T-Mobile's New Plan May Discount the Price of Phones

T-Mobile may address high phone prices with its next Un-carrier move

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T-Mobile, the self-coined “Un-carrier,” has made a point of addressing wireless customers’ biggest pain points. Its Un-carrier Next launch saw subscribers refunded the taxes and fees they normally pay on top of plan prices. T-Mobile’s KickBack, which launched earlier this year, doled out payments to subscribers who used 2GB of data or less a month. And now, the carrier wants to shake up how people buy new phones.

According to leaked documents obtained by Android Authority, T-Mobile will launch a service that reduces the price of top-tier phones like the Galaxy S8 and iPhone 7, which often retail for more than $650. It won’t be a contract deal — the marketing materials say its “commitment free” — and it’ll come with a lifetime warranty and insurance included. If you’ve broken a phone, want a new one, or have had enough and want to return it, you’ll be able to do so.

Android Authority expects the plan to launch in the third quarter of this year.

The new benefit appears aimed at subscribers who’d rather pay for new smartphones outright instead of in monthly installments. In 2015, AT&T, Verizon, and Sprint eliminated subsidized phone pricing — the discounts on devices offered in exchange for two-year commitments. The shift has some investors worried. In January, Wells Fargo Securities lowered its rating on Verizon in part because of “installment plan migrations.”

It’s unclear whether the new plan will join — or replace — Jump, T-Mobile’s early upgrade plan. A $9 to $12 fee (depending on the phone) each month allows you to trade in and upgrade your phone after 50 percent of the total cost is paid off, and includes insurance, theft, and accidental damage.

In some cases, Jump ends up being more expensive than buying a phone outright. If you turn in an iPhone 6S and get a new iPhone 7, for example, you’ll pay $1,069 after two years — about $200 more than the iPhone 7’s $900 asking price.

The rumored benefit comes on the heels of T-Mobile’s new One plan, which includes unlimited talk, unlimited texting, and unlimited 4G LTE data for $70. “Four years ago, we were talking about a trend in the industry,” T-Mobile chief John Legere said at the Consumer Electronics Show in January. “More than 70 percent of wireless customers say wireless plans are too complicated. They want simplicity.”

And it comes as T-Mobile makes costly upgrades to its network. In April, T-Mobile acquired low-band spectrum, the frequencies over which cellular signals travel, for $8 billion.

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