By - BRIAN X. CHEN
Category - Vacations In Santa Clarita
Posted By - Hampton Inn Santa Clarita
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| Vacations In Santa Clarita |
But it may not be enough to persuade smartphone users to abandon the competition.
Analysts said the new marketing strategy, which spreads the cost of a
new phone over two years as a separate line item on the monthly bill,
will still feel like a commitment to many customers, even if they can
choose to pay it off early and walk away. And T-Mobile, which has a
slower network than its competitors, is only just beginning to introduce
major upgrades.
The company on Tuesday said the Apple iPhone 5 would be available
starting April 12 for $100 up front, with customers paying an additional
$20 a month for two years. Other new smartphones, like the Samsung
Galaxy S 4 and the BlackBerry Z10, will be available with similar
payment plans.
Although T-Mobile’s new phone plans require no long-term contract,
customers would have to pay off the balance owed in order to end service
prematurely.
For several years, T-Mobile, the No. 4 American mobile carrier by market
share, has been bleeding subscribers to Verizon Wireless, AT&T and
Sprint. In earnings calls, the company has said its main problems were
consumers’ negative perception of its network and its inability to offer
customers the iPhone.
Now that T-Mobile has landed a deal with Apple and turned on its new
fourth-generation network, LTE, in seven cities, the company is hoping
to mount a comeback. If T-Mobile does not find a way to bounce back, it
risks losing even more market share to Verizon and AT&T and becoming
a small niche player like Leap or U.S. Cellular.
The carrier, led by its eccentric new chief executive, John Legere, has
been undergoing a rebranding into what it calls an “uncarrier.”
At a news conference in New York on Tuesday, Mr. Legere, wearing a
blazer, T-shirt, jeans and sneakers with hot-pink shoelaces, casually
dropped curse words while mocking his competitors, saying they were
deliberately confusing customers with unclear two-year contracts and
punishing them with fees for surpassing data limits or ending contracts
early.
“Do you have any idea what you’re paying?” Mr. Legere said. “I’m going
to explain how stupid we all are because once it becomes flat and
transparent, there’s nowhere to hide. You pay so much for your phones,
it’s incredible.”
He said that T-Mobile’s contract-free plans would be more
straightforward and cheaper over all for consumers, and that by moving
to contract-free plans, the company was doing away with overage and
early-termination fees.
Mr. Legere said that over two years, an iPhone on T-Mobile would cost
$1,000 less than it would on AT&T. That would apply to heavy data
users. But when looking at the cheapest plans on both carriers, the
difference is much narrower. For example, an iPhone 5 on T-Mobile’s plan
with unlimited text messages, unlimited minutes and 500 megabytes of
data a month is only $360 cheaper over two years than an AT&T plan
with unlimited voice and text and one gigabyte of data a month.
At $580, buying an iPhone from T-Mobile would also be cheaper than buying a $650 unlocked phone directly from Apple.
On Tuesday, T-Mobile formally replaced all its old phone plans with new
plans that do not require signing a contract. For $50 a month, customers
can get unlimited minutes, text messages and 500 megabytes of data;
they can pay an extra $20 for unlimited data.
At AT&T and Verizon, the most popular phone plans cost closer to
$100 a month with a two-year contract for limited data. The iPhone 5
costs at least $200 on their networks with a two-year contract.
Despite T-Mobile’s promise to be more straightforward than other
carriers, some consumers might still find it confusing that they have to
pay an extra device fee after paying $100 up front for an iPhone.
In an interview, Mr. Legere said that the announcement of T-Mobile’s new
contract-free plans was just the beginning of a conversation about
greater transparency. He said T-Mobile would make every part of its
plans visible to customers and break down their options for how they
want to pay.
“The dialogue has just started,” he said. “This is an ages-old industry
that’s very opaque that people just gave up understanding.”
Even though T-Mobile’s $50 plan costs less than its biggest competitors’
offerings, cheaper no-contract plans are already offered by smaller
carriers, said Tero Kuittinen, an analyst at Alekstra, a mobile
diagnostics firm.
Virgin Mobile, for example, sells an iPhone for $650 and offers a plan
including 300 minutes, unlimited data and unlimited text messages for
$30 a month.
Consumers still feel that T-Mobile’s network coverage is poor, Mr.
Kuittinen added. And T-Mobile’s rivals are far ahead in deploying
fourth-generation networks using LTE technology; Verizon is leading the
race with LTE deployed in roughly 500 cities, while T-Mobile only
recently started its LTE service in seven markets.
“They can’t relaunch the operations from a clean slate because people
have negative conceptions of what T-Mobile’s quality is,” Mr. Kuittinen
said.
The main difference between a traditional two-year contract and
T-Mobile’s two-year device payment is what happens after that period of
time. For T-Mobile customers who pay off their iPhone, their monthly
bill would drop by $20. At other carriers, the monthly bill stays the
same even after the two years of the contract are up.
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