January 26, 2015

T-Mobile to hang up on Classic Plans in 2013

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T-Mobile USA will sunset its Classic Plans in 2013 and say good bye to device subsidies. The carrier’s CEO, John Legere, today announced that future subscribers will pay an upfront fee for handsets and tablets and then pay the remaining balance over monthly installments. 

This is a rather large deal as all other top players in the industry have subsidized devices for consumers just so long as they agreed to service over the next two years. As of today, T-Mobile offers two options for customers: Classic, with the subsidy and two-year contract and Value, where customers pay full price for a  smartphone but get a lower monthly rate.

Obviously part of a strategy to bring aboard the Apple iPhone, Legere indicates that the plans will be “fair and simple”.  Adding that consumers may be able to purchase the “most iconic device in the world” at $100 and then break it down over 20 months at $15-$20 per month, the CEO seems optimistic that the public will embrace the changes.

Via Fierce Wireless

25 Comments

  1. Chris Moeller
    Reply

    Awesome! I for one think that up front costs for the service, separated from the device cost is the way to move forward.

    I’m not sure why the company would be doing this, aside from customer benefit, since they can’t hide extra charges in the “monthly fee” as easily- consumers won’t be spending $800 on a phone unknowingly over the life of their contract.

  2. Michael Jansen
    Reply

    I see no problem with this, I’ve been on their value plan for a year now. And they do sometimes have deals where you can get phones at a cheaper upfront cost for value plans, but you pay the difference off each month for 20 months.

  3. justdaven
    Reply

    Actually it is basically the same thing, from their stand point, but the early termination fees which the courts said violates anti-trust. Calling it financing the phone, rather than requiring a contract, lets them take less risk, and have the same reward. Most people won’t replace their phone ’til they pay off the last one… If they do they have to pay for both…

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