T-Mobile to End Smartphone Subsidies, Offer Cheaper Value Plans
December 7, 2012 8:40 AM
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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.
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12/10/2012 1:17:53 PM
"If you can stand sticking with an older phone for 3 or 4 years you can save significantly."
And if you can't, drool over the whateverphone version N+1, or just have buyer's regret, someone else will be happy to pick up your used phone and help you offset the cost of your next phone.
(Conversely, people who don't need/want the latest thing will be able to buy a used whateverphone and roll it into a no-contract plan, which is very sensible in the same way buying lightly used cars is a great way to save $).
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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