DailyTech - T-Mobile to End Smartphone Subsidies, Offer Cheaper Value Plans

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Gadgets T-Mobile to End Smartphone Subsidies, Offer Cheaper Value Plans
Shane McGlaun (Blog) - December 7, 2012 8:40 AM

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

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RE: I Hope This Catches On, But Smartphones Are Probably Over-priced Anyways

By Dr of crap on 12/7/2012 1:05:58 PM , Rating: 2

They can charge whatever they want since they have you on thier network.

WHEN they HAVE to put out new phones every 6 months, you have to pay for R & D, marketing, ect... Now if people keep thier phones for 3-5 years ( like that'll happen ) and less new are bought the price will have to drop. AND competetion will force prices down, too.

Parent

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook