By Lisa Johnston
New products on display at the American International Toy Fair, held in N
New York — T-Mobile executives took to the stage today to spell out the details of their no-contract, unsubsidized-handset strategy; announce nationwide April 12 availability of a T-Mobile-optimized LTE iPhone 5 and the immediate availability of 4G LTE in seven major markets.
The carrier said it would expand LTE service to markets with 100 million people by midyear and to markets with more than 200 million people by year’s end, as well as offer the iPhone 4 and 4S in select markets, and bring the LTE-equipped Samsung Galaxy S4 to the network around May 1.
The carrier today also launched the BlackBerry Z10 at $99 plus 24 installment payments of $18/month.
In a bid to reverse its subscriber decline, the nation’s fourth-largest carrier by subscriber base also unveiled the tag line “T-Mobile un-leash” and announced plans for a new promotion campaign to promote its “un-carrier” status. The campaign will start with a TV commercial that features Old West cowboys and mocks T-Mobile’s three national competitors for telling the townsfolk what to do.
T-Mobile has rolled out its new “radically simplified” rate plans, offered only with unsubsidized phones, through its direct channels, but the programs will become available through select indirect channels as well. Best Buy confirmed that it would offer the rate plans and unsubsidized phones. “I can confirm that we will offer the T-Mobile value plans to consumers along with the unsubsidized phones,” a spokesperson told TWICE. “I can’t confirm the timeframe at this point but work is in progress.”
Best Buy did not say whether it would offer consumers an installment-plan option, as T-Mobile stores are doing, to pay off an unsubsidized handset with a down payment and 24 equal monthly payments. “I don’t have an update on financing options at this point,” the spokesperson said.
For its part, T-Mobile said in a statement that its Simple Choice plans would be available “through select dealers and national retail stores.”
In launching the Simple Choice Plans, T-Mobile president/CEO John Legere promised that despite the lack of a phone subsidy, consumers opting for the new plans will save money compared with other national carriers over a two-year period. Some consumers with a single-line plan and an iPhone 5 will save as much as $1,000 over two years compared with AT&T plans with phone subsidies, he contended.
Consumers, however, can also opt to bring their own phone to the T-Mobile network and avoid a handset purchase altogether. Because there is no contract, consumers can leave the network anytime they want if they’re dissatisfied without paying a penalty, he said.
Credit-challenged consumers who don’t qualify for one of the new plans on a postpaid basis will be able to get the plans on a prepaid basis, Legere said. It doesn’t seem likely that credit-challenged prepaid customers, however, would be allowed to pay off a handset on an installment plan, given a printed T-Mobile statement that “financing is available on approval of credit.”
T-Mobile’s new strategy, Legere contended, will appeal to consumers irritated by being locked into two-year contracts and getting hit with overage charges when they exceed their monthly usage limits. All of the T-Mobile plans offer unlimited talk and text and 500MB of 4G data at $50/month for a single line, with unlimited data at 2G speeds when the 500MB cap is exceeded.
Additional 4G data can be purchased for a single line in 2GB increments at $10, and an unlimited 4G data plan is also available.
As for selling only unsubsidized phones, Legere said, T-Mobile is simply being transparent, whereas its competitors are hiding the cost of phones in their monthly rate plans. “We’re just not lying to you,” he said.
T-Mobile set the price of an unsubsidized iPhone 5 at $99 down and 24 equal monthly payments of $20, for a total of $579. That compares to AT&T’s price for an iPhone without contract starting at $649 for the 16GB iPhone 5, which is also available with higher memory capacities.
The iPhone 4S will cost $69 plus $20/month for 24 months, and the iPhone 4 will cost $14 down plus $15/month for 24 months. Although the iPhone 5 will be available April 12, T-Mobile didn’t specify an availability date for the other iPhone models, which will be available only in select markets, the company said.
Although the iPhone 5 will be available April 12 through T-Mobile’s direct channels and through select dealers and national retailers, the company didn’t specify when the iPhone 4 and 4S would be available or how it would be distributed.
For optimum performance on the T-Mobile network, the iPhone 5 will be equipped with 4G LTE in T-Mobile’s AWS band and 4G HSPA+42 in T-Mobile’s AWS and 1900MHz bands. The iPhone 4 and 4S feature slower 3G HSPA technology.
HSPA+42 service is available in markets with a population of 225 million people and offers performance that’s the same or better than other carriers’ LTE networks, executives contended.
Besides operating in HSPA+42 markets, the iPhone 5 will operate in LTE mode in the seven markets that the company turned on with LTE service today. Those markets are Baltimore; Houston; Kansas City, Mo.; Las Vegas; Phoenix; San Jose, Calif.; and Washington. The LTE network is expected to reach 100 million Americans by midyear and 200 million by the end of 2013.
LTE speeds have exceeded 60Mbps, clocking higher than other carriers’ LTE networks, Legere said, although some of that boost presumably is the result of a lack of congestion on a network that has fewer subscribers than the competition.
T-Mobile will be the only carrier offering the iPhone 5 with HD Voice to improve voice quality, Legere noted.
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