According to Fierce Wireless, the wireless carrier market in the US breaks down something like this: AT&T and Verizon leading the pack, with over a hundred million subscribers each, and Sprint and T-Mobile in a distant third and fourth, respectively. Which is why it makes sense that T-Mobile, with its roughly 33 million subscribers, would want to do something drastic to catch up to the market leaders.
On Tuesday, T-Mobile – a subsidiary of Deutsche Telekom – announced it would entirely do away with contracts, and allow consumers to get their hands on devices such as the iPhone without locking themselves into a two-year voice and data agreement. Of course, no contracts also means unsubsidized phones, which can be very expensive.
For instance, an unsubsidized iPhone (a device previously unavailable on T-Mobile) will set you back $650, as opposed to the subsidized price of $199.
But T-Mobile says it will offer what essentially amounts to a mortgage on your new iPhone: If you don't want to plunk down the full $650, you can choose to fork over a downpayment of $100, plus a set amount a month on top of your data and voice fees, until the device is fully paid off. (CNET has noted that you won't incur interest charges on those payments, so "[w]hen you add up the deposit, plus any installments, it equals the price of the phone if you were to pay full price at the time of purchase.")
In a statement today, John Legere, president and CEO of T-Mobile USA, called the move "bold" – a direct attack on what he described as the "out-of-touch wireless club. This is an industry filled with ridiculously confusing contracts, limits on how much data you can use or when you can upgrade, and monthly bills that make little sense," he added. "As America’s Un-carrier, we are changing all of that and bringing common sense to wireless."
It's worth noting that it's not just the iPhone that's going contract-less – other devices, including the Samsung Galaxy S4 and HTC One smartphones, will be sold under the same plan.
The T-Mobile iPhone will be available on April 12.
For more tech news, follow us on Twitter @venturenaut.