backtop


Print 43 comment(s) - last by Mike Acker.. on Dec 11 at 7:39 AM

T-Mobile won't subsidize the cost of the iPhone

Deutsche Telekom announced yesterday that T-Mobile would begin selling Apple devices next year. T-Mobile CEO John Legere went on to confirm that the iPhone would be among the Apple products the wireless company will sell next year. However, he is warning that T-Mobile will offer the iPhone in a drastically different way than other carriers. T-Mobile is ending subsidies on all of its phones.

What that means is if you want the iPhone on the T-Mobile network, you'll pay for the entire purchase price of the phone upfront rather than getting a discount in exchange for signing up for a contract. T-Mobile is planning to shift to unsubsidized Value Plans offering customers cheaper rates for voice and data.

T-Mobile has already stated that 80% of the activations it had last quarter were customers choosing its new Value Plans. The plans are so successful that T-Mobile believes there's a huge demand for the pay up front and get a discounted plan sales model.
 
It remains to be seen if T-Mobile customers are willing to pay full price for the iPhone when other carriers are offering them a significant discounts.

Pricing for the iPhone ranges between $650 to $850 for unlocked devices. However, it appears that T-Mobile has a plan to help offset the huge upfront cost for expensive devices such as the iPhone 5. Legere has hinted that T-Mobile will sell the iPhone for $99 upfront and in charge subscribers $15 - $20 a month in payments over the following 20 months.

Source: Gigaom



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: subsidized where?
By RufusM on 12/7/2012 9:36:18 AM , Rating: 2
Yes, your are right. It's not a subsidy for a phone. It's a short term loan that ends when the phone is paid off, probably plus a little interest. Compare this to a subsidized phone where the phone is more than paid off by the time the two year contract ends and if the customer doesn't get a new device at the end of the contract it's all gravy. Good for the carrier, bad for the customer.

The key to this is customer education, since even some tech reporter's don't seem to completely get it.


"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

Related Articles













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki