After making several bold moves challenging traditional cellular industry marketing practices last month, T-Mobile had a few more surprises up its sleeve. Today the carrier announced a no-money-down trade-in offer on the iPhone 5, which the company will launch on Friday.
“Well-qualified” customers will be eligible for the deal when they turn in an iPhone 4 or iPhone 4s, which can be from another carrier’s network. Depending on the value of their device, T-Mobile said customers also could receive credits of up to $120.
T-Mobile customers taking advantage of the offer will pay for their iPhone 5s through a series of monthly payments that will end when the device is paid for. As a recent New York Times article pointed out, that’s a major departure from traditional cellular carrier policies, which continue to exact the same monthly fee even after a customer has covered the cost of the device.
As T-Mobile announced last month, customers not turning in an old iPhone can get essentially the same deal, but they will have to put $100 down. In either case, customers will be able to cancel service at any time. If they do they will have to pay off the balance owed on the device but there is no additional cancellation fee.
Putting an end to previously never-ending device subsidies was just one of several potentially disruptive moves that T-Mobile announced last month.
As the New York Times article noted, the carrier also has a different policy than its competitors when a customer exceeds his or her monthly data allotment. Instead of incurring automatic overage fees, the customer’s data rate drops to 2G speeds for the rest of the month – unless the customer authorizes an additional payment to continue the higher-speed service.
“These bold moves serve notice that T-Mobile is canceling its membership in the out-of-touch wireless club,” said T-Mobile CEO John Legere when he announced what he called the company’s “un-carrier” strategy last month.
The NY Times author put it a bit differently, observing that T-Mobile has violated the “unwritten conspiracy code of cellphone carriers.” T-Mobile, the author said, “admitted that the emperors have no clothes.”
T-Mobile has struggled to differentiate itself in a market dominated by AT&T and Verizon. But things are looking up for the company, now that it has begun to deploy LTE and now that it not only has the iPhone but has a differentiated service offering for the iPhone and other devices.
