T-Mobile Kills Phone Contracts: Offers iPhone 5 for $99

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Cellphone rate plans could easily be renamed as rape plans– complex structures that charge you a variety for different services

T-Mobile is introducing the Simple Choice plan- unlimited text, talk and data with no caps, and giving you a related pricing structure; $50-$70 for 500MB/ 2GB/ Unlimited Everything. Sure, some of what you save in service you will lose in purchasing the cellphone handset, but it still offers you more choice than other networks.

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It says something about the state of the mobile plans today that this news created a round of spontaneous applause from the crowd, but though it might be pretty late for a network to start adapting, at least they are realizing what people want.

T-Mobile are also shedding contract options, which allows you to cancel on a month to month basis, with no termination fee.

President and CEO John Legere took to the stage to share this news.

He shared that the iPhone 5 is going to be making its way to the network, and will cost a $99 down payment from April 12th. It will have 4G capability, and it’s a brave move for T-Mobile, as due to the lack of contract services, many could purchase the handset.. and then leave T-Mobile. Yes, they can JUST LEAVE THE NETWORK AND KEEP THE IPHONE 5 for $99 (plus monthly payments). The hook – they’re hoping- is that customers will stay with the carrier, as their refreshing pricing option and flexibility may appeal to many.

Here’s the full breakdown.

  • iPhone 5-$99.99 down and $20 per month for 24 months.
  • iPhone 4S – $69.99 down and $20 per month for 24 months.
  • iPhone 4 -$14.99 down and $15 per month for 24 months.

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To demonstrate the issues in the carrier land, Legere played two short videos; one with Daily show host Jason Jones taking to the street in a E Network Real Life special to see how people felt about their contracts, and a rather odd Western short, where four cowboys roamed the Wild West- all intended to represent the different carriers and the way they are trapping people into contracts they don’t want.

“See that Wild west show?” Legere asks. “That nasty guy on the end was Sprint, right?”

Key points to take away:

  • AN iPHONE 5 FOR $99 (plus monthly payments)

T-Mobile aren’t the only people offering contract free cellphone plans, but the fact they are looking at the post pay market, rather than prepay is intriguing. MVPN networks such as Ting and Straight Talk might not be thrilled by thus; everything Legere says about ‘not tying you to an outdated phone’, and ‘a new way to look at wireless’, is what they’ve been saying for years- but T-Mobile has the money to shout a lot louder.

Legere likes to stress that for an iPhone user, it would cost “over a $1000 less than AT&T over a 2 year experience”, and these new non contract plans will be available on a number of cool 4G capable handsets- including the Samsung Galaxy S4, BlackBerry Z10, T-Mobile Sonic 2.0 Mobile HotSpot LTE, Samsung Galaxy Note II and HTC One.

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The other interesting factor to note is that T-Mobile are rolling out a 4G LTE networks in seven cities- Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose, and Washington, D.C. Their goal is to reach 100 million Americans by midyear and 200 million by the end of 2013. Speed test demos at the event showed the potential of this network which will switch between LTE and 4G in areas where LTE is yet to launch.

Is this enough to keep people coming to T-Mobile, or are these new tactics a little too late?

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