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back to article T-Mobile US: Go ahead, PAY NOTHING up front for any device

Fourth-ranked US wireless carrier T-Mobile has hit back at its competitors' phone-upgrade plans with a new summer promotion that does away with down payments on all new devices. In March, T-Mobile announced that it was eliminating traditional device subsidies in favor of a model in which customers either pay the full price of a …

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Bronze badge

this is aimed at getting people to churn away from the handset manufacturers the carriers don't like

Also known as "but a Nokia", "No, not an iPhone, please, please buy a Nokia".

The carriers are desperate to fight against the power of iTunes and Google Play, and want some of the OTT revenue to themselves.

Luckily for them Nokia is making pretty decent phones, perhaps the best around.

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Anonymous Coward

Re: this is aimed at getting people...

The carriers absolutely hate Skype.

Skype is owned by MS

MS makes Winphones

Nokia uses almost exclusively MS' OS

"No, not an iPhone, please, please buy a Nokia" doesn't make sense

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Re: this is aimed at getting people to churn away from handset manufacturers the carriers don't like

Huh? How on earth do you figure that?

T-mobile offers handsets from every major maker and all of the popular/wanted ones - except the new Nokia 41mp camera phone.... I might actually move my account to T-mobile as they are significantly cheaper than my current carrier and they have a fantastic selection of phones....

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Anonymous Coward

Re: this is aimed at getting people...

Skype is on other handsets too. And there are other similar products like whatever it is Apple use.

Therefore I doubt that Nokia having a tenuous link with Skype will even hit the RADAR....

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Anonymous Coward

So...?

The US is finally adopting the European model (free phone subsidised by a monthly contract)?

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Re: So...?

Not really, that model has been around in the US for at least 20 years. It just never applied to very high end phones and there was no split between your service & hardware payments. What T-mobile has done is split the coupling between HW & service, then done away with the upfront HW payment.

Month to month contracts have been available for years but are more expensive and there is zero device subsidy (like in Europe, BTW). The last time I was in Europe (and was shopping for a phone), you had to pay an upfront fee for the most expensive phones, even if they were subsidized by a monthly contract.... Plus devices were only subsidized on 12 to 24 month contracts, month to month contracts required you buy the device outright.... Never mind that if you wanted an Apple product, the upfront fees were far higher than typical US carrier fees.

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Thumb Up

Re: So...?

In the UK, and for at least the last 5 years, I pay a monthly fee which covers the cost of my contract and my phone. There's no up-front payment.

My wife looked at the figures recently, and yep, you do up end up paying more overall over a two year contract.

But, what can I say? I'm addicted to new phones :(

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Silver badge

Stupid clueless US customers

In the US, even after you pay off your device subsidy, you still pay an ass-rape rate. It doesn't drop, you just get the opportunity to say "yes master may I have another" and get another "free" phone.

People here don't understand it's not a free phone, and they really honestly think the latest iPhone only costs Apple $30 to make. Seriously.

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Silver badge

Re: Stupid clueless US customers

But if your phone is 400 sim free then if the plan over 2 years is worth 200 to you then it works out.

Quite a few deals can be had in tue uk (away from the telcos) by independents. Factor in quidco and it can be lucrative, even more sobif you dont want a bleeding edge phone.

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Silver badge

Re: Stupid clueless US customers

Gene, T-Mobile's plans are different: Service and handset are separated. The $20/month is the repayment for the phone. After 24 months, if you don't want to get a new phone, your bill goes down by $20 every month.

Other operators are nasty, however, in that they don't let you drop back to a SIM-only plan at end of contract. Instead they push another "free" phone on you and keep the high monthly charge in place.

T-Mobile's scheme is pretty much the way Finnish customers have always bought their phones: service plan, plus a low-interest loan on the handset, and this clear separation is common in other Nordic markets. The UK leans towards the US model of "flat monthly fee", but at least the pricepoints are more flexible, rather than being multiples of $50.

But the real reason for the horrible pricing is simple: The US mobile market is highly uncompetitive. Taken as a whole, there are apparently four major operators, but when you get to a regional level it's a patchwork of effective monopolies: there are large areas where only one operator provides full coverage, especially for people who need to travel outside of major metropolitan areas. The CDMA/GSM split exacerbates this, as you can't even roam on a competitor network to fill in the gaps (a strategy that has been used for rural service provision in several European countries). This limits customer mobility between providers, thus allowing the operators to charge more.

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Bronze badge

Hmmm

Nice.

Sprint has yet to respond to T-Mobile, AT&T, and Verizon's annual upgrade plans. It will be interesting to see if they do. If not, they could end up bleeding more customers than they will bleed out, due to Sprint network performance.

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