Feature Article

April 01, 2013

T-Mobile Tosses Out Contracts

Help! I've signed a crummy contract with T-Mobile and I can't get out!

Fear not, mobile subscriber – T-Mobile is officially doing away with its contracts for wireless carriers, and it's the first carrier to do so. 

The company has been in the process of phasing out its daunting two-year or two-hundred-dollars-and-then-some agreements. In lieu of the standard contract the company used to require its customers to commit to, the company is opting for an installment plan. Consumers have the option of selecting an unlimited talk, text, and Web option that includes up to 500mb of data for a flat fee of $50 per month. For $10 more, a subscriber can boost its data allowance to 2GB. This flat amount does not of course, include the swarm of taxes and surcharges that all mobile services tack on come bill time.    

Instead of the typical subsidy, a user pays a nominal fee on top of its phone bill each month – this works to pay off the balance for the smartphone. Unlike the monthly fees one normally pays a carrier under a contract, these fees actually stop once the phone is fully paid off.  

The aggressive changes in T-Mobile's approach are not out of the blue. The company has been failing to keep up with competing brands, coming in at the number four provider of cell phones. One reason for T-Mobile's struggle behind carriers like Verizon and AT&T is that its network has not been able to support an iPhone offering until recently. Last January, the company announced it would be changing that too, and will be offering the iPhone this spring.

Edited by Brooke Neuman

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