T-Mobile to sell iPhone starting April 12
T-Mobile USA said on Tuesday that it will start selling Apple Inc's iPhone on April 12, making it the last of the big national U.S. operators to sell the popular smartphone.
The No. 4 U.S. mobile provider, which plans to merge with smaller rival MetroPCS Communications, is launching the iPhone right after its elimination this week of device subsidies and two-year service contracts favored by its bigger rivals.
T-Mobile, a unit of a unit of Deutsche Telekom AG, hopes the new service offerings will differentiate it from bigger rivals that already sell the iPhone: Sprint Nextel, AT&T Inc and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.
The company, which has long struggled with customer defections, hopes to attract cost-conscious consumers with an aggressive marketing campaign that focuses on its elimination of service contracts and by clearly outlining the monthly cost to its consumers for the iPhone.
U.S. operators have traditionally subsidized phones in exchange for tying customers into contracts, a practice that T-Mobile USA criticized as lacking transparency.
"The industry's broken. You know the villains," T-Mobile USA Chief Executive John Legere said at a press event.
In particular, T-Mobile USA is taking aim at No. 2 U.S. operator AT&T because the two companies use the same network technology, making it easier for consumers to bring their AT&T phone to T-Mobile's network.
Legere estimated that T-Mobile customers would pay about $1,000 less over two years than they would for comparable services at AT&T, and T-Mobile's website directly compares its pricing to AT&T's service fees.
T-Mobile will offer the iPhone 5, Apple's latest model, for an upfront payment of $99.99 followed by 24 monthly payments of $20. Its bigger rivals charge $200 upfront to customers who sign a two-year contract.
T-Mobile will sell the older iPhone 4 for a $69 up-front payment and a commitment to pay $20 a month for two years. It also promised smaller upfront fees for the latest smartphones from BlackBerry and HTC Corp.