Finally! T-Mobile USA Confirms No-Contract iPhone 5 Release Date

Amid a flurry of announcements, T-Mobile also announced its new 4G LTE network is live in seven cities and that its iPhone 5 comes with a payment plan since it doesn't give the generous subsidy offered by its competitors.

Craig Galbraith, Editorial Director

March 26, 2013

4 Min Read
Finally! T-Mobile USA Confirms No-Contract iPhone 5 Release Date

**Editor’s Note:

Click here

for our list of February’s hottest selling smartphones to see how the iPhone 5 fared against competition from Samsung and others.**

T-Mobile customers who have wanted an iPhone but have stayed loyal to the Bellevue, Wash.-based carrier instead, are finally getting the payoff.

T-Mo announced Tuesday that a long last, it will carry Apple’s iconic device. The iPhone 5 goes on sale at America’s fourth-largest wireless operator on Friday, April 12.

What might be even more interesting is the pricing plan the fact that there is none. The iPhone 5 will be available without a contract. T-Mobile’s new Simple Choice Plan starts with a base rate of $50 per month for unlimited talk, text and Internet access. You get 500MB of data at that rate. Customers can add 2GB of data for $10 per month, per line, or unlimited data for an additional $20. You can get a second line for $30 per month. There are no caps and no overages.

Of course, without a subsidy, you’re going to pay more for the iPhone than at other carriers. It’ll set you back $580; however, T-Mobile will permit you to pay just $100 down and then shell out $20 per month for 24 months. The carrier is the first to offer such a payment plan.

This is an important day for people who love their iPhone but cant stand the pain other carriers put them through to own one,” said John Legere, president and CEO of T-Mobile USA. We feel their pain. Ive felt the pain. So were rewriting the rules of wireless to provide a radically simple, affordable iPhone 5 experience on an extremely powerful network.”

The iPhone 5 will operate on either T-Mo’s HSPA+ network or its new 4G LTE network. The company announced on Tuesday the launch of LTE service in seven major cities, including Baltimore; Houston; Kansas City; Las Vegas; Phoenix; San Jose, Calif.; and Washington, D.C. The company’s LTE network is expected to reach 100 million people by mid-year and 200 million nationwide by the end of 2013. T-Mobile’s HSPA+ network reaches 225 million people in 229 metropolitan areas.

The shift to no-contract plans is considered radical for a major operator. While many smaller carriers offer prepaid, no-contract options, T-Mobile is the first of the big four to do so. The company says iPhone owners can save $1,000 over the course of two years without being on a contract.

The change in strategy is receiving generally positive reviews from industry insiders. Mike Roberts, principal analyst for Americas at Informa Telecoms & Media, calls it the “right move at the right time.”

“T-Mobile’s new ‘un-carrier’ strategy is [a] bold and long-overdue attempt to revive its fortunes by clearly differentiating itself from other major U.S. mobile operators on the four key fronts of prices, services, devices and network,” Roberts said. “As the smallest of the U.S. big four mobile operators, T-Mobile is finally making the type of bold moves necessary to shore up its competitive position and end the slow bleed of subscribers leaving for rival operators which has weighed on its results for years. While launching LTE and the iPhone are a case of catching up with the competition, T-Mobiles new Simple Choice Plan and aggressive prices will appeal to consumers and business alike, and should put the operator on the road to recovery. Of course, such aggressive moves could also pressure margins and spark a price war, but those are the types of risks T-Mobile has to take to change the competitive landscape in the U.S.”

Meantime, Yankee Group senior analyst Rich Karpinski is taking more of a wait-and-see approach.

” … T-Mobile’s new deals aren’t quite as big a bargain for multiple devices or families (or for customers that don’t use or like paying for unlimited voice minutes),” Karpinski noted, commenting specifically on a SlashGear article. “In addition, customers must factor in their device situation paying full-price or financing a very high-end phone will add $20 or so to their monthly fee, bringing out-of-pocket costs closer to on par with traditional plans in some cases. And with T-Mobile’s LTE network just starting to go live, customers must make yet another complex decision on network and device availability and timing. That all adds up to a relatively complex decision environment (especially for the next few monthsor when it really counts), which makes T-Mobile’s launch of this new device/service approach even that much greater of a marketing challenge.”

T-Mobile also said it’s getting the Samsung Galaxy S4 on May 1; it, too, will cost $99 down. The new BlackBerry Z10 is available from the carrier now.

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About the Author(s)

Craig Galbraith

Editorial Director, Channel Futures

Craig Galbraith is the editorial director for Channel Futures, joining the team in 2008. Before that, he spent more than 11 years as an anchor, reporter and managing editor in television newsrooms in North Dakota and Washington state. Craig is a proud Husky, having graduated from the University of Washington. He makes his home in the Phoenix area.

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