T-Mobile to completely end device subsidies next year

December 6, 2012
13

We are hearing some interesting news today out of the T-Mobile camp. It looks like those folks are looking to shake up the mobile industry and make some massive changes. T-Mobile hopes to completely get rid of device subsidies attached to contracts and such starting early next year. This means no more discounted phones and 2-year contracts, instead you'll be on value plans and make payments towards your purchase.

According to FierceWireless T-Mobile will be completely killing off subsidies starting next year. This model is something T-Mobile has been offering for some time. Instead of signing a new 2-year contract and getting a brand new Galaxy S III for $199 you'll have no contract, join a value plan, and pay an additional $20 a month (or so) on your bill as you pay off that smartphone. Whether this is less out of pocket or not depends on a few different variables.

T-Mobiles new man in charge Legere had this to say: "We think there is a huge room for a carrier to change in a way that the larger players will choose to or will not be able to respond to," Legere said. He noted that the Value plans T-Mobile will offer next year will be "fair and simple pricing" with "low out of pocket expenses" for consumers.

Whether or not Verizon or AT&T follow suite will be a big deal, considering you'll be able to get contract free smartphones from T-Mobile and not on the others. This could really make a shift for the better and get the ridiculous 2-year contract model on the way out. With technology advancing as fast as it is and Samsung releasing new flagships yearly, do you really want to be stuck into a contract for 2-years. I sure don't! Although this means we essentially finance our phones from T-Mobile instead of signing a 2-year contract.

In 2013 T-Mobile will offer cheap value plans, and what they're calling "iconic devices" for just $99 with $15 monthly payments to go along with those unlimited 4G data plans offered from the company. Another benefit here is users can bring unlocked devices (like the Nexus 4) over to T-Mobile and enjoy lower value plans than the competition offers. T-Mobile stated 80% of their activations last quarter were these new value plans, so they expect an impressive and smooth transition next year.

Thoughts regarding T-Mobiles new plan? I just wish Google would buy T-Mobile already and start a mobile revolution. Yup, I just went there.

[via SlashGear]


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  • Captain_Doug

    Sounds great to me. Although I would just buy my phone outright. I really hope T-mobiles network shapes up with LTE. If so, they have my business for the forseeable future.

    • http://www.androidcommunity.com Cory Gunther

      Yea being able to get 4G LTE from T-Mobile for a better price than Verizon, then just use unlocked phones or a Nexus from Google… that’s what I want.

      • Captain_Doug

        Great minds…

      • http://www.androidcommunity.com Cory Gunther

        Virtual high five Dougie!

      • Captain_Doug

        Dougie eh? Boy, apparently we ARE close… ;D

  • http://twitter.com/dangelo124 armorov124

    does this means i can buy a nexus 4 from them and use it in another country (Mexico) with no problems?

    • Justin W

      As long as your carrier is a GSM carrier that uses one of the bands the Nexus 4 supports, yes.

  • Justin W

    I’m down for your T-Mo being bought out by Google idea. As long as they get additional coverage. I’d really like for the whole of the US to move to the European model for Wireless Carriers.

    • Agreed

      Haha! The idea of Google buying T-Mobile is nothing new. It was originally thought up in 2005/2006 when the two companies started socializing the idea of working together to build Android.

      Remember–
      Android was a pet project of former T-Mobile VP, Nick Sears, who then came back to TMO USA when he sold the software, likely a lot of it based on ideas from original apple designers work in the Sidekick.

      Anyways…
      If Google wanted to vertically align a number of industries, sure, they could buy TMobile. However, if Google bought T-Mobile, likely AT&T, Verizon, Sprint, and others would abandon the Android Platform all together.

      I’m all for putting the Android platform on one carrier. It makes it easy to avoid.

    • Makes Sense

      Haha! The idea of Google buying T-Mobile is nothing new. It was originally socialized in 2005/2006 when the two companies started working together to build Android.

      Remember–
      Android was a pet project of former T-Mobile VP, Nick Sears, who left to build Android, based on Linux, then came back to TMO USA when he sold the software, likely a lot of it based on ideas from original apple designers work in the Sidekick.

      Remember, The T-Mobile Sidekick was started by former Apple Engineers, and even funded by Steve Wozniak, the Co-Founder of Apple, and Steve Jobs’ best friend.

      Anyways, if Google wanted to, they could definitely buy TMobile. However, if Google bought T-Mobile, likely AT&T, Verizon, Sprint, and others would abandon the Android Platform, which may make sense. T-Mobile could become the “All Android All The Time” network.

  • Marty

    So they want me to buy a Galaxy Note II for full price and pay it off at a rate of 15.00 – 20.00 per month? Currently they list it at 699.00 which works out to 35 months. Seems like you are going from a 2 year commitment to a 3 year commitment on a phone that has a 1 year warranty. Unless there are details not spelled out in this article it sounds to me like T-Mobile is going to be the only one benefiting from this plan.

    • Justin Gable

      I just checked Amazon price for Note 2 unlocked = $649 (see it frequently for 549). You don’t _have_ to buy your phone from Tmo. But for sake of argument we’ll go with Tmo’s price of $699.

      Price on contract
      Phone $200 (based off current deal, ends 12/20)
      Monthly unlimited rate (throttle after 2gigs) $90/mo (edited for more apples to apples comparison)
      Monthly unlimited rate (throttle after 2gigs) $79/mo
      Total after 2 years = $2096

      Price no contract
      Phone $699
      Monthly unlimited (throttle after 2gigs) $60
      Total after 2 years = $2139

      So you’re right, it does cost more if you buy your phone from them in this case with their short term deal. After the deal goes away you will be paying a small amount more.

      Again, it’s cheaper either way if you don’t buy the phone directly from Tmo.

  • guest

    Your information is incorrect. The value plans still include a two year contract. And the “iconic device” is rumored to be the iPhone early next year.