Mar 27 AT 9:47 AM Taylor Wimberly 54 Comments

So long wireless contracts, hello freedom and savings


“This is the biggest crock of shit I’ve ever heard in my entire life,” said T-Mobile’s new CEO John Legere when talking about traditional wireless contracts and subsidized smartphones. “Do you have any idea how much you are paying? Everybody hates the high cost and crazy complexity of rate plans, and I hope I’ve been clear to you that this is on purpose. Rate plans are painful, so we have radically simplified them.”

A ton has already been said about T-Mobile’s new Simple Choice plans, some of it confusing and misleading, but there is only one thing that you need to understand about yesterday’s announcements — T-Mobile is separating the mobile device cost from the service plan.

This is a big effin deal because most carriers punish you for bringing your own device. For example, AT&T will allow customers to use an unlocked phone such as the Nexus 4 on their network, but they are still forced to pay the inflated rate plans that are meant to subsidize the high cost of devices.

“Customers don’t need another AT&T. Customers need carriers to stop acting like AT&T. If you come to T-Mobile you have signed your last contract. You’re done. They’re dead,” said Legere at T-Mobile’s event.

Some news outlets are arguing that mobile devices are still very expensive, so you won’t save much money in the long run with a no-contract plan. And they might be right if you are looking at the unlocked iPhone 5 at $659, but smartphone prices are falling at a rapid pace.

Google already sells the LG Nexus 4 for $299 without a contract. This summer we could see Motorola sell an unlocked phone for $199, and NVIDIA could help push the starting price of an unlocked “superphone” all the way down to $99 by the end of the year.

We haven’t seen any unlocked phones that will operate on multiple LTE networks in the US, but that is about to change. Apple’s latest iPhone 5 revision (model A1428) will support LTE on both AT&T and T-Mobile. Future unlocked Android devices (like the rumored Nexus 5 and X Phone) should also support LTE across multiple US networks.

T-Mobile’s new Simple Choice plans might not seem that revolutionary today, but wait till Google and their partners releases the next great unlocked Android phone with 4G LTE.

In addition to lower prices for devices and services, customers will have the freedom to switch networks at will. This should help speed up innovation as carriers are forced to start competing for our business. “If we suck this month, drop us,” said Legere. “But if we’re good, stay with us.”

A few years from now, we will look back at March 26th, 2013, as the day that T-Mobile killed wireless contracts. The old model of two-year contracts and high device subsidies is dead, and the market giants like AT&T and Verizon will be forced into changing or risk losing customers.

And anything that keeps the big guys on their toes is a good thing. Am I right?

Taylor is the founder of Android and Me. He resides in Dallas and carries the Samsung Galaxy S 4 and HTC One as his daily devices. Ask him a question on Twitter or Google+ and he is likely to respond. | Ethics statement

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  • kazahani

    I like this. It’s good that someone is trying this. As soon as T-Mobile has LTE in my area this will be the plan I go with, but I have a feeling that I won’t get that coverage for a couple of years. =<

    • Berkshire Hathaway

      No its terrible. History told us, companies starting to compete solely on price or price wars are always on the way out of business. Its called the act of price desperation, the car industry is a fantastic example for this. There wont be a T-Mobile in 2015 or 2016 any more.

      • LukeT32

        Isn’t this how cell phone networks are handled in the rest of the world?

        • w00x

          This is how mobile operators have been operating in Bulgaria for 11 years now. It’s happening in other countries as well.

          You can bring your own device and pay to whoever you wish, but the top-tier devices come at a cost. I paid $650 cash for my unlocked HTC One X 32GB last June. Please compare this to the $99/$199 people pay in the US.

          • Jimmy_Jo

            What you’re saying about top-tier phone costs is irrelevant for 2 reasons. 1. The cost of devices is dropping. 2. EVEN IF THEY DIDN’T it’s still more cost effective to buy the phone outright and then use a non-contract phone plan.

            For example, pre-paid @ $50/month (which is about average) is $1,200 for 2 years of service. Let’s say the device was $600, that’s $1,800.00.

            Sprint @ $80/month is $1,920 for 2 years plus $200 for the phone that’s $2,120.00.

            You save $300+ and you can get a new phone whenever you want.

        • krazytrixxxsta

          Yes, that how it is in the majority of the world.

      • Max.Steel


      • Tmobiler

        you should add:
        “BTW I am an ATT store manager”

    • honourbound68

      Man do I need to do some research… I’m hoping that their new phones will have LTE and HSPA+ bec if so, it’s a win and I’m switching as soon as the next GN comes out.

      • kazahani

        They will have both. It will be a while before we are ready for an LTE device without a CDMA/HSPA modem.

    • Bernie

      Don’t underestimate HSPA speeds, I did a side by side test of my Nexus 4 on t-mobile using HSPA with my friends iphone 4s on AT&T 4G and he got 12 Mb/s, while I got 16 MB/s.

  • blueriverclay

    Should be interesting if Google|Motorola bring a low cost high end device to market that is purchased outside of the carriers…Like the rumors of the X-Phone.

    • muii

      It seems this CEO has a look at what happened in France past year : A new operator came in and get rid of all complex contracts, you have one possibility when you suscribe, with no extra fee, and all is included, free calls (even international), and free data that explode all what existed then. And no extra cost for a cell phone, the cons is that you have to buy one, but you have no ‘engagement’ for 1 or 2 years, you can unsuscribe whenever you want.
      Now you spend 20€/month for getting what you had for at the very least 50€ (it was more likely around 100€ for all these services). Since then mobile costs has been at least reduce by 2 here with the others operators forced to aligned a little bit.

  • MyMilan

    THANK YOU T-Mobile for taking this bold step!

    Everyone, whether you use t-mo or not, will benefit from this. Great article. It’s great that T-Mobile stepped up to the plate and did the right thing for consumers. AT&T and Verizon could care less about consumers. People are nothing but dollar signs to them. Now AT&T and Verizon will be forced to do the ‘right thing’ or lose customers to T-Mobile. Now if the HTC One would only be released in the U.S. everything would be sweet.

    • Gabe

      You mean they “could not care less”. Because if they could care less that means they still care about the customers. But if they could not care less, then they never cared in the first place.. Just sayin..

  • blueriverclay

    Should be interesting if Google|Motorola bring a low cost high end device to market that is purchased outside of the carriers…Like the rumors of the X-Phone.

  • DroidSamurai

    I like that, except that I don’t think it will play out so nicely. See, people don’t just switch carrier because of phone choices, and costs. If this is the case, Verizon would lose big when the iPhone was in its peak and Android was nowhere near its popularity as it is now. Sprint also always charges less for its unlimited data, but it never manages to break into the top 2. Unless the coverage of T-mo improve, it may not change the landscape of the mobile industry too much.

    • Taylor Wimberly

      T-Mobile is merging with MetroPCS and their coverage area will greatly improve after the deal is approved by shareholders.

      • Kizipotamus

        I recall reading that’s not going to happen until like 2015 though.

        • swazedahustla

          Yea, they want you to get in on the ground floor of this new scheme…..and then by 2015 they will have you right where they want you, lol.

        • Taylor Wimberly

          T-Mobile is currently spending 4 billion to upgrade their network. They will cover 100 million people with LTE by mid-year, and 200 million by end of year. Once they gain the spectrum from MetroPCS, this will allow them to enhance their coverage and offer faster download speeds.

          • Larry

            Doesn’t VZW spend ~$4 Billion annually on their network? Price is low on T-mob but you get what you pay for. Couldn’t get data in half the buildings I went into.

  • auronblue

    I applaud t-mobile for this step and I hope they can build out their LTE network quickly. Until that happens and I can get reliable coverage in my area, I will stay with Verizon.

  • Jorge Vieira

    Yeah it is great but I don’t think we will see change in ATT or Verizon anytime soon. Sprint might follow T-Mobile. These phone at low prices will never really hit the main stream audience look at the nexus, damn near tough to get (at launch) and the average Joe scmho never even heard of it or knows it. With years of paying UPGARDE PRICES people think thats how much they cost most consumers have no idea they are getting a subsidized price. They are so 199 on Verizon or 600 with T-Mobile new plans?!?! Americans won’t like it very much I wish it where different. Even when I try to explains the reasoning most don’t care or are like “WOW only 300 of contract?” They don’t know any better.

    • Taylor Wimberly

      By your logic, if customers are used to paying the $199 “upgrade prices” for a new phone, then they will have no problem buying an unlocked device at the same $199 price point.

      • Jorge Vieira

        O yes absolutely, if there is marketing behind the products and they are sold in carriers stores!

        I just don’t think these unlocked phones with great prices get enough attention by the average consumer. But we are still early in the “cheap unlocked device era” it so hopefully it can happen sooner rather than later. I really hope the x phone is real!

        And best buy still have the nexus 4 up for 600 “unactivated”!? The big business can’t help themselves this is what I can see happening to every single affordable unlocked phone. and not everyone likes ordering from a website. Consumers want interaction. Not everyone has a techie to help them know better.

    • bob

      Joe Schmoe didn’t know about the Nexus 4 because why would Google push it if inventory was so hard to come by? The Galaxy Nexus was being pushed not only by Google, but also by the carriers. Whenever I checked on new phones on Sprint, the Galaxy Nexus always had a prominent spot near the top next to SGS3 and HTC Evo.

      I’d venture to say that the next Nexus from Google will receive a greater push. The Nexus 4 was an experiment with an unlocked phone at a low price, and I’d say it worked tremendously.

      • Jorge Vieira

        It did, and yes I hope your right, but I’m going by what has happened!

        We really don’t know why they had a hard time keeping stock.

        Yes it was an experiment that could of been even better. I love my nexus 4. I admire Google for pushing tech to where it SHOULD be. But business are all about making money 100 dollars per unit profit or 450?

        That’s why I hope we can change but I think the big carriers already have such a huge grasp they won’t let go easy.

  • bob

    I wonder if T-Mobile saw the writing on the wall when they heard of the Nexus 4. If you’re gonna get unsubsidized phones selling for <$300, and really good unsubsidized phones at that, then why do you need to sign a contract to get a phone at a subsidized price? T-Mobile can lure customers away from AT&T with the promise of no contracts and great phones, including the Nexus 4, iPhone, and SGS4.

    I just hope T-Mobile has a hit on their hands and manages to hurt the big carriers enough to force them to change.

  • Jakob

    Congratulations and welcome to how it’s done in the GSM-world.

  • GE918

    Long live T-Mobile.

    Does anyone know how this will affect customer service?

    • swazedahustla

      Yea, it will still suck along with the data coverage.

  • tarman

    Hello to less coverage. Still wish VZW did this

  • Frank Pilone

    T-Mobile is finally doing something good. I been a customer of them for more than a half of a decade. I had them when they had their @Home phone service, and UMA capable phones. Then I seen them go down hill such as forcing Value Plan customers to pay full price for a phone and sign a 2 year contract (not much of a value). I think the big issue is the price of the phones, and confusion with its payment. If one qualifies, they can put a down payment (subsidize price one could say), and make 24 payments of $5 – $20. Leave before you paid off the phone, you pay the remainder in the last bill.

    T-Mobile is competing with the prepaid carrier space on this pricing. About the only carrier that is cheaper than T-Mobile for what you get is Republic Wireless. The other major US carriers should be concerned, especially with pricing. However, simply put, there are not enough quality unlocked GSM phones in the US. The Nexus 4 is one of them, but I am sure most can’t name off one other in the next minute. Blu Products sells unlocked, but they are meant for the budget minded, and they don’t support T-Mobile’s 3G bands. That means not enough global 3G phones neither.

    And speaking of Global phones, while LTE is wonderful for the speeds, and the idea is promising, with more than 40 different bands (up to 8 in the US), there is no way there could be a global LTE phone. This could be another problem as unlocked LTE phones may or may not work on T-Mobile’s future LTE bands.

    I can see the national carriers trying to use the payment option on the phone as means of manipulating the truth such as an extra fee on top of the phone bill. T-Mobile will need to fight back on that noting that the price (even in worst case scenario) how they are still cheaper. They also need to address the bad reputation of poor coverage. If they were smart, they would have included the taxes in the price to make it even more attractive.

    I hope that T-Mobile shakes up the US carrier like they did with the inclusion of the smart phone (first to have Blackberry and Android), as well as unlimited voice. They also will have challenges such as education marketing, and dealing with the future unlocked LTE phones.

  • aholland1

    Haha, Legere is pretty cool; wish more CEOs were this outspoken (not crazy Balmer levels necessarily, but a no BS approach like this is good). It’s making more sense to me now why Google likes rolling with them as a primary carrier for previous Nexus devices; seems like they share a lot of common culture values.

  • Max.Steel

    Now, T-Mobile has to market this new change like crazy. It should be the fore front of ALL their commercials now until at least the end of the years. Most non techies don’t know about this yet and won’t know the value in this change unless T-Mobile markets it in all kinds of magazines, almost every TV station, radio etc.

    • Poop Francis I.

      T-Mobile means unlimited noncoverage everywhere. Its the worst carrier, they should merge with HTC which is equally dysmal.

  • rob

    I’ve been a T-Mobile customer for a while now, and I hope this philosophy sticks. When I first became a customer, they offered a similar plan (albeit without the iPhone), and then for a while recently they were pushing more people to contracts. It was always pretty confusing. I’m very glad to see a much clearer, simpler message from them.

  • decker

    It’s a great move, but a very difficult one. People don’t care how much a phone cost just as long as it feels cheap when they sign up. This takes the curtain off and exposes them to actual cost which adds additional decision making. If you want to succeed don’t make the customer think. I hope T-mobile is ready to re-educate customers. Many have no idea their phone is subsidized. How many people think phones cost less than $100? I know plenty of them. There is no free lunch.


    I live in Phoenix, so naturally, I’m really excited for LTE. I’m a Tmo customer and have an upgrade coming up (I still haven’t decided if I’ll be going with the One or the S4) and was wondering how that would work with the new business strategy. I’m grandfathered in and don’t want my contract to have to change. My question is, will I have to pay full price up front for the phone to keep my plan, or, since I am a long time customer, will the upgrade process be the same as before?

  • drejohnson

    Can’t wait till their LTE is available in Atlanta! I know Google is loving what T-Mobile is doing for wireless. $300 – $350 for a unlocked Nexus 5/X-Phone + $70 for T-Mobile’s unlimited contract free LTE with HSPA+ 42 fall back will be a awesome win for consumers.

  • chri2kari

    After filtering out the cursing & filtering out the marketing drivel, the message is : 1) T-mobile does not subsidise handsets. 2)do You still have to sign an agreement to pay a minthly fee for 24 months.


    • Taylor Wimberly

      Wrong. You don’t have to sign up for any installment plan if you don’t want to. You can still bring your own device, or just buy the device when you get service.

      • ihatefanboys

        Thanks for that. I think people are dense, and they want to believe what they want to believe. Plus the whole switch phones when you want is great too. I wonder how T-mobile will handle that. Do you think you can just trade in your current phone whenever you like ? Have they given any details about that part of the new plans ?

  • Derek

    I really like what T-mobile is doing. I hope it forces some changes in the mobile arena. But until their coverage improves, I’ll never go with them. Their coverage sucks.

    All the cities that I frequent, they have coverage in the city but as soon as you leave and go to the suburbs where people actually live, you drop back to edge speeds. Also, you almost never get data inside buildings.

    You get what you pay for with magenta.

  • VZW Americas no1 network

    John Legere should be fired. Verizon MAULS tmo

  • donger

    Definitely liking this new T-Mobile.

  • rpras

    “T-Mobile’s new Simple Choice plans might not seem that revolutionary today, but wait till Google and their partners releases the next great unlocked Android phone with 4G LTE.”

    That is what I am waiting for. If the next Nexus supports multiple LTE bands and costs only slightly more than the Nexus 4, I am switching from Sprint. Service choices would then be T-Mobile or one of the MVNOs. Freedom! And yes, I am not “mainstream.”

  • alexander

    who cares what t-mo does, if you travel or live anywhere but a major city, what is the point in paying anything to t-mo or sprint, who cares if it less than vzw, if you can’t use the service in most places, for calling let alone data, vzw is more expensive yup, but in the cell phone world you get what you pay for, and yeah a $50 unlimited plan sounds great, but when paired with little coverage, and when you do get data coverage it is 3g data, what is the point? and how is basically just paying the normal full retail cost for a phone spread out over 2 years innovative.. you can put it on a low interest credit card and do the same now..

  • Chuxter

    Am I the only one that doesn’t see this change as “savings.” If you plan on staying with a carrier for 2+ years anyway, WHY NOT take advantage of receiving a phone at a lower cost every 22 months?

    I’ve done the math, and I would actually be paying MORE on a prepaid plan than I do on my monthly subscription. Add to that, having to pay $580 for the phone instead of 200-300, and that’s not a change that is in my interest.

  • Emily 90

    Im with at&t and iPhone 5. I could not be happier. Its a fantastic couple.

  • HeadDoc

    FINALLY! This will inevitably be a huge win for the consumer. Not only could I save hundreds of dollars right now, but phone prices will probably come down, manufacturers might start making phones in between the mid-range and high end that cost around $300-400 unsubsidized, which will save us even more. T-Mobile rocks. I might still wait for new phones or LTE in my area to make the switch, but I am definitely curious about what they will charge for the HTC One.

  • aryin

    T-mobile, i’m with you !

  • HBCASurfer

    Big deal! This news is nothing in comparison to my carrier!
    My carrier has had no contract, credit check, or deposit for 4 years! AND you can earn it free! Along with BYOD….you win in EVERY way!!!
    Go to
    rtkepper at yahoo dot com