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...
GET RECOGNIZED.
Let an ISACA® certification
elevate your career.

Register today and save
Mobile Tech
Tame your scariest paperwork. Find Out How
Average Rating:
Rate this article:  
T-Mobile Nixes Two-Year Contracts
T-Mobile Nixes Two-Year Contracts

By Jennifer LeClaire
March 25, 2013 2:19PM

    Bookmark and Share
"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.   Nvidia Revamps Shield as Game Tablet
2.   Apple Smart Watch Patent Surfaces
3.   iPhone 6: Bad for Apple Tablet Sales?
4.   GoTenna: Work-Thru for Dead Zones
5.   Nokia X Phones Had Identity Crisis


advertisement
Android SMS Worm on the Loose
Malware lets bad actors cash in.
Average Rating:
Review: Microsoft's Surface Pro 3
Is it a tablet and laptop replacement?
Average Rating:
iPhone 6: Bad for Apple Tablet Sales?
Most likely, it will be a huge hit.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
34 European Banks Hit by Android-Skirting Malware
Criminals have been finding gaping holes in Android-based two-factor authentication systems that banks around the world are using. The result: 34 banks in four European countries have been hit.
 
New Web Tracking Technologies Defeat Privacy Protections
Recently developed Web tracking tools are able to circumvent even the best privacy defenses, according to a new study by researchers at Princeton and the University of Leuven in Belgium.
 
Juniper DDoS Solution Aims at High-IQ Networks
In the face of more complex attacks, Juniper Networks is boosting its DDoS Secure solution to help companies mitigate the threats with more effective security intelligence throughout the network fabric.
 

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 | Small Business | 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.