T-Mobile’s New Plans Replace Phone Subsidy With “Equipment Installment Plan”

Posted by at 8:29 am on July 20, 2011

T-Mobile today announced new “Value” plans that replace the traditional phone subsidy – a payment for your phone hardware hidden in your monthly service pricing – with a more transparent phone “down payment” and agreement to “pay it off over 20 months with interest-free payments.”

The monthly phone payments are now referred to as “Equipment Installment Plan” and end after 20 months, unlike a traditional phone subsidy, which continues even after a phone is paid off. Customers are also able to bring their own phone and pay no down payment nor Equipment Installment Plan. Detailed service plan options were not announced, but the company provided an example where a two-line family plan would run about $100/month for unlimited voice and text, plus 2GB of high-speed data, throttled to lower speeds after 2GB. A phone such as the new HTC myTouch 4G Slide would require a $250 down payment plus 20 additional monthly payments of $15 each. Therefore the example two-line family plan would run about $130 including two phone payments. T

he new Value plans still require a two-year contract. The new plans will be available starting July 24. T-Mobile will continue to offer its current Even More plans, now called “Classic” plans. It will also continue offering no-contract plans under the Monthly4G brand, as well as Pay As You Go plans. The company first challenged the phone subsidy model when it introduced “Even More Plus” plans in late 2009, which offered a post-paid monthly service plans that were cheaper and contract-free when the customer paid full price for the phone up front.

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