We're hearing a ton of interesting information about T-Mobile's plans for the future today as part of Deutsche Telekom's analyst conference, and this may be the biggest yet. Starting in 2013, T-Mobile USA will no longer be subsidizing handsets with 2-year contracts, and will instead sell devices at full price or on installments. This means that devices and service will be completely separate going forward.
This is almost a carbon copy of its current "Value Plan" offerings, which give you cheaper monthly service prices (generally $20-$30 less) when you buy a phone full-priced or bring your own -- a model international users will be familiar with. T-Mobile said that 80-percent of its new line activations were on Value Plans in the last quarter, which means that this won't be too big of a shift from the way they're currently operating.
To the end user, the overall cost of smartphone ownership for the 2-year contract period will decrease, even when buying a device with monthly installments. Real savings can be had when holding onto a device for a longer period of time as well. The real roadblock here is going to be one of consumer education on the part of T-Mobile, which needs to explain to customers the benefits of this model. U.S. wireless customers are very comfortable with the idea of a subsidized handset that is bundled together with service.
- Filed under: