An opinion piece on T-Mobile
As you probably know, thanks to CNET’s scoop yesterday, the iPhone was to be announced at T-Mobile’s “Uncarrier” event today in New York City. Indeed it was and you can get your hands on an iPhone 5 for just $99 and then $20/month for 24 months. Tie that in with $70 for an unlimited LTE data plan and you are ready to go.
T-Mobile’s CEO John Legere spent a portion of his presentation blasting his competitors, saying, “Stop the bullshit,” when referring to the current subsidy, two year contract model Verizon, Sprint, and AT&T are putting to use.
T-Mobile’s pricing is simple. For example, say you want a 16GB Galaxy SIII with unlimited data. For the phone, you can pay $550 outright to own, however like most, you will want to finance the price of the phone. So today, you will pay $70 and then $20 for 24 months. For the one line , you will pay $50 and then $20 for the “Unlimited Nationwide 4G.” So let’s recap:
If you paid outright for the phone, just subtract $20 and you would be at $70, with no locked-in contract.
Compare for the 16GB Samsung Galaxy SIII on Verizon:
Monthly: $110 ($40 for monthly access and $70 for 4GB of LTE data)
$110 (plus a one-time $36 activation fee, $59.99 for 900 minutes w/Rollover, $30 for 3GB of data, and $20 for unlimited messaging )
Today: $99 (a limited special, without it you pay $199)
Monthly: $110 (Unlimited everything plan)
Recap: T-Mobile and Sprint are only major U.S. carriers to offer Unlimited data, and AT&T only gives 900 minutes as the maximum for the individual.
T-Mobile is the clear winner, plus they were the first U.S. carrier to announce plans for the Galaxy S4, expected May 1 for $100 down, and $20/month.
After T-Mobile’s event, I was left with one question was about upgrades, especially mid-financed phone. T-Mobile is mulling a “membership fee” that would provide insurance for your phone and an option to upgrade two times a year at any time. This is very intriguing. Say for example, you buy that shiny new Galaxy S4, and then a year later Samsung says “Hey, check out these “can’t miss” features on the Galaxy S5!” You walk into your neighborhood T-Mobile store and trade-in your Galaxy S4 for the phone and go about your day, no questions asked, no contract. Seems pretty cool to me.
T-Mobile has set itself apart from the industry and I think they will deliver. I think the Big 3, that being Verizon, AT&T, and Sprint, are in trouble if T-Mobile can leverage their new pricing model with an upgrade plan that makes it easy to upgrade, without regard to where the customer is on their 24 month payment plan for their current device.
Most importantly, their LTE coverage and voice coverage must be on par with Verizon and they must be able to communicate effectively what sets them apart from everyone else. If T-Mobile can do those two things, they might have the power to change the industry as we know it.