Posted at: 03/26/2013 6:13 AM
Updated at: 03/26/2013 6:14 AM
By: Associated Press
T-Mobile USA is ditching plans centered on familiar two-year contracts.
Instead, the fourth-place cellphone company will focus on selling phones on installment plans.
In practice, the phone-buying experience is not that much different from before. For instance, someone who wants a Samsung Galaxy S III would pay $70 upfront and then $90 per month for unlimited calling, text and data. That monthly fee includes $20 to pay off the cost of the phone over two years.
But by separating the cost of the phone from the service, T-Mobile is making its plans and upgrade options easier to understand. When the phone is paid off, the $20 fee in that example disappears.
The company plans to lay out the rationale for the new plans at a New York event today.