T-Mobile Decides to Say The Hell With Contracts

By April 3, 2013

Last week, America’s number four wireless carrier, T-Mobile, decided to go the way of many other countries, and do away with wireless phone contracts. In the wake of their failed merger attempt with AT&T, T-Mobile has lots of catching up to do. With their recent FCC approved purchase of Metro PCS, lots of cash to spend, an aggressive LTE roll out plan, April 12th iPhone launch, T-Mobile is taking a no holds barred approach to the future.

For those of us that spend a great deal of time keeping up with what’s happening in the wireless industry, T-Mobile’s aggressive, underdog mentality is a breath of fresh air in a industry monopolized by AT&T and Verizon. Not only is T-Mobile doing away with wireless contracts but they are going to allow their customer to finance phones interest free over a two year period. If you decided to leave T-Mo before the end of the two years, your two options would be to pay the phone off early, or keep making phone only payments with your new provider. The bottom line is your not locked into a service agreement. T-Mo CEO John Legere says you’ll save $1000 over two years if you make the switch from AT&T. Other sources I’ve seen say the savings are more realistically between $300 to $600. Either way, we’re not talking peanuts.

In a ever shrinking competitive market dominated by two players, consumers need alternatives. I appreciate T-Mo’s tenacity and willingness to single out AT&T. Why? Because they deserve it! Their arrogance precedes them. When Mr. Legere mentioned AT&T last week while discussing T-Mo’s “UNcarrier” initiative, AT&T’s response was, a mere “whatever”. That’s all they could come up with.

As a mobile tech guy, I currently have accounts with Verizon, AT&T and T-Mobile, so there’s no bias here. I’ve never been a prepaid fan because it’s always been important for me to have reliable international services when I travel. It’s no secret T-Mo’s service is lacking in smaller towns and rural areas, but in many cases their wi-fi calling option has been able to make up for that. In 2013 they plan on covering 200 million people with advanced LTE services, and that will be no simple achievement. With their new no contract calling plans you can have unlimited everything for $70 per month. That certainly made me do a double take! There’s also mention of a possible Anytime Upgrade Club which would allow customers to upgrade their phones twice a year for a small fee, plus a possible monthly membership fee. Count me in!

I don’t know about you, but it’s important for me to have a wireless provider that values my business. AT&T doesn’t understand the first thing about building brand loyalty. Verizon is all about consistency and customer retention, while T-Mobile is working overtime to earn your business. There are very few things that take precedence over service and coverage, but T-Mobile’s straight forward, no bull approach has certainly got my attention, and they’re banking that it gets yours too.

On twitter I’m @ThomasLeath and facebook.com/TomLeath.

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Thomas Leath

Thomas Leath

For more than 20 years he's been involved in multiple startups as both an advisor and investor, in industries ranging from small business startups to large scale technology. He's owned a successful homebuilding company, cigar shop, bought and sold destination real estate in the Caribbean, and has been a motion picture producer. He's a self proclaimed Gadget Geek, occasional Blogger, Fly Fisherman, Scuba Diver, and Art Collector. He's @ThomasLeath on Twitter.