T-Mobile to make people pay full price for its phones in 2013

There's already been some big news from today's T-Mobile investor conference; namely that the wireless carrier will begin offering some unnamed Apple products for sale in 2013. Now there's word of an even bigger shakeup in how T-Mobile will handle sales of both its phones and its wireless calling plans next year.

Engadget reports that T-Mobile announced plans to move its customers to their "Value Plans" exclusively in 2013. T-Mobile's Value Plans entail customers purchasing new phones at their full price, rather than at reduced prices that are subsidized by a multi-year contract. Value Plans typically have lower monthly fees than those under contract. T-Mobile also allows users to bring in their own phones and use the company's SIM cards under their Value Plans. There's no word on any specific dates for when this new system will begin.

On the one hand, this is a big and bold move by T-Mobile, which is currently the fourth largest wireless provider in the US, behind Verizon AT&T and Sprint. It certainly will make T-Mobile stand out and it will also provide customers with cheaper monthly fees for its phones.

On the other hand, the big wireless carriers typically hook customers on their service with cheap prices for the latest smartphones in exchange for keeping them under contract for two years. That system seems to have worked pretty well so far. It remains to be seen if T-Mobile's move will be one that is viewed as competitive or one that's seen by consumers as charging them more up front for a smartphone.

Source: Engadget | Image via T-Mobile

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Well if it were not for my contract I would have not been able to get my Sony Xperia ion for $0.00. It is the only way I could get a phone and have no interest in getting a second hand phone. That said with a 720p display and 12mp camera NFC it has everything I could want in a smartphone and more. Having been on T-Mobile at one time I would never use them again. T-Mobile would drop a call just going from the kitchen to the living-room (not a exaggeration!). AT&T while they may be a higher price I never get dropped calls. On T-Mobile I could watch the signal meter go 0 to 5 over and over stick in a AT&T sim card on the same hardware and 5 bars constant.

I have never been on a contract think its a rip off. I just buy a second hand phone and then pay £10 a month for 250 minutes unlimited texts and used to be unlimited internet but now down to 1gb. But thats more than enough. If I really wanted unlimited I would just add £2

Heck, buy a phone outright, go to something like straight talk, I can buy 3 months for 130 bucks. With my old contract, one year would be 1500 bucks. With four 3 month cards from straight talk, I can save close to 1000/year.

Im on a Value plan right now, to clear some things up with this plan. yYu have a choice to either pay full price up front, or pay a down payment with a monthly finance payment. Im looking at the Nokia Lumia 810 and its a $149 down payment with $20 a month over 20 months.

In Germany, you can choose between contracts with and without a handset.
Obviously getting the handsetless contract will cost you less per month, but me being an iPhone user I'd be stupid to not get it on contract.
I can get it for MUCH less with my contract with Deutsche Telekom (T-Mobile Germany if you will).

It's astounding that in the US you typically don't have that choice unless you switch to a carrier that specializes in PAYG.

GS:mac

Great move. A sim only contract plus the price of the phone will be cheaper over the contract period than the "deals" on offer.

The only issue is not everyone can afford to buy a high end device this way, however that might make people re evaluate if they really need such expensive phones.

Well, if the manufacturers of the high end smart phones, start to see sales really drop because of things like this, they can do one of two things....go out of business, or DROP
the price of the device. It's always shown that things like the iPhone, "costs" about 250.00
to manufacture, then apple sells it for 600-800 dollars. They can drop the price, still make a profit, but just not as much profit.


lt8480 said,

The only issue is not everyone can afford to buy a high end device this way, however that might make people re evaluate if they really need such expensive phones.

I do not think anyone will re-evaluate because if they want that expensive mobile phone they will get it. It is possible to upgrade to a new mobile phone going through home shopping network.You do not have to pay all upfront. When upgrading pick flex pay and your payment will be cut into 4 payments. That is not a credt line,they use whatever card that you want to use. You can even use your debit card. That is where I will be upgrading to samsung note 2 soon.

lt8480 said,
Great move. A sim only contract plus the price of the phone will be cheaper over the contract period than the "deals" on offer.

The only issue is not everyone can afford to buy a high end device this way, however that might make people re evaluate if they really need such expensive phones.

Wonder if ppl will want to pay the extortionate prices apple charge for the iphone seeing as theyll have to buy it up front on t-mobile now. me thinks not to many

Having left the world of contract phones in 2009, I'm going on 3 years of $25 a month Virgin Mobile "unlimited" data with 300 voice minutes. I briefly tried T-Mo's monthly with a "bring my own" HTC, but found their coverage was pretty lacking in SE Idaho a few years back.

Brandon said,
Hmmm. Unlimited VZW 4G or T-Mobile....

My experience with T-mobile has been spotty reception but awesome download speeds and lower price.
Verizon had great reception and fast downloads but a huge bill every month, depends on your needs and what you're willing to fork over every month.

On the Value Plan, if you buy the phone from T-Mobile, you make a "down payment" which is roughly equivalent to subsidized pricing on other networks. You then pay $5-$20 per month (depending on phone), in addition to your monthly, over a 20 month period until the phone is paid off.

Alternatively, you can ask that the remaining amount of the phone be added to an upcoming bill so that you can pay off the balance. And, of course you can bring your own GSM enabled phone.

All in all, you can come out paying anywhere from $10-$25 less per month than you would on other carriers depending on the phone you buy and/or bring as well as the plan you choose.

Not everyone can afford to plop down $899 for an iPhone 5 64GB or $799 for a 32GB and can pay for it over time. Think of a family of 4 to shell out that kind of money at once.

It's great for some and not great for many that can't recognize the savings over time.

mrmomoman said,
Not everyone can afford to plop down $899 for an iPhone 5 64GB or $799 for a 32GB and can pay for it over time. Think of a family of 4 to shell out that kind of money at once.

It's great for some and not great for many that can't recognize the savings over time.

That's true. Many people won't pay such high premium for a cell phone and maybe manufacturers will align their prices a little bit to make a little more sense. After all you could buy a whole computer for the retail price of an iPhone (or a Lumia 920 at $699 which is as much as the price of a Surface with a keyboard)...

Except a brand new lumia here in the US can be picked up for $450 unsubsidized - which is exactly what I paid.

mrmomoman said,
Not everyone can afford to plop down $899 for an iPhone 5 64GB or $799 for a 32GB and can pay for it over time. Think of a family of 4 to shell out that kind of money at once.

It's great for some and not great for many that can't recognize the savings over time.

Then buy one from a store that offers interest free time period - that is what I just did when I purchased my Lumia 920 recently where I put it on a 15 months interest free deal with the store and bought a SIM for the local carrier.

mrmomoman said,
Not everyone can afford to plop down $899 for an iPhone 5 64GB or $799 for a 32GB and can pay for it over time. Think of a family of 4 to shell out that kind of money at once.

It's great for some and not great for many that can't recognize the savings over time.

Maybe that family of four shouldn't blow so much money on things they don't need, period.

Oh wow that's awesome. Might actually go back to T-Mobile next year if they don't butcher it all up. I hate subsidized phones, contracts and all the B$ that comes with it.

the industry has been very good as conditioning people thinking that is the only way to do it as it has been in the past. I tell people all the time to buy a second hand phone and don't sign any contract and they just look at you with a blank look clearly not knowing what you are trying to say. Almost all people just simply don't know you can do that.

thealexweb said,
Why get a contract at all then? Buy the phone outright elsewhere and got only a sim-only contract or PAYQ

rippleman said,
the industry has been very good as conditioning people thinking that is the only way to do it as it has been in the past. I tell people all the time to buy a second hand phone and don't sign any contract and they just look at you with a blank look clearly not knowing what you are trying to say. Almost all people just simply don't know you can do that.

Tell me about it, two years ago people were baffled that I had a 3GS and was only paying £10 a month and yet still had unlimited data.

i hate the subsidizing standard, hides your "real" price you are paying for stuff. When you take the subsidized price, and factor in the higher monthly cost, you could be paying an extra $1,000-$1,200 over 3 years while the whole time you thought you got a "free" phone.

rippleman said,
i hate the subsidizing standard, hides your "real" price you are paying for stuff. When you take the subsidized price, and factor in the higher monthly cost, you could be paying an extra $1,000-$1,200 over 3 years while the whole time you thought you got a "free" phone.

Not really. You don't compare the price of the plan between networks?

I'm sure many people who purchase new phones will be upset, but seeing as how I'll soon have a Nexus 4 in my hands (after another 3-4 weeks of waiting for it to ship :\), this is great news for me. I'll just keep using my Nexus 4, and have a cheaper wireless plan to boot