T-Mobile Eliminates Contracts
But company's new wireless plan also nixes phone subsidies
By Matt Cantor, Newser User
Posted Mar 26, 2013 6:30 AM CDT
In this Wednesday, Sept. 12, 2012, file photo, a man using a cellphone passes a T-Mobile store.   (AP Photo/Mark Lennihan)

(Newser) – T-Mobile is ditching a once-inescapable part of wireless life: the contract. The company had been offering contract-free plans as an option alongside two-year contracts, CNET reports; now, according to the T-Mobile website, contract plans are a thing of the past. An example of a new plan: For $50 a month, you get unlimited talk, texting, and web, plus 500MB of high-speed data. Unlimited high-speed data will run you $70 a month. But that's not the full picture: You've also got to pay for your phone without the subsidies normally associated with contract plans, which knock pricey phones (new models can cost $600 to $700) way down (typically to around $200 with a two-year contract).

Now, T-Mobile will now charge an upfront fee ($60 in the case of the $550 Galaxy S3) and tack the remainder of the cost onto the monthly bill for two years (in that case, $20 per month). The fees stop once the phone's paid for, and at that point, you own the phone. The Wall Street Journal observes that the move could prod customers to choose cheaper phones, as they do in Europe, Japan, and other unsubsidized markets. But it adds that it's a risky move for the fourth-place carrier, which has lost 4 million contract customers in the last two years.

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Showing 3 of 8 comments
ekwoodard
Mar 29, 2013 10:40 AM CDT
It is really an expected step when they are still charging you for the same service that you can get paid to use. I have not paid a cell phone bill since October of 2012 and am now receiving $130 per month just for using my phone and telling my friends about it. I shared about it on Facebook a few times and a few friends joined and from there it has naturally grown. I am Boise, Idaho and the T-mobile coverage is the second best in the area. With all the new towers they are installing I would expect the coverage to grow nationwide.
augie2
Mar 26, 2013 9:00 PM CDT
All phone companies should dump contracts. If their service is any good and they're honest people will stay with them. This should apply to ALL contract companies. Contracts are how these companies "keep" customers.
kateINC
Mar 26, 2013 1:43 PM CDT
And "unlimited" with this company means "Subject to a Fair Use Policy" of 1G per calendar month, after which NO video, games, music or other downloads.... and speeds crawl down to like 35kb/sec. In fact, slowest provider I have used since dial up in the 1990's. Customer service? A total joke. This company doesn't care about you or about providing a good service. I have this and am in the UK, and when my pre-pay is used up, I will be switching, even if it means that the only thing I can find is two cans and a string, it will still be faster, and less likely to be blocked every time I want to look at or post something!