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T-Mobile Phasing Out Phone Subsidies

Article Comments  56  

Dec 6, 2012, 4:31 PM   by Rich Brome

The CEO of T-Mobile USA today announced that the company plans in 2013 to stop offering traditional service plans that include a subsidy to cover the cost of the cell phone. Instead, the company will only offer its "Value" plans, which are typically cheaper than traditional postpaid monthly plans offered by other carriers. Customers can still get a phone for a low-up front price and pay over time with a monthly installment plan. Unlike a traditional phone subsidy, the installment plan ends automatically when the phone is paid off. The Value plans make the phone and service costs separate and transparent.

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Rusty Shackleford

Dec 7, 2012, 2:54 PM

Traditional plans are like leasing cars

The traditional upgrade, contract, repeat process has always bugged me because it's basically the equivalent of leasing a car: people can't afford it up front so they need to pay for it in monthly installments and then act indignant at the early termination fee the carrier expects if they terminate early. The other thing that has bugged me is that the service costs are inflated to compensate for this, yet after the device is out of contract (i.e. paid off) the service costs remain high because you are expected to upgrade. After all, everyone upgrades within 2 years anyway because they would just DIE if they were seen with last year's iPhone model or an Android that can't handle the OS with the latest goofy name. (Seriously people, it's j...
Whenever Metro PCS and carriers like them have to spend money to cover areas that aren't population dense then the comparison can be made.

Until then, comparison of regional population dense carriers who offer cheap service to national carriers who...

Dec 7, 2012, 12:29 AM

What happens to National Retail?

Since it's value plan only, what happens to stores like Best Buy, Walmart and Costco since they can't do value plans??
Hopefully they get cut out. I'm really tired of having to compete with Walmart's 97-cent phones, especially when the customer gets a phone from Walmart, Walmart screws it up because they have no idea what they're doing, then I have to fix their mess.
Best Buy doesn't sell post-paid phones from T-Mobile.

Dec 7, 2012, 1:21 AM

Truth in Advertising is News?

So, they have done the right thing and are not hiding the phone cost in the service charges. What do they want? A cookie?

Tmo is like escort that won't kiss on the lips because they've drawn some arbitrary moral line that no one cares about while she is getting Donkey Punched.

Woo woo la de flipping da...
I care about it, and I'd give them a couple cookies...
The sad thing is the number of people who are so dense that they don't realize this is going on. They really do think their iPhone 5 cost $200 and that the carriers are just big meanies for sticking them with a 2 year contract. The masking of the tr...
MadFatMan said:
So, they have done the right thing and are not hiding the phone cost in the service charges. What do they want? A cookie?

Tmo is like escort that won't kiss on the lips because they've drawn some arbitrary mora

Dec 6, 2012, 5:16 PM


Finally a major carrier will stop this lunacy of hidden phone costs.

They already have this option, but I predict that there will be an increase in the availability of fairly-priced unlocked phones in random retail stores when this becomes the standard.
Hopefully, other carriers will follow suit.
Is this how they do it in Europe?
This is actually nothing more than a phone subsidy under a different name....people will still be getting their phones from the carrier...which is the real source of the problem.

If they made a complete separation....the carrier not being respo...
When a smartphone cost more than a laptop or a tablet there is no place for the word "fair"!

Dec 6, 2012, 6:22 PM

This is how the industry should have been the whole time.

It presents the cost of the phone clearly instead of offering "free" phones, it allows customers to tailor the monthly payment according to their budge(higher end phones have higher payments, etc), and the customer's bill gets cheaper when it's paid off. Customers also aren't held to a certain time frame for a new phone. Just pay off the old one and get a new one whenever you want.

Unfortunately, it'll be an uphill battle to get people to accept this, and it already has been. Customers are so accustomed to "free" and "cheap" phones that they don't realize what a phone costs, and we still have people that take Classic plans, even though the plan is more expensive, just to to get the "discounted" phone.
Your mostly correct. This is the way it should have been. However they target low income naturally with the cheap prices. With no free phones that group they target is likely to go to the next one who will offer free phones. If a carrier who targets h...

Dec 6, 2012, 10:12 PM

Now they need an advertising campagin

A few good commercials explaining the benefits of this and it will have consumers at least thinking. Like Sprint and their data sharing commercials, it can be exaggerated but the consumer is the winner if they understand and think about subsidies.

Dec 6, 2012, 6:33 PM

As sales rep for tmo

As a sales rep for tmobile in Idaho under center partners I can say this is just one bad move that follows a long line of bad moves. I don't think they are going to end any time soon. Things were good before they tried to sell to AT&T. Oh well! ..... Sent from my AT&T one x+ 😁
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