T-Mobile USA is shaking up wireless pricing, offering the iPhone 5 off-contract starting April 12. The nation’s fourth largest carrier is the last of the big four to get the iPhone, but it’s getting it in a big way. Consumers will be able to get the latest iPhone for $99, and then will pay $20 per month for 24 months. After that they’ll own the phone.
Users will have to pay for service on top of that, but T-Mobile has cut those prices as well. T-Mobile’s new “Simple Choice” pricing was unveiled yesterday
“If you come to T-Mobile you have signed your last contract. They are gone. No more,” said T-Mobile USA CEO John Legere at a press conference today. .
“We’re canceling our membership in the carrier club,” Legere told his audience today, adding that “this is just the start.” He said that through contract pricing, consumers are paying much more than the value of a smartphone during the life of the phone, but that they will no longer have to do that. Legere said that an iPhone 5 purchased through T-Mobile USA would cost a customer $1,000 less over two years than it would through AT&T.
The price war extends to other smartphones too. “T-Mobile is significantly undercutting its rivals on price,” said Informa Telecoms & Media in a research note. “With the new plans, customers buying a Samsung Galaxy SIII smartphone and unlimited voice, text and data plan from T-Mobile would save $1,330 over two years compared with the closest package from Verizon Wireless and $510 over two years compared with Sprint.” Those calculations are for two years using the 16GB Galaxy S III.
The iPhone 5 will run on T-Mobile’s just-announced LTE network, which the carrier says is live in Houston, San Jose, Baltimore, Washington, D.C., Las Vegas, Phoenix and Kansas City. The carrier turned on LTE today in New York during its press conference, but said LTE will not be live in New York before next summer.
In other markets, the iPhone 5 will run on T-Mobile’s HSPA+ network, which has the nation’s fastest non-LTE download speeds, according to Root Metrics. T-Mobile will also offer the iPhone 4 and iPhone 4S and they will operate in the company’s 1900 MHz spectrum band.
Follow me on Twitter.
