T-Mobile CFO Says iPhone Price Drop Planned All Along, Las Vegas Market First To Join MetroPCS Spectrum

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Speaking at the J.P. Morgan Global Technology, Media and Telecom conference earlier this morning, T-Mobile’s CFO Braxton Carter touched on the company’s new iPhone 5 pricing. In fact, according to Carter this was T-Mobile’s plan all along.

“When we look at the overall landscape, there’s no need to continue with the initial promotional pricing we had with the iPhone…it was a planned promotion for a very limited of time to create momentum.”

What disappoints me is how this wasn’t mentioned when it was announced, put on pre-order, released or when the company announced “gangbuster” sales. Not a single mention about the pricing being limited-time. No fanfare was given for the price increase and one might think that T-Mobile would want to play up the limited time pricing promotion to drive as much business as possible inside that 30 day timeframe.

This is so very UNcarrier of T-Mobile and it wouldn’t be right to say the company was vocal about this from the get-go. Smartphone prices rise and fall, I get that, but what bothers me about this is how T-Mobile is acting so coy about this as though it was part of some grand plan all along.

Now for the good news:

I caught the tail end of this event and the two good pieces of news I gathered was the discussion about the Las Vegas market and T-Mobile/MetroPCS spectrum. Good news for Las Vegas residents as T-Mobile is set to “join” their networks together going from 5×5 network capacity to 10×10. In technical terms that means a great deal, but in laymen terms it just means you can hopefully expect better service. That’s expected to be complete any day now.

The second piece of intel was the mention that T-Mobile would “blow through” their goal of 100 million pops covered with LTE by the end of summer. This from T-Mobile’s CTO Neville Ray who said that in the next six weeks T-Mobile plans to meet and surpass their stated goal of 100 million LTE pops by the end of summer.

 

 

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  • None

    The UNcarrier seems to still want to play carrier games.

  • Nearmsp

    I think the fall in revenue last quarter and the full impact of the reduced revenue as a result of T-mobile customers moving from Value plans to the new Simple Choice plans meant, T-mobile had to do something very quickly to repair their balance sheet. Instead of saying we screwed up and thus need to reduce subsidy, are now saying well, we always meant to charge full amount. This move damages their credibility in building an uncarrier branding. Poor show by top leadership.

    • Manny

      They’ve been losing money since 2009. The fall in revenue had nothing to do with the price change.it didn’t just hit them now. Especially with the revenue they made from selling iPhones at the $99 price. In this case I have to agree with the author. T Mobile leaves very little room for its own defense where I usually am a staunch defender of them.

    • Jason Crumbley

      The simple choice plans had little to no impact on last quarter due to when they actually started.

  • badbob001

    Shouldn’t that be “T-Mobile CFO Says iPhone Price INCREASE Planned All Along”?

    • Gummo

      Yes the title was not well written. Could even have said “initial iPhone pricing was promotional.” There never was a price drop since the phone had never been sold on T-Mobile to begin with. As you accurately point out, in fact the was apparently a planned price increase.

      I think David is just allergic to writing iPhone and pricing titles. Haha, dude just keep it simple.

  • Brad

    Nobody is forcing you to buy the iPhone from T-Mobile. Buy it from Apple, buy it on eBay, Craigslist, whatever. Stop whining.

    • Manny

      Not sure if you read the whole article but the price is not the issue. It is a matter of transparency and honesty from a company that has a history of not having those qualities. I love T Mobile and I always defend them but this is kind of shady. It would be different if it was 149.99 from the beginning what they said it was going to be a promotional price but they didn’t they said this is the price and then out of nowhere saying it was increased without good reason and now are defending themselves.

      • thepanttherlady

        I agree 100%. What is sad is since T-Mobile became the UNcarrier, their tactics in regard to transparency to their customers is becoming worse and worse.

        • Verizonthunder

          I agree with they are contradicting there stance. They could do the same with their plan’s and be coy about it

        • Manny

          I hope CEO Johnny comes to the rescue and we see some accountability from the top.

      • http://dualshockers.com Joel Taveras

        Where was it written in stone that pricing wasn’t subject to change? Show me the link? Or brochure where it says that. Companies do this all the time.

        • VG

          So, you think it is normal for an 8-month old smartphone to have a price increase???????

        • techymexican

          technically it’s still cheaper than buying it from Apple and off contract with all other carriers

        • Manny

          Technically this article’s main point is…why is T-Mobile being shady

        • thepanttherlady

          The $20 savings between T-Mobile’s price and Apple’s would be well spent to deal directly with Apple I would think.

          The only real advantage to go through T-Mobile that I can see is being able to utilize the EIP option.

        • VG

          I think Apple is still offering 0% financing if you go through the whole Barclay’s credit approval process. For the extra $20, I’d definitely buy the unlocked version from Apple!

        • thepanttherlady

          That’s another good point I overlooked in my response. That same $20 is well worth avoiding the unlocking headache many are receiving from T-Mobile. ;)

        • Jose do

          I was having problems with my iP5 and they replaced it through there whole warranty exchange thing. The new one I got was unlocked vs my old one being locked. Not encouraging people to do this but just giving my experience with them.

        • Manny

          They don’t have to write it in stone. Find a phone in the past year that has had it’s price increased without warning. They don’t because they are made in bulk and ship out. It’s called price gouging in other industries such as oil and corn. Matter of fact that isn’t normal practice period. Prices go up due to costs and companies say “The cost of this or that went up or workforce is down etc.” But this phone didn’t change manufacturing costs suddenly and it isn’t costing them more all of the sudden to stock or sell it. And if I quote the article

          “When we look at the overall landscape, there’s no need to continue with the initial promotional pricing we had with the iPhone…it was a planned promotion for a very limited of time to create momentum.”

          When did they say it was promotional. Don’t compare apples to oranges.

          Clearly this was a planned promotion with an increase that no one knew about not a “hey let’s raise revenue a bit”

          So you can show me where it says THIS IS A PROMOTIONAL INTRODUCTORY PRICE.

        • thepanttherlady

          Example of a phone that’s price increased without warning was the Galaxy Note 2. Launched at $649.99 and soon after was upped to $699.99. Last I looked, it dropped to $679.99 for those with Value or Simple Choice plans. Still up from the original price.

          I agree with your post; however. If the pricing is promotional tell your customers! They’re the ones buying the phones. I don’t remember T-Mobile stating the Note 2 original pricing was promotional to justify the increase; however, I could be wrong. If I’m correct, this just makes the iPhone increase seem that much more shady IMO.

        • flyoverguy

          Get a grip, gouging? Comparing a luxury phone with commodities like corn and oil? It takes a lot of corn, oil and other commodity inputs to produce an iPhone, or just about any other consumer item, and the prices of all these items fluctuate constantly based on not only input costs, but also, among other reasons, supply and demand. If you actually think that the pricing of luxury manufactured products should conform to your version of what’s fair, you got shortchanged in your high school economics education, sheesh!

          I get being annoyed by a price increase and being upset that I didn’t pull the trigger when I should have, but I’m guessing T-Mobile sees that the demand more than justified a minor price increase of 8.6%. After all, T-Mobile’s fiduciary duty is to not shortchange their shareholders.

        • Manny

          Sounds like you are a shareholder. I feel like you only read my post and just get annoyed with it and didn’t take the point seriously. I compared them to show the extreme of how there isn’t a supply and demand like in other fields so sudden price changes aren’t warranted unless it is only to seek more profit (which I think companies deserve money… they are a business.)

          It isn’t fair business practice to raise a price because you feel it is not the right time to make more money. And more importantly, it isn’t fair business practice when you claim it was a promotional rate. You know as in, “For a limited time, get the iPhone at 99$ until the end of April.” I wasn’t planning on getting the phone, and I don’t care if it is a $199 payment, listen, I don’t care if they raise it again. But if a company decides to feed me a lie about how it was planned but nobody knew about it, I’m not gonna be okay with it.

          Not only does it not sit well with me but it makes me feel a lack of trust with a company that says “We are gonna change, things are gonna be different.”

          Not about numbers, about honesty. I can’t recall another phone company just saying… Guys the price is going up cause this was a promotional rate, out of the blue without anyone knowing. And if it did happen? It isn’t right.

          Luxury to Luxury? Cars. Ever see a promotional rate that then Mazda says, “Here is the real price?” They have a responsibility to not only their shareholders but the banks that finance their leases and more, but I rarely see a lack of transparency when it comes to cost.

          Anyone, enough of all this. You don’t have to agree, but the fact is T-Mobile acted shady and inconsistent with their promises. Sure I expect price changes, I’ve seen promotional pricing before at T-Mobile… this was not promotional.

  • S. Ali

    Apple doesn’t allow you to sell the phone for less than they charge. They clearly had a deal to offer in initial promotional price.

    • Whiskers

      Their website list them for $649 unlocked and no contract , so with T-Mobiles increase to $629 still is still lower than what Apple is listing them for.

    • gshoq

      I think Apple could care less to offer T-Mobile deals to help push phones out. It wouldn’t be in its own interest to maintain its premium pricing. T-Mobile probably reduced its own margins for this initial promotion.

      • Whiskers

        You just backed up my point , you said in above statement “Apple doesn’t allow you to sell the phone for less than they charge”.
        Even with T-Mobile’s $50 increase their still selling the i5 for less than Apple’s suggested retail price of $649 .
        Either at $579 or $629 , T-Mobile is selling the i5 under Apple’s normal retail price which clearly indicates there’s no promotional price agreement between the two since it’s under Apples suggested premium retail price of $649 anyway .
        It’s more like T-Mobile sees the demand and fast sales already with the i5 and see an opportunity to cash in before the next iphone is released .
        So much for their $99 down UNcarrier deals.

        .

  • Qbancelli

    There are better phones out there.
    Who cares about the stupid iPhone?

    • jonathan3579

      While I agree there are new(er) and better phones than the iPhone, their actions are speaking louder than their words. Would you be more upset if this happened with an Android or WP8 device? It makes no difference which phone this happened with, the whole premise is that what they’re doing is anything but pro-consumer. (Which directly conflicts with their new UNcarrier image.)

    • http://tmonews.com David

      Wow…way to miss the point!

    • Paul

      While true, the iPhone was the catalyst that drove people away from Magenta. Bringing it on means people will have no complaints about the availability of the iPhone and an affordable plan.
      I, personally, prefer the Android line and have a Note 2.

      So…have anything to contribute?

      • gentleman559

        The iphone is a great asset for T-Mobile and should have happened long ago. I personally am an Android fan but the Iphone has its advantages for some as does Android for others. Thank God Not everyone likes the same things in this world or we would all be Justin Beiber fans….LOL

        • Paul

          You shall NEVER mention Beiber in there…NEVER!!
          (ha ha ha)

    • Dakota

      Obviously a lot

  • Christopher_McG

    Las Vegas is like one of the best T-Mobile markets for cutting edge new network technology, and even better now with the MetroPCS merger. They need to start using MPCS towers ASAP too.

    • Jose do

      I live in Las Vegas and the TMobile coverage isn’t that good.

  • VG

    I wonder what other T-Mobile phones currently have promotional pricing that the public doesn’t are temporary? Are we going to see the HTC One also go up? So much for the “Get Any Smartphone for $99 or less” slogan that T-Mobile unveiled when they became the UNcarrier … base iPhone 5 and Galaxy S4 are both over the $99 threshold.

    • Manny

      I just realized that. Lol. Flagship S4 and iPhone 5 are not counted in the any phone under $99 range.

    • Dakota

      They are stupid. The $99 downpayment is a price point that catches peoples attention and at least would get them to look into Tmobile since they are trained that the ‘good’ phones are 199-249. Tmobile has never been good at being consistent with their messages

  • omnirep

    Here’s the problem. Since all the layoffs communication has been a problem at T-Mobile. With all those broken connections there is lots of confusion at this time. Let’s hope they work it out.

  • DC

    Come on. That’s not a “bait and switch.” Upgrade fees were a bait and switch. You read a price, get to the register and then pay $18 more than was on the sticker. With the iPhone it’s just a price change. You can wonder all day about why, and I have my own theories, or you can take the company’s word for it. But calling it a “bait and switch” is libelous.

  • http://twitter.com/Joegar43 Jeremiah

    I don’t see what the big deal is it’s
    Only 50$ more. I always buy my phone at full price. If i am interested in a new device i just save a lil bit for 2 or 3 weeks and then walk into a T-Mobile. Store with 600$ and get what I want.

    • Whiskers

      So you would pay $50 more for a iphone that’s soon to be outdated with the next iphone model being announced in a few weeks .
      WOW , that’s a smart move…..

      • Jose Hernandez

        Well, I it sounds like does not care about the price. He’s entitled to his opinion.

      • http://profiles.google.com/mrice.hill Mr. Hill

        New iPhone won’t be announced until the fall. iOS 7 is being announced in a few weeks, not the new iPhone.

        • Whiskers

          Yes I know , what I was getting at was that we are only a few short weeks away from their announcement of the next iphone design and IOS 7.
          Once that’s all out in the open , a lot of people will make a choice as to wait for the next iphone when it’s released .
          Increasing the price of the existing i5 and soon to be outdated iphone I think is a bad business decision when your suppose to be the next big UNcarrier .

  • philly8

    They way I see phone pricing is like the mortgage industry. Prices can change daily.

  • http://twitter.com/gallifrey Craig Campbell

    Had they said from the beginning that the $99 was a limited time offer (and I mean clearly, not in some microscopic print, if it was even there) then I wouldn’t see a problem. Upping the price abruptly with no warning might be perfectly legal, but it’s not cool, and it gives people a bad taste in their mouth. T-Mobile should not be inviting bad press.

    • Whiskers

      Not to mention raising the price on a phone that’s soon to be yesterdays model in a few weeks don’t sit well with normal business pricing.

      • gadget_hero

        I don’t think the new iPhone will be out until Q3

      • Nick Gonzalez

        From what Tim Cook said, I wouldn’t expect a new iPhone until at least this Fall sometime. We aren’t even through spring yet, so the iPhone 5 still has plenty of life to live.

  • Paul

    Magenta can claim it was part of a plan they had in place…it’s easy to see that they are trying to cover a mistake. Hopefully, they won’t handle future mishaps like this.

    Looking forward to the LTE going up in Dallas, scheduled for next month.

  • PiCASSiMO

    Question for the technical people:

    I have a T-Mobile customer for about 6-years, and I currently have a Nexus 4 phone used here in northwest suburbs of Chicago (just north of O’Hare airport). Sadly, I’m getting everything from HSPA+ signal, to 3G, to Edge, and even NO SERVICE.

    If I buy a LTE equipped phone and T-Mobile turns on the LTE light for Chicago, will I get better service (both voice and data)? Or will it be only where an LTE signal/tower is located and then fall back on the normal HSPA/3G/Edge signals/towers?

    I’m just very disappointed in these pocked of EDGE and NO SERVICE areas, and I hope that T-Mobile will get their sh*t together and address them. I can understand it if I was in booneyville, but 10-minutes from one of the world’s busiest airport is just embarrassing.

    Sometimes, I question if I am willing to pay a higher monthly price to have consistent network performance, and just move over to AT&T or even Verizon.

    • niftydl

      An LTE enabled phone will not help your coverage. In fact, the opposite has been true for me in Washington D.C service area. LTE can get much faster data, but you also have to be much closer to the tower to get the same level of signal strength. There are some handoff (LTE -> HSDPA) problems too, I leave my phone in 3G only mode unless I need the fast data access.

      I understand your frustration though and I see service availability as an issue at times, but no other provider will give me GSM network (I pick what phone I want to use and when) and unlimited data (9 TB). I do not want to ever think about how much data I am using. AT&T has more consistent performance and coverage, but you pay for the privilege and any extra data. Verizon is great, but you also pay for the privilege AND they dictate what phones you can and can not use. Absurd.

    • gentleman559

      I moved to Verizon and the service is soooooooo much better but I miss T-Mobile. I really like them as a company and prefer the freedom they offer compared to Verizon. I haven’t seen Edge, 1X or anything below 3G anywhere. Being that its 2013 Edge is just not acceptable. Its win and lose no matter what carrier you go to.

      • adeedew

        Perfectly put….”Being that its 2013 Edge is just not acceptable. Its win and lose no matter what carrier you go to”

    • Dakota

      In Atlanta, I often cant get coverage when my friends on ATT are getting 30mbps

  • princedannyb

    I bought a Metro PCS phone just to test reception in my area. I found that if I’m in an area labelled “Best” on Metro’s map, I get 2-5 bars, in “Good” I get 1-2 bars, and in Moderate I get 1 bar to no reception. But if I understand correctly T-mobile will make Metro’s towers a lot more powerful.

  • gshoq

    Does anyone think that maybe T-Mobile just kept the price change under wraps better than pretty much any other price-change/product release? Nowadays, it seems like price and product strategies get leaked and then posted on blogs before they take effect.

  • http://profiles.google.com/mrice.hill Mr. Hill

    I agree that it’s pretty shady of T-Mobile to raise the price and now say the $99 price was temporary and promotional without telling customers or even employees. Prices are always subject to change but it’s the fact that they claimed it was a limited time promotional price is the problem because they never stated this anywhere.

    • http://www.facebook.com/dantunks Daniel Tunks

      They did tell employees. If your a employee read your policy and if you did you could have informed your customers it was promotional like I did the entire time.

  • TechHog

    NYC LTE within the next 6 weeks??? :) That better be what this means…

  • Zac

    David, you know I love you but you sure have a knack for writing titles that say the exact opposite of what you mean. It must be a gift

  • philyew

    If you look at the slide deck from the Capital Markets Day presentation back in December, when they announced the 100 million POPs target for LTE, it says quite clearly that it was an H1 2013 objective.

    Since H1 2013 ends in 6 weeks time, all that Neville Ray has said is that they will meet their objective. They aren’t significantly ahead of schedule at all, unfortunately…

    …Depending on the loose way that TM tends to interpret market coverage (i.e. HSPA+ on PCS markets announced as live well before the whole market area was covered) they still may not achieve the 100 million POPs coverage in terms of real-world customer experience.

  • Genecio

    In Magenta’s defense, it did say pricing was promotional and subject to change. Although it was in fine print, I knew it wasn’t going to last because T-Mobile was offering a $70 subsidy.

    • Dakota

      People dont care about fine print; they care about the price…Im glad the first month of iPhone sales was good for them but I doubt it was good enough to put them on par with the other carriers and let them say they dont need promotional pricing to lure people into stores

  • Dakota

    Well Braxton, I hope youre not shooting yourself in the foot. Youre surely demonstrating that Tmobile really isnt much of an UNCarrier as its acting like all the other carriers. A surprise price hike with no advance warning. And you dont think theres a need to continue promotional pricing? I guess I missed the report that Tmobile gained another 50 million customers and is now among the top carriers. One of t he selling points you had that caught people’s attention and got them to at least look into Tmobile is when you were selling the IPhone for a cheaper price than everyone else. Also the fact that they only had to put $99 down instead of a subsidized $199 so it made it seem like it was $100 cheaper. Now it just seems like the same ole same ole with a carrier that has worse coverage in many areas for many people. Now youre acting like the same Tmobile

  • tommest

    I live in vallejo, ca . My lte speed for my tmo galaxy s4 is 38 up and 18 down. Thats fast. :) hopefully they win the 600mhz spectrum next year and remove all the 2g edge .

  • adeedew

    can i ask a question about LTE? Does it stricly apply to data or quality of call reception? I switched to TMO and bought their iphone and my patience is running a bit thin on the call quality and data although says 4g most of the time, still see Edge time to time. Concerned on whether this is still a very much work in progress carrier and i’m giving TMO too much of the benefit of doubt while saving a few bucks when i can jump back to ATT or verizon and KNOW my call quality won’t suffer even though i’ll have to monitor my data usage again and pay more which i was hoping to avoid. It just sort of feels sometimes like TMO isn’t ready for primetime

    • RedGeminiPA

      LTE, for now, is primarily for data.

      If your iPhone is showing “4G”, then it’s connected to HSPA+, not T-Mobile’s LTE. When you have an LTE connection on an iPhone (or iPad), it will display “LTE” for signal type.

      T-Mobile is still a work in progress at this point. Be glad you see anything other than EDGE, since I’m in a decently sized city that’s still stuck with nothing but.

  • atmorep

    It wasn’t tmo that wanted the price increase … Apple said they didn’t want tmo selling their phone for less than the GS4