During a press event in New York City, T-Mobile finally revealed its move to nuke the typical ball-and-chain contract (opens in new tab) by simplifying its lineup of consumer rate plans into one "incredibly affordable" plan for unlimited talk, text and data. The company also finally debuted its 4G LTE network service in seven major metropolitan areas across the nation.
"These bold moves serve notice that T-Mobile is canceling its membership in the out-of-touch wireless club," said John Legere, president and CEO of T-Mobile USA, Inc. "This is an industry filled with ridiculously confusing contracts, limits on how much data you can use or when you can upgrade, and monthly bills that make little sense. As America’s Un-carrier, we are changing all of that and bringing common sense to wireless."
For starters, T-Mobile introduced the Simple Choice Plan which offers one line at $50 per month for unlimited talk, text and 500 MB of data. A second phone line can be added for another $30 per month, and then $10 for each additional line. 2 GB of "high speed" data can be added for $10 per month for each line, and unlimited 4G data can be added for $20 per month for each line.
So, in a nutshell, for $90 per month, T-Mobile customers can have three phone lines with 500 MB of data. Those who need more data can shell out $120 for three lines and 2.5 GB of data, or $150 for three lines and unlimited 4G data. That's really simple, but what's the catch given there's no contract to sign? Device payments are in addition to the monthly wireless bill – that's the catch.
For example, the carrier will be offering the iPhone 5 starting April 12 (opens in new tab). After passing a credit check, customers can pay $99 up front, and then $20 per month on top of the cellphone bill for the next 24 months. Although there's no contract, customers are still bound to a two-year agreement. But when compared to buying the phone through AT&T, consumers will supposedly pay $1,000 less in the end.
That $99 pricetag won't be just locked to the iPhone 5 either: T-Mobile will offer that price with the Samsung Galaxy S4 (May 1), BlackBerry Z10 and HTC One LTE-capable phones. The older IPhone 4 and 4S models will also be available and likely sold at a lesser up-front price point. Also available will be the Samsung Galaxy Note II and the Sonic 2.0 Mobile Hotspot LTE.
Chief Marketing Officer Mike Sievert said on Tuesday that if the consumer decides to leave T-Mobile after one payment or after ten payments, they can leave with no obligations save for the price of the phone. Customers with bad credit can pay at the beginning of the month whereas those with good credit can take advantage of the deals and pay at the end of the month.
In addition to announcing its new plan, T-Mobile switched on its 4G LTE network in Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose, Calif. and Washington, D.C. The company's 4G LTE network is expected to reach 100 million Americans by midyear and 200 million by the end of 2013.
"T-Mobile is deploying the latest LTE technology, paving the way to LTE Advanced," the company said. "T-Mobile’s 4G LTE deployment will complement its existing nationwide 4G network — which third-party tests show rivals or beats existing LTE networks — creating what T-Mobile expects to be the fastest 4G combination in the United States. T-Mobile 4G LTE devices will automatically and seamlessly transition to T-Mobile’s nationwide 4G where LTE has not yet launched."
T-Mobile also introduced HD Voice which delivers nationwide crystal-clear high-definition calling and significantly reduced background noise. T-Mobile is the only U.S. carrier offering nationwide HD Voice for iPhone5, the company said.