T-Mobile Putting An End To Smartphone Subsidies
T-Mobile’s decision to finally start offering Apple gear next year isn’t the only big news to come from the carrier today. Unlike how smartphones are sold in many other nations, subscribers in the US have been used to their carriers subsidizing the hardware through two-year service contracts. Sure, that means spending less out of pocket, but the arrangement isn’t without some significant problems. T-Mobile has been giving its users a choice for a while now, either sticking with a Classic plan with the old subsidized model, or going with a cheaper Value plan that didn’t offer device subsidies. Today the carrier has revealed that, going forward into 2013, it will begin offering only Value plans, and stop selling hardware at subsidized prices.
For T-Mobile, this makes a lot of sense, as it says that the vast majority of its on-contract customers have been going with Value plans anyway. In lieu of subsidies, customers can make a down payment when they choose a phone and start service, and then pay off the rest in monthly increments.
Considering the steep subsidies Apple gets from carriers offering the iPhone, this move seems quite likely to be tied to T-Mobile’s decision to start carrying Apple hardware next year.
Subscribers already on Classic plans will be able to keep them even as T-Mobile stops offering them to new customers.