“The Great Cellphone Subsidy Con is over,” said David Pogue in The New York Times, and we have T-Mobile to thank. “Under the unwritten conspiracy code of cellphone carriers,” you pay about $200 up front for a phone, and carriers Verizon, AT&T, and Sprint charge you the remaining $400 of that phone’s real cost over the course of a two-year contract. But “once you’ve finished paying off your handset, your monthly bill doesn’t go down.” You keep paying that subsidy “forever.” No more. Last week, T-Mobile eliminated its two-year contracts for new customers and new phones, including the iPhone 5. You can buy a new device“what the phone really costs,” either in one payment or over time at no interest. Once your phone is paid off, your bill will drop by $20 a month, saving you “a huge amount of money.” As the smallest of the U.S. providers, T-Mobile “can take risks because it has nothing to lose.” But now “the other carriers will have to start paying attention.”
“T-Mobile is trying to change the game here,” said Matthew Miller in ZDNet.com. Americans generally go for cheaper phones with a contract because they don’t want to pay full price up front. But those of us who bring our own phones to a network are “a bit ticked off” that we still have to pay like everybody else. “The carrier is not giving you a break because you bought your own phone, and is just pocketing this subsidy fee without providing anything additional to you.” T-Mobile is saying goodbye to all that, and “I’m fully onboard with their strategy.”
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