At an analyst conference last week, T-Mobile CEO, John Legere, confirmed that the iPhone would indeed be a part of the carrier’s 2013 smartphone lineup, and that, unlike other carriers, T-Mobile won’t be subsidising the cost of the device.
Presently, carriers offer the latest iPhone starting at $199 with a two-year contract, retrieving the actual cost of the device through the two-year period by charging a little extra for your monthly plan. T-Mobile intends to move to the unsubsidized model, offering phones at full price and reducing your recurring monthly costs under its “Value Plans.”
T-Mobile says that there’s a lot of demand for its cheaper value plans, which accounted for 80 percent of its activations last quarter. However, convincing potential customers to spend upwards of $649 as opposed to $199 is going to be a tough task for the carrier, even if it does turn out to be cheaper over a 24-month period.
For this, T-Mobile plans to devise an instalment model, which closely resembles the current subsidy model. GigaOm has the details:
[CEO] Legere said that T-Mobile would offer the iPhone in a unique way. He implied that T-Mobile could heavily finance the device, selling it for $99 and then charging $15 to $20 a month in payments over 20 months. That kind of financing plan, however, would look very much like subsidized contract plan to the customer.
The carrier would also continue encouraging unlocked iPhone owners to hop on to its network, as detailed earlier.
T-Mobile’s pretty much revealed its entire iPhone strategy except for when it’ll actually start selling the device. It could either start after the rollout of its iPhone compatible 1900MHz 4G HSPA+ network, or it might want to wait until its 4G LTE network is ready, which could take more than six months.
Do you think T-Mobile’s plans of abandoning smartphone subsidy would succeed? Would you buy an unsibsidized iPhone on T-Mobile’s networks for the cheaper value plans?