Will Eliminating Phone Subsidies Save T-Mobile?

Remember the heady days before Google’s Nexus One launched, when we wondered whether a search engine company might be the one to save us from handset subsidies tied to onerous contracts. Two years later, we haven’t quite been saved yet, but one mobile carrier announced bold plans to get rid of handset subsidies. Simply put, the idea of a T-Mobile iPhone is tempting for many, but would you pay as much as $800 up front for one?

Plenty of T-Mo customers already have: there are more than a million unlocked iPhones running on the network as we speak, even though they won’t officially offer it until next year. Now, though, the bring-your-own phone policy will be official.

T-Mobile customers will have three choices starting in 2013. They can pay for their new phones up front when they want a new one. If they don’t have the cash right now, they can pay in installments along with their monthly bills. Or they can bring their own phones purchased elsewhere, such as an unlocked GSM handset from a foreign carrier or from AT&T.

The precedent for this is… not great. In Spain, Vodafone and Telefonica ditched subsidies not long ago, and both lost subscribers as a result. Will Americans be able to do the math and see that paying full price for their phones could save them money over the course of a wireless contract? Guess we’ll find out. Well, if Americans are known for anything as a nation, it’s our solid analytical reasoning and our strong impulse control.

T-Mobile isn’t paying for your phone anymore, and that’s a good thing [Digital Trends]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.