As rumored yesterday, T-Mobile (the only major carrier in the United States that has yet to sell the iPhone) announced their plans to carry the wildly-popular Apple smartphone. The carrier will offer the iPhone through their new “UNcarrier” structure, which was also detailed today.
In an attempt to differentiate themselves from the traditional cellular contract model, T-Mobile will now sell devices with a down payment, plus monthly installment payments that range from $2 to $20 depending on the smartphone. For example, T-Mobile customers who wish to purchase the 16GB iPhone 5 can do so for $100 down, plus additional monthly payments of $20 over a 24 month period. This new structure brings the total cost of the phone to $580 over a two year period, which is only $69 cheaper than buying an unlocked, and contract-free, 16GB iPhone 5 from Apple for $649.
While T-Mobile’s new “Uncontract” plan sounds great in theory, it’s still technically a “contract”. If a customer was to purchase a phone through the carrier’s new payment plan and cancel a month later, T-Mobile would undoubtedly require the phone to either be returned or have the customer pay the remaining balance for the phone in full.
However, T-Mobile’s new structure has one major advantage: customers’ monthly bills will drop in price once their device has been paid for. Other carriers that operate on traditional subsidized plans, such as AT&T and Verizon, require customers to pay a subsidized amount upfront, the remaining balance of the device is then invisibly built into monthly plans. Furthermore, if a customer hasn’t upgraded to a new smartphone once their previous one has been paid off after two years, the carrier will continue to collect monthly payments intended to pay of the remaining balance of the phone. Alternatively, T-Mobile will lower the price of customers’ monthly bills once the device has been completely paid off. Although the new structure still sounds better than alternatives, it’s important to realize that most customers upgrade their smartphone at least once every two years, which starts the cycle over again.
Interestingly, T-Mobile also revealed that they’ll be the only carrier to support the iPhone 5’s Wideband Audio technology and, unsurprisingly, they’re calling the feature “HD Voice”.
T-Mobile is also set to offer the iPhone 4S for $70 down and $20 per month over a 24 month period and the iPhone 4 for $15 down and $15 per month for the same 24 month period as with the device’s successors.
As for plans, the carrier will charge a base rate of $50 per month, which includes unlimited talk, text and 3G data, the plan also includes a measly 500MB of 4G data. Customers will also have the choice of either adding 2GB of 4G data for $10 a month per line or $20 a month per line for unlimited 4G data. Also, customers are required to pay $30 per month for the first additional line and $10 per month for every line added after the second.
T-Mobile has also officially begun rolling out their 4G LTE service, which starts today in the following cities: Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose and Washington, D.C. Finally, customers will be able to pre-order the iPhone 5, a device that has been available on all other carriers since fall of 2012, starting April 5th. Stay tuned for additional coverage on Apple products and the T-Mobile iPhone 5.