T-Mobile USA to Remove Smartphone Subsidies and Offer iPhone in 3-4 Months
T-Mobile USA already has over 1.9 million iPhones on its HSPA+ network, despite not officially offering the smartphone. The company, however, is planning to officially bring the iPhone to its network later this year, and is looking to make major changes on how other carriers have offered it in the past. According to Reuters, the Bellevue, Washington based carrier plans to remove smartphone subsidies, and officially offer the iPhone in 3-4 months.
They’re all, I would call them, in three to four months as opposed to six to nine months, [T-Mobile USA CEO John] Legere told Reuters in an interview at the Consumer Electronics Show in Las Vegas.
The company will charge customers pay full price for the iPhone and will lower prices on voice and data plans every month. As a result, customers will be able to save money on the iPhone over several months, instead of paying the subsidized cost upfront. This in turn, also benefits T-Mobile as the company makes back the initial cost of the iPhones from Apple, and then offers customers cheaper plans, which may cause them to stick with the carrier longer.
According to The Wall Street Journal, other carriers such as AT&T and Verizon may also be looking to remove subsidies for their smartphones if T-Mobile’s plan works well. However, both AT&T and Verizon CEO’s have noted that the plan may not work well because customers are accustomed to paying subsidized prices for smartphones and may look at the change as an increase in price.
T-Mobile believes that removing subsidies will work for the iPhone, with the company also making moves to improve its network. T-Mobile USA is reportedly in talks to acquire regional carrier MetroPCS later this year, and is also negotiating deals with Dish Network and Leap Wireless.