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T-Mobile to Kill Subsidies Next Year
Will Attack AT&T in Ads, Offer iPhone Payment Plans
by Karl Bode 08:58AM Friday Dec 07 2012
In addition to T-Mobile announcing that they'll start selling Apple products in 2013, is the potentially more interesting fact that they'll stop selling subsidized phones. Speaking at Deutsche Telekom's annual investor conference, T-Mobile CEO John Legere confirmed that subsidized phones will no longer be a part of the company's business model next year, with consumers either paying full price for devices, or choosing to pay the device off in installments.

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T-Mobile will offer the iPhone to consumers, for example, if they pay an up front $99 and then pay off the remaining cost of the device through $15 to $20 monthly payments tacked on to their existing bill. T-Mobile hopes that this helps differentiate them in the market moving forward.

"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," said Legere.

Legere also insisted that while their value (non-subsidized phone) plans earn them less revenue, they'll make up the difference by not having to subsidize devices. The CEO also noted that Value customers tend to stay on board an average of two months longer than Classic customers do.

It remains unclear when T-Mobile will launch the iPhone or LTE, but the company made it clear a core part of their strategy will be picking on AT&T. The CEO announced that a core marketing slogan for the company will be: "you love you iPhone, you hate AT&T." "I want you to get used to that tone because that is the way we're going to play," insisted a CEO whose company just a few months ago was eager to merge with AT&T.


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buddahbless

join:2005-03-21
Premium
Reviews:
·T-Mobile US

2 recommendations

reply to Network Guy

Re: Prepaid

Network guy you are pretty much on point, as the trend in the US has shifted there are more prepaid phones activated than postpaid and TMO is on to this. Give them a good network that works where they want and they will happily purchase there own phone at whatever retail price is or where ever they can find the phone they want for the price they want.

We do similar in America with our automobiles, we can purchase them from anywhere and anyone, as we will still have the option to chose whatever road we want to drive on ( local road, highways, or tollways) and purchase gas from whatever fueling station we prefer, and chose any repair station we like after our manufacture warranty is up. Imagine if cars where sold like cell phones. "Buy this make and model of car you can only drive on these roads and fill up @ BP stations only ",what a nightmare that would be.

Network Guy
Premium
join:2000-08-25
New York
kudos:2
Reviews:
·Future Nine Corp..
·T-Mobile US

2 recommendations

I think Tmo is starting to realize the value behind focusing their costs in running the network and leaving the handset nitpicking up to the consumer, following on the European wireless industry model. Since the advent of Android and rooting, the add-ons most carriers have gotten used to cashing in on (ringtones, music download, etc) have all but dried up.