T-Mobile today (March 26) announced it will sell the iPhone 5 beginning on April 12 for a down payment of $99 and $20 a month for 24 months. That's $70 less than buying an unlocked iPhone straight from Apple.
What's more, you won't have to sign a contract for service.
"If you decide to leave after one payment or 10 payments, you can leave with no obligations to us, except for the price of the phone," John Legere said at T-Mobile's theatrical event held in a Manhattan gallery space.
Here's the catch: If you buy the phone from T-Mobile on its attractive $99-plus payment plan , the phone will be locked. That means if you leave T-Mobile, you have a useless phone until you pay it off.
The biggest question facing people considering T-Mobile's iPhone 5 service is exactly that — the service. During the event, several Twitter users expressed their displeasure over T-Mobile's service.
"@TMobile Does this mean I'll be able to make just one phone call per day without dropping? Please??!,"Beth Dombrowa @BethDombrowa3m tweeted.
But those service issues could change. T-Mobile also announced the launch of its new LTE 4G service in seven cities: Baltimore; Houston; Kansas City; Las Vegas; Phoenix; San Jose, Calif.; and Washington, D.C. The company said it is moving very rapidly toward the latest LTE standard in 90 percent of the top 25 markets, set to cover 200 million people by the end of the year. The company's older HSPA+ network, which T-Mobile says is as fast as the 4G service offered by other carriers, will fill the gaps.
Bonus for T-Mobile customers
For now, those who live in areas covered by T-Mobile's new LTE network will get an added bonus. T-Mobile's new $70 "Uncarrier" service plan, that offers unlimited data , along with unlimited voice and texts for $70 a month, may really be unlimited.
Most carriers offer tiered data, and some that offer so-called unlimited data throttle data transfer speeds to an unworkable rate when customers exceed a data allotment. (That's one reason why it's important to read the fine print and terms of service. In fact, T-Mobile's terms of service state that if a customer exceeds 5GB in a billing cycle, the company may reduce data speed to 2G levels for the remainder of that cycle.)
But T-Mobile appears willing to stretch its terms with the new iPhone 5. "There are people who use 50GB of data on [an] unlimited plan and won't get throttled," Mike Sievert, T-Mobile's marketing chief, said.
T-Mobile can do this because its LTE system is new and therefore empty. "T-Mobile has 50 percent more bandwidth than AT&T," he said. "It's like an HOV lane."
And it may be some time before T-Mobile's lanes get clogged and the company is forced to throttle data-heavy iPhone users , or like AT&T, charge overage fees.
If you're not crazy about T-Mobile, you've got options. After all, T-Mobile has waited six years to get an iPhone and even prepaid carriers such as Cricket got theirs months ago.
Here's a quick rundown of alternatives:
- At AT&T and Verizon, you'll pay twice the amount for your service plan as T-Mobile charges and be locked into a 2-year contract after paying $199 for the phone.
- Sprint has a traditional iPhone 5 contract, which resembles those of AT&T and Verizon. However, Sprint offers unlimited data, voice and texts for $80 a month. (Remember to consider early termination fees if you want to get out of a contract; again, check the terms of service.)
- At Cricket, you'll pay $500 for a 16GB iPhone 5 and $55 a month for service, including unlimited voice and text, as well as 2.5GB of data before Cricket begins throttling. The company has LTE service in 10 cities, 6 of which are in Texas.
- Walmart offers the cheapest all-unlimited plan for an iPhone 5, at $45 a month. Those who qualify can buy an iPhone 5 on a Walmart card and pay $25 a month for 26 months with no interest. (Final price is $649.)
T-Mobile will also offer trade-ins on your existing phone, which can be applied as a credit toward the purchase of an iPhone 5. No details are yet available about T-Mobile's trade-in credits, but Sievert said the credit will be based on the fair market value of the device.
Before you make a decision on whether to go with T-Mobile (or any carrier), ask people in your area who use the service about their experiences. And keep in mind that T-Mobile service could dramatically improve over the coming months as it rolls out LTE and integrates the MetroPCS network, a regional carrier it purchased earlier this year. Or, it might not.