T-Mobile Plans On Killing Long Term Contracts, Subsidies

Cheap smartphones may quickly become a thing of the past if T-Mobile has anything to say about it. According to the company’s CEO, John Legere, T-Mobile will begin phasing out subsidized handsets and long term contracts to its customers starting next year. The move will surely ruffle some feathers once people start realizing the full cost of a smartphone these days.

It sounds like T-Mobile believes that the move will actually result in greater customer freedom, including the ability to move from one phone to another without being held to insanely long contracts. T-Mobile would also see more freedom from the move because of lower upfront costs for the carrier.

It’s also curious that this announcement came just days after T-Mobile announced a deal with Apple to carry its “wireless products” on its network. Given the relative disdain for most carriers these days from customers, it’s interesting that a company is challenging the status quo with such a huge change-up right out of the block.

T-Mobile customers seem to already be avoiding plans that subsidize phones. Around 80 percent of the carrier’s current new phone activations decided to forgo subsidized plans according to Reuters.

I know a few people who seem to prefer going contract free for phones, opting to purchase them directly from manufactures unlocked. It’s not cheap, but it adds a certain level of flexibility and takes the power out of the hands of carriers. I’ve purchased both the iPhone 4S and iPhone 5 off of contract over the last two years, and I have no plan to go back. Knowing that I can leave a carrier at any moment for a better plan on a different network is worth paying the extra cash up front for my phone.

What about you? Would you buy into this model? Hit us up on Twitter and let us know!

Joshua is the Content Marketing Manager at BuySellAds. He’s also the founder of Macgasm.net. And since all that doesn’t quite give him enough content to wrangle, he’s also a technology journalist in his spare time, with bylines at PCWorld, Macworld… Full Bio