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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.
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.

Top Rated Comments

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22 months ago
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.
Rating: 29 Votes
22 months ago
This ought to prove interesting.
Rating: 20 Votes
22 months ago
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
Rating: 19 Votes
22 months ago
This is a great thing for US consumers... but I'm not sure they're going to recognize that fact.

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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.
Rating: 13 Votes
22 months ago

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.
Rating: 12 Votes
22 months ago
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.
Rating: 9 Votes
22 months ago

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.
Rating: 9 Votes
22 months ago
sounds awesome. makes me actually want to consider t-mobile.

too bad i
Rating: 8 Votes
22 months ago
I think I like T-Mobile already.
Rating: 7 Votes
22 months ago

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).
Rating: 7 Votes

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