T-Mobile was the bearer of great news today to those who despise carrier contracts, announcing at its Un-carrier Event in New York that it would be ditching the familiar model of offering phone subsidies in exchange for annual contracts.
Instead of the traditional format, T-Mobile will be introducing its Simple Choice Plan, which features different contract-free tiers of voice and data options for users. The pricing starts at $50 per month for unlimited talk and text with 500 MB worth of data on its HSPA+ (read: not yet LTE) network. Any overages will result in your speeds being throttled to 2G, so heavy data users may want to consider the next tier of 2 GB of data per month (in addition to unlimited voice and text) for $60. Finally, there’s the top level, a completely unlimited plan for $70.
There will also be family plans offered under this contract-free model, with two unlimited lines and two separate 500 MB pools of data for $80 per month. Adding more data for both users tacks on an additional $20 per month per tier. Other family plans include three, four, and five line options for $90, $100, and $110 per month, respectively, with their data tier increases costing $30, $40, and $50 per upgrade tier.
It is worth noting that it appears that this is now the only option for T-Mobile users, as its website is currently only showing the Simple Choice Plan for phones. Those who still wish to opt for annual contracts in exchange for phone subsidies will have to look elsewhere.
As a result of T-Mobile breaking away from annual contracts, customers will no longer enjoy the benefits of subsidized phones, meaning that they will have to pay full price for their devices. To do this, customers will be given two options: they can pay outright for their smartphone (e.g. $549.99 right off the bat for a 16 GB Samsung Galaxy S III) or they can pay a smaller upfront fee plus interest-free installments over a set amount of time. While this may seem similar to a contract based off of a subsidy, the key difference is that once users pay off the full price of their phone — which will ultimately come out the same as if they had paid for it outright — their monthly bill will drop accordingly.
One other possibility is for users to bring their own phone to the table. So long as it supports T-Mobile network, using unlock phones with T-Mobile’s new contract-free set up is also an option. For more information on T-Mobile’s announcements from its Un-carrier Event, check out our articles about the launch of its LTE network and the carrier’s plans to offer the Apple iPhone 5.