The mobile market has gotten tough, what with companies canceling contracts and deeply discounting their product. It has been hard for T-Mobile to compete. Now the company has quietly decided to stop offering contract plans and with it, it has ended phone subsidies. The result is a program where customers pay an upfront cost for their phone and continue to pay it off in monthly increments. Starting April 12, the company will offer the iPhone at $100 upfront and $20 per month for the next two years. Other devices, like the Samsung Galaxy phones, will be available at lower prices.
This move might help give the struggling company get a leg up, as it will become the first major U.S. carrier to drop smartphone subsidies. According to the L.A. Times, users will now be able to purchase phones at their full price, pay in installments or bring their own device and simply pay for the plan. Prior to this, with a contract plan, customers typically agree to sign up for two years of service in return for getting a phone at a lower cost than it would without the subsidy.
On the T-Mobile website, the company announced it will charge $50 a month for one line, $30 for a second line and $10 for additional lines after that. This includes unlimited talk, text and data with up to 500 megabytes of high-speed data. The newspaper reports that users can also pay $10 more a month for an additional two gigabytes of high-speed data. T-Mobile customers can increase this to 12 GB in increments of $10 for each additional two GB per line. Or pay $20 a month for unlimited high-speed data.
According to The New York Times, even with the contract-free program, many customers may feel that they’re stuck with a commitment because of the monthly phone-pay plan. Moreover, T-Mobile’s system is only now getting the updates it needs to compete on speed. The company’s CEO, who the Times describes as “eccentric,” John Legere spoke at a press conference yesterday where he talked up the value of being a T-Mobile customer (apparently, his remarks were laced with cuss words) But experts quoted in the story say that customers have a negative opinion of the company because of its slow speed and the fact that it took so long for the company to see the Apple devices.
Now the question is whether customers will go to T-Mobile and push it out of the fourth place position behind Verizon Wireless, AT&T, and Sprint. Any T-Mobile customers out there who care to weigh in?