T-Mobile USA Planning to Offer iPhone and End Subsidies Within 3-4 Months

iphone 5 black whiteFollowing up on yesterday's report about T-Mobile USA already having 1.9 million iPhones operating on its network as it moves toward a launch of official sales later this year, Reuters reports that the carrier should begin selling the device within the next 3-4 months. T-Mobile is planning a similar timeframe for its move to end device subsidies in favor of installment plans and lower monthly plan costs.

"They're all, I would call them, in three to four months as opposed to six to nine months, [T-Mobile USA CEO John] Legere told Reuters in an interview at the Consumer Electronics Show in Las Vegas.

T-Mobile is also remaining aggressive on the acquisition and partnership front, with Legere noting that the carrier is looking to close its pending acquisition of MetroPCS in the second quarter of this year and is exploring deals with satellite TV provider Dish Network and prepaid carrier Cricket's parent company Leap Wireless.

As for T-Mobile's plans to end subsidies, it may not be the only major U.S. carrier to make the shift, as The Wall Street Journal reports that both AT&T and Verizon will be watching how things play out. Both carriers do, however, acknowledge that customers are so conditioned to low upfront device costs that it may prove a significant hurdle to overcome.

Related Forum: iPhone

Top Rated Comments

Tiger8 Avatar
146 months ago
What horshhit! Why should you pay less because you are out of contract. You are receiving the same service and package. Talk about self-importance syndrome.

Because part of your contract is a phone subsidy, around $25 each month. They bundle it inside your plan.

So once you pay off your phone, your bills should go down, but that's common sense, it doesn't work this way with either of the big 3
Score: 8 Votes (Like | Disagree)
SkippyThorson Avatar
146 months ago
1. Up yours ATT, you didn't drop my plan price after my contract was up saying the benefit was I could leave at any time... and that was after I had explained to them why it should be cheaper after the contract was up.

2. T-Mo I'm coming your way. I'm sick of this crap the others pull over on us.

3. As far as being subsidized, T-Mo has explained you can get financing... i think it's 0% paying $20 a month until the phone is paid off, with a down payment of $200 (for an iphone). So basically it's the same thing, but they keep things separate so you know what goes where and when it's paid off, it's paid off.

Edit: I'm on straight talk and looking forward to leaving it. Yeah it's cheap, but i've had my fill of problems, more than I've had when I'm on a "name brand" network.

You and I could sit and have a long, long talk. I feel the exact same way because I'm in the exact same position. My first few bills were upwards of $85... When I had AT&T, they thought I was privileged to be staying with them post-contract.

I talked them down to $65 with two discounts shortly in to my contract, but I only had 200mb of Data, 200 texts, and 450 minutes a month. After 2 and a half years with an iPhone 2G, I signed up with another contract when I got a launch day iPhone 4. (I wouldn't have even done that if my iPhone 2G's Wifi didn't stop working, but it was impossible to keep on that plan.)

After a very lengthy debate about overage text charges through using the AIM app (I still don't know how they got my AIM message-exchange data) I got them to drop a bill, and my contract went down to $62. (OOH!!!)

When that contract was up, I immediately got Straight Talk. It was a huge fiasco to get MMS to work after 3 months without it, I had to switch over to YouMail because there is no native Visual Voicemail support, and I still constantly have to toggle Airplane mode on and off at least once a month because it errors out when connecting to cell data. At least that was $45 for unlimited everything.

The only reason I'm not on T-Mobile yet is no Visual Voicemail support. Not even YouMail works on a relative's T-Mobile iPhone 4. At this point, I don't care at all. For $30 a month, I can get 100 minutes, unlimited text, and unlimited web. If they carry the iPhone, they will either implement Visual Voicemail or provide a solution for those that have the iPhone on a prepaid plan. Until then, for $30, I can call my voicemail like I used to.

This major contract bull with AT&T / Verizon / Sprint is for the birds. My parents got Virgin Mobile long ago and have been happy. When I call them, the quality of their $20-$40 flip phones is no different than if they had a $200 smart phones, and they aren't paying an arm and a leg each month. Heck, they don't even have a bill each month - it's $20 every 3 months.

T-Mobile has me as a customer as of February 1st. No more contracts, no more major carrier games, no more obscene fees. Each year the new iPhone comes out, I get the previous year's iPhone at half the price, and put it on a cheap prepaid plan. No headache switching over to the Lightning connector when I have a collection of 30-Pin docks and cables, and no huge upfront cost or marked up high-demand in the Marketplace here. A year old phone on a prepaid plan, upgraded to the next phone each year. Suck it, carriers.

Holy crap, my posts are always long-winded. :)
Score: 7 Votes (Like | Disagree)
gnasher729 Avatar
146 months ago
What horshhit! Why should you pay less because you are out of contract. You are receiving the same service and package. Talk about self-importance syndrome.

An iPhone 5 costs $649 from Apple.

You enter a 24 month contract and you are told that you get a free iPhone 5.
In reality, the carrier pays $649 to Apple, and the bill for the service is $27 higher than it should be, so that other 24 months you pay $649 to the carrier.

Actually, your bill is $40 higher than it should be, and 24 x $40 - $649 is profit for the carrier.

After 24 months, you have paid for your iPhone. There is no reason why you should continue paying the high rate. Consider this: You could (A) continue using your iPhone 5 for another two years. Or (B) cancel the contract, put your iPhone 5 into a drawer, get an iPhone 6 or 7 for "free" and start a new two year contract. Since (B) is $649 more expensive for the carrier, why should they charge the same amount for (A)?
Score: 6 Votes (Like | Disagree)
KPOM Avatar
146 months ago
This will be VERY interesting. T-Mobile tried something similar a few years ago called Even More Plus, where they knocked $20 off the monthly bill in exchange for no subsidy on the phone. It wasn't popular then, but that was partly because they offered subsidies greater than $240 on their other plans.

Apple is very much a company who has benefited from carrier subsidies. iPhone adoption rates in the US are significantly higher than in Europe, where subsidies are less common and Android phones sell for less. I wonder if this is why we are suddenly hearing all the chatter about a cheaper iPhone (first Digitimes, then the more reputable WSJ and today Bloomberg). Perhaps part of it could be for emerging markets like China, but maybe Apple is also preparing for the days when it won't be able to rely on AT&T and Verizon paying them an extra $100 for their phones.
Score: 6 Votes (Like | Disagree)
rmwebs Avatar
146 months ago
Ever notice how iPhones cost $199, but if you buy it off contract it will costs like $649? The carrier pays the difference to Apple and make it up over the life of the contract. The amount that the carrier pays is a subsidy


Technically you still end up paying $649 - its included in the contract over several months. Apple and the mobile network just get a bit more cash out of you.

Think of it as a loan.
Score: 6 Votes (Like | Disagree)
Mad Mac Maniac Avatar
146 months ago
Can someone explain what "subsidies" are and how they can exist?

Ever notice how iPhones cost $199, but if you buy it off contract it will cost like $649? The carrier pays the difference to Apple and they make it up over the life of the contract. The amount that the carrier pays is a subsidy

So T-Mo is planning on you paying full price on your devices, but then can charge significantly less monthy. It's just a different way of getting your money
Score: 6 Votes (Like | Disagree)

Popular Stories

iPhone 16 Camera Lozenge 2 Perspective Gray

Five Key Upgrades Coming to iPhone 16

Friday March 15, 2024 1:45 pm PDT by
The iPhone is Apple's top-selling product, and it gets an update every year. In 2024, we're expecting the iPhone 16 and iPhone 16 Pro lineup, with an arguably more interesting feature set than we got with the iPhone 15 and iPhone 15 Pro. Subscribe to the MacRumors YouTube channel for more videos. Capture Button All four iPhone 16 models are set to get a whole new button, which will be...
When To Expect New iPads Feature 1

Apple to Announce New iPads on March 26, Rumors Claim

Monday March 18, 2024 4:02 am PDT by
Apple is widely expected to release new iPad Air and OLED iPad Pro models in the next few weeks. According to new rumors coming out of Asia, the company will announce its new iPads on Tuesday, March 26. Chinese leaker Instant Digital on Weibo this morning 日发布%23">claimed that the date will see some sort of announcement from Apple related to new iPads, but stopped short of calling it an...
airpods 3 orange

Two New AirPods 4 Models Expected to Launch in September or October

Sunday March 17, 2024 7:56 am PDT by
Apple suppliers will begin production of two new fourth-generation AirPods models in May, according to Bloomberg's Mark Gurman. Based on this production timeframe, he expects the headphones to be released in September or October. Gurman expects both fourth-generation AirPods models to feature a new design with better fit, improved sound quality, and an updated charging case with a USB-C...
iphone se 4 modified flag edges

iPhone SE 4 Expected to Depreciate Heavily

Tuesday March 12, 2024 9:04 am PDT by
Resale value trends suggest the iPhone SE 4 may not hold its value as well as Apple's flagship models, according to SellCell. According to the report, Apple's iPhone SE models have historically depreciated much more rapidly than the company's more premium offerings. The third-generation iPhone SE, which launched in March 2022, experienced a significant drop in resale value, losing 42.6%...
iOS 17 Passkey With Apple ACCOUNT Feature

'Apple ID' Expected to Change to 'Apple Account' Starting With iOS 18

Sunday March 17, 2024 7:13 am PDT by
MacRumors was first to report that Apple was planning to rebrand "Apple ID" to "Apple Account" across its software platforms and websites like iCloud.com as early as this year, and now Bloomberg's Mark Gurman has corroborated this change. A mockup of the new Apple Account branding In his Power On newsletter today, Gurman said the new "Apple Account" branding will start to be used later this...
General iOS 17 Feature Orange Purple

iOS 17.4.1 Update for iPhone is Imminent

Monday March 18, 2024 5:27 am PDT by
iOS 17.4.1 and iPadOS 17.4.1 should be released within the next few days, with a build number of 21E235, according to a source with a proven track record. MacRumors previously reported that Apple was internally testing iOS 17.4.1. As a minor update for the iPhone, it will likely address software bugs and/or security vulnerabilities. It is unclear if the update will include any other changes. ...
M3 iPad Feature 3

New iPads Likely to Begin Shipping in April

Monday March 18, 2024 9:52 am PDT by
Apple's new iPad Pro models with OLED displays will likely begin shipping to customers in April, according to information shared today by Ross Young, CEO of display industry research firm Display Supply Chain Consultants. Bloomberg's Mark Gurman also said the new iPad Pro models might not ship until "deeper" into April in his Power On newsletter on Sunday:I've repeatedly said that new...