. Cell carriers have for a while had screwed pricing with non subsidized phones being charged the same as those with et.
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Old Dec 6, 2012, 03:22 PM   #23
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Interesting.
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Old Dec 6, 2012, 03:24 PM   #24
mlayer
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Bravo T-Mobile. Get that LTE network up soon and I'll come back. Hope this starts a trend of similar pricing structures on other carriers.
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Old Dec 6, 2012, 03:26 PM   #25
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Hopefully they keep the current prepaid prices! As it is they have unlimited everything prepaid for $50 a month, which is a decent deal.
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