Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Mobile Tech
DDoS Protection Powered By Verisign
Average Rating:
Rate this article:  
T-Mobile Nixes Two-Year Contracts

T-Mobile Nixes Two-Year Contracts
By Jennifer LeClaire

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

"The big thing behind the scenes to look at is the device financing, which is how they are making up for the lack of device subsidies for the service contract," said analyst Weston Henderek of T-Mobile's move. "Instead of paying $500, which is the full retail price on the phone, you would pay $50 up front and then over the course of two years you pay a monthly fee."
 


T-Mobile has officially done away with contracts and subsidies on its wireless devices. The "uncarrier" plan the company announced in January at the Consumer Electronics Show in Las Vegas is now live.

T-Mobile is making its Unlimited Nationwide 4G Data Plan available with no annual contract immediately. That makes T-Mobile the only U.S. carrier to offer an unlimited, nationwide, 4G data plan with no data caps or overages.

"As the 'Uncarrier,' we're doing the unthinkable," said John Legere, president and CEO of T-Mobile USA in January. "We're directly confronting the frustrations of American consumers fed up with the cost, complexity and congested networks of our competitors."

The Nitty-Gritty

T-Mobile is seeking to take advantage of consumer demand for more choice and flexibility in how they use their smartphones. T-Mobile said that since the introduction in September of its Unlimited Nationwide 4G Data plan, the plan is by far the most popular choice among its customers. In fact, the carrier reported, 46 percent of new customers opted for the new data plan in December 2012.

Weston Henderek, a principal analyst at Current Analysis, said the big plus for consumers was that T-Mobile was eliminating the two-year service contract across the board. Henderek expects T-Mobile to push that marketing message to the masses because it is the only carrier that can make the claim.

"However, the plans themselves are not nearly as simple as T-Mobile portrays them. They are actually pretty complicated when you get into the nitty-gritty, and there's nothing more affordable about them," Henderek said. "There may be some cases where the plan is a little bit cheaper, but the pricing is still similar to what they had before with their value plans."

Apples and Oranges?

Let's say the customer wants to purchase the Samsung Galaxy S III. Under T-Mobile's new paradigm, the consumer would pay $70 to initiate the service and then pay $90 a month with unlimited calling, data and texting. The monthly fee includes $20 to pay off the cost of the phone over a two-year period.

"The big thing behind the scenes to look at is the device financing, which is how they are making up for the lack of device subsidies for the service contract," Henderek told us. "Instead of paying $500, which is the full retail price on the phone, you would pay $50 up front and then over the course of two years you pay a monthly fee that pays off your phone and you add that monthly fee on to your service plan."

With competing carriers, even after the two-year period ends the bill does not go down. With T-Mobile's the bill would get cheaper after the device is paid off. At the end of the day consumers don't have a contract, Henderek said, but if you finance the device it's much like a contract because you are locked into that two-year financing plan.
 

Tell Us What You Think
Comment:

Name:



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Mobile Tech
1.   HTC One M8 Windows Phone Unveiled
2.   Verizon Tops in Mobile Networks
3.   Sprint Out with Data Guns Blazing
4.   Best Buy Leaks Moto 360 Watch Info
5.   Google Buys Contextual Image Startup


advertisement
Android 'Fake ID' Puts Millions at Risk
Users: stick to apps from Google Play.
Average Rating:
Researchers Tout Battery Breakthrough
Lithium anode could triple capacity.
Average Rating:
HTC One M8 Windows Phone Unveiled
Can be POS device for small business.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Chinese Hackers Nab Info on Millions of U.S. Patients
A group of Chinese hackers has stolen the personal information, including names and Social Security numbers, of about 4.5 million patients at hospitals operated by Community Health Systems.
 
Premier FBI Cybersquad in U.S. To Add Agents
After helping prosecutors charge Chinese army officials with stealing trade secrets from major companies and by snaring a Russian-led hacking ring, the premier FBI cyber-squad is getting a boost.
 
Apple Opens iCloud Data Center in China
Treading lightly, Apple acknowledged it has started to store encrypted iCloud personal data of some Chinese users on servers in mainland China, operated by the state-owned China Telecom.
 

Enterprise Hardware Spotlight
Compression, Deduplication Come to Violin Concerto 2200
Violin Memory has announced that data deduplication and compression capabilities are now available on its Concerto 2200 solution. Typically, users will experience deduplication rates between 6:1 and 10:1.
 
Cisco Axes 6,000 Employees in Restructuring Plan
Faced with declining profits, Cisco is laying off up to 6,000 employees in the months ahead -- a whopping 8 percent of its global workforce. That's in addition to the 4,000 jobs Cisco cut last year.
 
Web Slows, Have Internet Routers Reached The Limit?
If you encountered problems connecting to the Internet on August 12, you weren't alone. Networking experts blame the wide-scale slowdown on outdated routing systems that are reaching their limits.
 

Mobile Technology Spotlight
HTC Debuts Windows Phone Version of One M8 Smartphone
HTC is bringing the Windows Phone mobile OS to its flagship One M8 device -- the first time any mainstream flagship smartphone has been offered with a choice of operating systems.
 
Verizon Earns Top Rating in Mobile Network Comparison
A new report says Verizon Wireless was the top-performing U.S. cellphone service provider in the first half of 2014, on a nationwide and state-by-state basis, as well as in metro areas.
 
Sprint Comes Out with Data Guns Blazing
As its new CEO promised, Sprint has rolled out a new aggressively competitive price plan. The shared data plans promise twice the high-speed data and at lower prices than AT&T and Verizon Wireless.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.