T-Mobile USA to Cease Offering Subsidized Device Pricing Options in 2013

[MacRumors]

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.

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.

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

[ixodes]

This ought to prove interesting.

[SnowLeopard OSX]

Interesting.

[bboyredcel]

sounds awesome. makes me actually want to consider t-mobile.

too bad i <3 my straight talk.

[mlayer]

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.

[MJedi]

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.

[nickn]

Hopefully they keep the current prepaid prices! As it is they have unlimited everything prepaid for $50 a month, which is a decent deal.

[britboyj]

Soooo they're going with the model the REST of the world uses, but will probably be the most expensive place to actually buy devices... Interesting.

[blackhand1001]

Moving to the european pricing model. This will definitely benefit google far more than apple as Apple relies on carrier subsidies heavily to get sales in the US market.

[koban4max]

is this suppose to be a good thing?

[chiefsilverback]

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.

[dashiel]

Originally Posted by chiefsilverback

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.

[stayblunted]

just back from making a great salami sandwich and i read this! im already on tmobile w. my unlocked iphone 4s in nyc. this is awesome for people who want to save money. its my birthday today so I feel like its a coincidence

[as0016]

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...

[KPOM]

Originally Posted by blackhand1001

Moving to the european pricing model. This will definitely benefit google far more than apple as Apple relies on carrier subsidies heavily to get sales in the US market.

If it takes hold. Even the Galaxy S3 has a hefty $350 subsidy. It will take more than $15-20/month less on a 2-year contract to make it worthwhile. T-Mobile tried a version of this a few years ago (their "Even More+" plans, which were non-contract), but when given the choice most customers stuck with the subsidized plans. Their "Value" plans still require a 2 year contact.

[chiefsilverback]

Originally Posted by dashiel

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?

[Redbeard25]

Give me a pay-per-voice-minute, unlimited text and unlimited data plan, and I'm there.

[Westside guy]

This is a great thing for US consumers... but I'm not sure they're going to recognize that fact.

----------

Originally Posted by Redbeard25

Give me a pay-per-voice-minute, unlimited text and unlimited data plan, and I'm there.

Their $30/month, 100-minute voice plan (only available on the web) is essentially this. I believe if you go over 100 minutes in a month the cost is 10 cents/per minute.

[Benjamins]

I think I like T-Mobile already.

[notjustjay]

Originally Posted by chiefsilverback

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).

[Radio]

Originally Posted by Westside guy

This is a great thing for US consumers... but I'm not sure they're going to recognize that fact.

----------



Their $30/month, 100-minute voice plan (only available on the web) is essentially this. I believe if you go over 100 minutes in a month the cost is 10 cents/per minute.

Yup -

RADIO

[CrAkD]

Wow. Color me impressed. When apple released the first iPhone I always thought they would be the ones that turned the cell phone industry in the US upside down getting rid of the contracts.

But apparently it's t-mobile. However this isn't big news yet. It's essentially the same thing just a portion of the bill will be marked phone instead of service. But it's a step in the right direction

[Cinch]

I'm in!

$30/month for 100 talk min, unlimited text and unlimited 3G is all I need. Who cares for LTE, so long as it can handle Pandora.

$70/month for above with unlimited tethering with LTE? Now we are talking. This is truly ideal! Imagine cutting home internet and tether. Your communication bill is just $70/month.

Of course I'll bring my pre-paid iPhone.

[gkarris]

What will the Interest Rate be on an non-subsidized iPhone?

A contract-free 16Gig iPhone 5 is $649...

Any ideas?

[Allenbf]

Originally Posted by stayblunted

just back from making a great salami sandwich and i read this! im already on tmobile w. my unlocked iphone 4s in nyc. this is awesome for people who want to save money. its my birthday today so I feel like its a coincidence

Happy Birthday.