T-Mobile's iPhone 5 By The Numbers - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Mobile // Mobile Devices
02:29 PM

T-Mobile's iPhone 5 By The Numbers

T-Mobile will at long last offer the Apple iPhone, but does the carrier's new math add up?

Apple iPhone 5S: The Hot Rumors
Apple iPhone 5S: The Hot Rumors
(click image for slideshow)
With much fanfare and hullaballoo, T-Mobile USA CEO John Legere announced that the company will finally offer Apple's smartphone. The iPhone 5 goes on sale from T-Mobile April 12, but customers can sign up starting April 5. T-Mobile is advertising the iPhone 5 for $99, but that's not necessarily what you'll pay.

The $99 is actually a down payment on the iPhone 5. Thereafter, T-Mobile's iPhone 5 customers will make monthly payments of $20 for 24 months until the device is paid off. Between the down payment and the monthly installments, the total amounts to $580 -- that's about $70 less than the iPhone 5's raw $649 selling price.

As soon as the iPhone 5 is paid off, you'll own the device, whether or not you stick with T-Mobile USA. Even better, once you own the device, T-Mobile USA will unlock it so it can be used on competing networks. (Yes, new phones will be locked to T-Mobile's network.)

The beauty of T-Mobile's new model is that there are no contracts. Customers can leave at any time. Legere even said, "If we suck for a month, leave! Go somewhere else!" Of course, he also said T-Mobile hopes that customers will love its new service enough that they will stay.

[ For more on T-Mobile's bold new plans, see T-Mobile Looks To Shake Up Industry. ]

Asked what happens if a customer leaves T-Mobile after having made only a few payments, T-Mobile didn't really have a good answer. Instead, Legere said the payoff amount will be based on what's left of the remaining payments and the fair market value for the iPhone 5 (if the customer wants to turn the device in). T-Mobile's wishy-washy answer is somewhat concerning.

There are no penalties, said T-Mobile, for accelerating payments or paying off the device in full instead of making the $20 monthly payments. T-Mobile claimed it is offering this financing option with no interest. In fact, its $580 total price actually saves consumers money compared to buying the phone outright from Apple.

Beyond the down payment and the monthly $20 fee, customers will of course need a service plan for their iPhone 5. The cheapest plan costs $50 per month and includes unlimited voice, unlimited messaging and 500MB of data. Want more data? Pay more.

That means an iPhone 5 and T-Mobile's cheapest plan amount to $70 per month together. Is that a good deal? It really depends on how you think about it.

For starters, T-Mobile's iPhone 5 is (thankfully) optimized for its network. That means you'll get LTE 4G support in the 1700MHz band, as well as HSPA+ 3G in the 1700 and 1900MHz bands. T-Mobile's iPhone will be the only one that offers HD Voice (higher-quality phone calls). Beyond these customizations, T-Mobile's iPhone 5 is the same as every other iPhone 5. The other carriers charge from $199 to $399 for the iPhone 5, depending on storage, at contract inception.

The key benefit for T-Mobile customers here is the lack of a contract. Unhappy T-Mo customers can walk away at any time. That's a powerful motivator for T-Mobile, which needs to earn its customers' business each and every day. Other carriers lock customers into two-year contracts, which prevents them from leaving. The no-contract option is certainly appealing. Whether or not T-Mobile's services can live up to the demands from iPhone 5 customers is another matter entirely.

Attend Interop Las Vegas May 6-10 and learn the emerging trends in information risk management and security. Use Priority Code MPIWK by March 22 to save an additional $200 off the early bird discount on All Access and Conference Passes. Join us in Las Vegas for access to 125+ workshops and conference classes, 300+ exhibiting companies, and the latest technology. Register today!

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Apprentice
4/8/2013 | 10:51:07 AM
re: T-Mobile's iPhone 5 By The Numbers
Awesome! I like how they allow you to finance the phone and the cost turns out running cheaper. Sounds like T-Mobile has some kinks to work put but non-the less a positive step forward for the mobile carrier. Offering customers all mobile devices that are current combined with the truly 4G network, I think that this is one of the best mobile carriers on the market today. I also believe that T-Mobile has the right idea with no contracts, I was literally paying 117% more for the same services through another mobile carrierG«™.go T-Mobile go!

Paul Sprague
InformationWeek Contributor
Steven W
Steven W,
User Rank: Apprentice
3/27/2013 | 4:14:01 PM
re: T-Mobile's iPhone 5 By The Numbers
Prepare to be rejected if your credit score is not A+, you can't reasonably complete a credit application, your annual income is too low, or you have a bankruptcy or foreclosure in your credit history. No, you will not make three payments and vanish into the forest. This will be much like a car note. That means repossessions are possible. A new reality show, where this big man shows you a repossession order, and then demands your handset? Call me insightful :). Since it's locked to T-Mobile and it's now illegal to unlock without the carriers permission, there will be a poster child who actually gets fined, sued, or even criminally charged for unlocking the device (and they will snitch on the cell phone shop that did the unlocking) . It's not actually your phone until it's paid off and T-mobile releases the ESN code, or network lock.
Let's see whose made an example of first?
CIOs Face Decisions on Remote Work for Post-Pandemic Future
Joao-Pierre S. Ruth, Senior Writer,  2/19/2021
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
CRM Trends 2021: How the Pandemic Altered Customer Behavior Forever
Jessica Davis, Senior Editor, Enterprise Apps,  2/18/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Flash Poll