T-Mobile CMO Says Device Subsidies Need To Go, Not Likely To Happen

Speaking at the GeekWire Summit, T-Mobile CMO Cole Brodman says carrier subsidies are hurting the industry.

“It actually distorts what devices actually cost and it causes OEMs, carriers — everybody to compete on different playing fields, and I think it is really difficult, especially from a consumer perspective, because it causes consumers to devalue completely the hardware they are using…. It is amazing hardware, but it has become kind of throw away. So, it is unfortunate, you’ve got dual-core, multiprocessor devices with amazing HD screens that get thrown away at 18 months.”

Brodman expressed his desire while on stage to be “king for a day” and get rid of subsidies in the industry forever. However, Swype CEO Mike McSherry took the opportunity to remind Brodman he is a “king of the industry” and could kill device subsidies if he wished. Brodman responded by reminding the audience that T-Mobile is just one of four national carriers and if the other three “don’t want to play along,” it’s a tough move for T-Mobile to make on their own.

“It’s hard when the other three don’t want to play along. It becomes difficult because consumers vote with their pocketbooks, and they will almost always pick a low device price oftentimes over a low rate plan price or a bundled rate plan price. We’ve experimented with that model more than anyone in the country.”

As the conversation continued, GeekWire head Todd Bishop asked Brodman if they could continue to compete without the iPhone in their line-up, to which Brodman responded with a now familiar story:

“Yes we can. We have fantastic alternate choices,” said Brodman, citing its lineup of Android, Windows Phone and BlackBerry phones. ”And I think those devices — whether it is through the app experiences, through the network experiences or through the devices themselves — do things that rival the iPhone — and in many cases — do them better than the iPhone. So, I absolutely think we can be successful. I don’t think it is healthy, frankly, for there to be kind of one OS industry dominance. And that’s why I think it is going to behoove us all to watch Windows and hopefully the application ecosystem will follow, and I think that will really help the overall industry balance.”

Check out the full video over at GeekWire.

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  • Taron19119

    Yeah it well never happen and if it do I want the best phone out and low price

    • Rastlin001

      Alot of what people say about the subsidized I do agree with. I am among the majority that if you said that this phone was $600 I would say fu and get a phone off of Ebay. The subsidized phone was the only way I could afford a gs2 do I know that it wool cost me more in the long run, yes I do but it’s easier for me and my family to post the extra 20 in too of my bill then to come up with extra 600 for the phone on the spot especially since I am a father of 4. Why should those whom make less or simply don’t have the finances to get a high end phone in one fail swoop have to be forced to have sub part devices. It is nice to have the option of being able to have a high end device even though it costs more in the long run. Those of us whom mostly live paycheck to paycheck it’s alot eaiser to swallows micro payments and use the money for bills or supporting our family until the economy gets better and we have better jobs so we don’t have,to worry about living hand to mouth. Just sayn’

      • ERIK

        Sounds like ur the custmer tmo tries to attract with their value plans

  • Edward_2k1

    A good point but a hard one to argue/win.

  • What they need to do is get rid of the device subsidies but at the same price also eliminate the ridiculous markup on every device.  Sell devices for a reasonable profit and have low rate plans and you will see subscriber growth.

    This is working well for the pre-paid carriers who’ve never offered subsidies.  As a full service carrier TMO could get away with charging a bit more and still easily beat out the other 3 full service carriers.

    • MacRat

      Not only sell them at a reasonable price, but also UNLOCKED!

      • Whiskers

        And with all radio freq…
        So you can use that favorate phone on any carrier.

    • Toffer_Lloyd

      If you don’t want to pay a “ridiculous markup” there are hundreds of retailers out there ho will sell you an off-contract phone. You don’t have to buy your phone from T-Mobile.

  • Corey P

    People will NEVER stop wanting free phones, no matter the actual cost or value of the phone. Even if you have a lower rate plan, FREE is the only thing most people want when buying a new phone

    • Cp60188

      They can go to Walmart and get a $5 prepaid. Europeans pay full price for their unlocked GSM phones, and have complete mobility. T-mo would lose some of the free phone customers, and we all would have an infinitely better network because there would be plenty of money to upgrade it.

    • Snow_Fox

      That is exactly his point. As a former phone salesmen he is completely right. Even a phone that people get for “Free” can cost up to 300$.. 

      People are completely unaware of what their hardware cost and have absolutely no appreciation for it. Literally I have explained to a customer “look, this phone isn’t ‘free’ and you don’t get a replacement if something happens to it, you need to understand that just because your not paying for it upfront doesn’t mean the phone itself is free”

      Sure enough same customer came back a few days later “OH MAN, I broke my phone can I get another free?” No, they weren’t joking.. they really wanted another 300$ phone free.. People don’t listen and they are disappointed when they don’t get their way… They don’t understand the value of what they have…

      • Magentadress

        You mean the value of a phone that costs $150 to manufacturer but sales for $800 with tax?
        Stop screaming at consumers and blame the manufacturer for ripping you off with insane profits.

        • monkeybdb

          again, as i posted earlier. the manufactures are the mark up. carriers buy the phone very close to full cost. Gal S 2 is close to 500. :) is like 75-80 thats pretty close to its 109.00 retail. not a lot of wiggle room.

        • Snow_Fox

          lol…Yeah because consumers aren’t total sheep who create their own problems in the first place.

      • UlyssesGhost

         I fully agree with this.  I was sitting with co-workers at lunch a few days ago, one of whom was complaining that when he broke his “free phone” that they wanted $400 for a replacement device.  I tried to explain to him that his phone was never “free” that they spread the cost of it into his monthly bill by him paying a higher price for the service and it was like trying to explain quantum physics to a 1st grader.  He just couldn’t get past the “it was free” part. 

  • Wolfwood

    Couldn’t agree with him more.  Unfortunately, the “free” phone mentality is deeply ingrained into the average consumer’s psyche.

    • IMO The average consumer needs nothing more than a feature phone.

      • Magentadress

        In my opinion the average consumer doesn’t even need a phone. Especially those middle school and high school brats.

  • whiteiphoneproblems

    This is how I felt when we signed up for the EM+ plan we’re still happily on (and paid full retail for the phones we’re still using)…

  • Albarrios

    what a dick… how else can most people afford these phones????

  • Taron19119

    If this happen can we get a phone that well get update to the lates os for at less 2 yeahs

    • Brian Roush

      Did you mean to say, “If this happens, can we get a phone that will get updated to the latest OS for at least 2 years”?

      • Darkbotic

        I LoL’d and died…

      • 30014

        Best laugh I’ve had all day.

      • Coreyp

        If you did that to all comments on this site, you would have to quit your day job. (thanks for the laugh)

  • Mr P

    but wait did he pretty much just admit the value plan idea isn’t working? mentioning that people rather have the phone for cheaper than there actual plan bundled? 

    • It needs better marketing. Have Carly and some “AT&T Guy” on screen with the following conversation:

      AT&T Guy – “I just bought this new smartphone for $200!”

      Carly – “That seems like a pretty good deal since it would have cost $650 to buy it straight out, but how much are you paying a month?”

      AT&T Guy – “$139.99 a month for unlimited talk, text, and web.”

      Carly – “On T-Mobile, you’d only be paying $74.99 per month for the same plan. After just 7 months you’d have already made back that $450 difference and still have 17 months of savings left on that 2 year contract.”

      AT&T Guy – “Darn, I wish I had done basic math.”

  • JWC57

    I’m a big fan of this; I actually get crappy T-Mo service where I live in Pennsyltucky, and a year ago wanted a smartphone; so, I just paid full price on eBay for MyTouch 4G, and once data plan costs decreased this past fall, I renewed my contract – now I’m paying less now than a year ago. European cell companies/markets use this business model, I believe.

  • whiteiphoneproblems

    their no-interest installment plan, which was part of EM+

  • Jaygqitalia

    Ugh I have been stuck with my blackberry waiting to get a new phone and havent yet because I keep hoping the Iphone 5 comes to T-mobile this summer or fall. Is there even a slight chance of this happening or should I just bite the bullet and buy the Amaze 4G I like

    • Didn’t the Amaze 4G already hit EOL status……

      • Jaygqitalia

        220 at the t-mobile website.

      • Sammyesparza91

        Nope, the white one did i believe, the black models sell more 

    • JBLmobileG1

      The Amaze 4g is an Awesome phone. I have the white one and couldn’t be happier. The built quality is top notch for an Android phone and its fast with a great camera. I know there is a newer phone by HTC coming out but because it doesn’t have a removable battery or sd card slot… I’d have to say that the Amaze still has the edge.

  • I could not agree more. Americans in particular, though, have to get rid of the mentality that goes along with the cheaper or free device as has already been said. Until that happens (not likely, at least not unless all four carriers play along), subsidies will always be around.

  • Cyclone

    Instead of $550 or more T mobile needs to sell phones for $300, same price they paid to Samsung or HTC. Then they don’t have to subsidize anything.. Also have lower rate plans under contract and higher rates without contract.

    • Are you crazy? That would put T-Mobile in the hole by about $100 per sale! Marketing and distribution costs are built into the price too! Already T-Mobile barely skids by with $18 per customer per year on rate plans. If there were no subsidies, then T-Mobile could make a profit of $150 per device per customer per two years.

      • UMA_Fan

        So is T-Mobile making that $150 now on value plan customers?

    • Whiskers

      Or better yet , why not have the Cell phone manufactures sell the phones retail themself.

    • monkeybdb

      as an employee i get phones at cost (before tenure) so i can see what they actually cost. youd be surprised how much more they cost than you think. the gal S2 is close to $500

  • Taron19119

    okay well every cell phone carrier needs to have the same phones then

  • davidwal

    This is from the same company that sells the blackberry 9900 the most out of all the carriers in the US.

    • Hey Now

      And has the least expensive plans of most of the carriers in the US.  So your point is?

  • hg

    The mobile device makers are in collusion with carriers and each other to over-inflate the price of mobile phones.

    The HTC Radar costs the same at retail as an iPad2.


    • Whiskers

      That’s what keeps me from buying the latest high-end phones released every month.
      At the prices they demand for that puny 4″ screen , you still don’t get a true web sensation like a tablet.
      You might as well get a phone for what it’s used for (phone call and text) and save your money and get a tablet for the money their asking for on a 4G phone ($600.00+) , and get a real web surfing experience that you can actually enjoy.

  • Snow_Fox

    I actually agree with the CEO. People don’t understand the value of the device they are buying. (Actually a lot of people don’t understand anything about technology or its pricing at all apparently)

    People are totally clueless as to what they are buying.. and if subsidies didn’t exist.. then we could see cheaper prices on phones and data rates..

    Good luck convincing your average joe to pay full price though…

  • A lot of Europe and Asia are forced to buy phones at full price.  There doesn’t seem to be a problem in those places with people not being able to afford it.  I personally think it’s a great idea.  Companies would be forced to innovate because they know people can’t afford it and so in turn will make a more careful choice before buying.  It also benefits consumers in that devices will be as likely to be obsolete in a short 6 months as they are now.

  • Albarrios

    how many people could actually pay full price for one of theses phones???? greed in the industry created this system, now they want to change the rules. See how many phones you sell w/ no subsidies. duh……..

    • I can see where you’re coming from, but look at how many folks have purchased tablets (retail price), and are projected to purchase this year. 

      It’s just that we’ve come to expect a subsidy, but how many of our tech items are actually subsidized?

    • T-MO-FAN

       The problem is we created a system where people who should be spending money on food and taking care of their kids have to have the latest iPhones.  Its ridiculous.  I have a friend who has 3 iphones, but doesnt work and constantly complains about how broke they are. BUT they have iPhones. Its unnecessary. If they got rid of subsidies then the people who cant afford it should get the phones they can afford and stick with their basic phones with basic texting.  thats all they need.

  • Neednewphone

    It makes sense though…If you have all these manufacturers selling devices at MSRP $500-$600, then through competition, eventually the price would be driven down just like any other electronic device that becomes obsolete quickly…But of course, this would never happen because they make a lot dough through subsidies.

  • Get_at_Me

    T-Mobile has always been a pioneer in the wireless industry….Myfaves, Non-Contract, Non-Subsidy Postpaid accts with interest free device financing etc. The model in this article makes complete sense, but just like the iphone obsession, ppl often refuse to acknowledge logic.  You can get a GS2 with TMO with installment plan and comparable data speeds and coverage (in some areas) for less than ATT and VZW, (upfront cost and monthly cost), but the second you mention paying full price for device over installments to a customer, that can be a deal breaker.  TMO is passing its savings onto the customer with its Value Plans, but your average Joe doesn’t realize that…..I think the main issue with other carriers is that they don’t want to lower the cost of their plans if they were to adopt TMO’s Value Plan model.

    • Alfa95

       Because people are so used to the “FREE PHONES” that they fail to see the complete ripoff over the 2 year period.

  • Albarrios

    funny how people cant see the trees through the forest. 90% of subscribers will never/refuse to pay full price… fact.

  • Mar11974

    If I pay full price it better be unbranded, factory unlocked, with no crapware!

    • 30014

      100% agree

    • Sammyesparza91

      Can’t argue with that, well said for me i wouldn’t mind purchasing a phone at full price if it would be bundled with some kind of protection plan

      • DizzahGee

        Subsidized phones don’t get bundled with a protection plan.  If you have your phone stolen and you paid $200 for your superphone the first time to realize that it’s actually worth $500-$700, that’s what hurts the most.  It would avoid customer shock if they know from square one that the phone’s retail price is actually X.

        • CCollision

          Yeah, if that happened to me I’d probably just buy an unlocked Nexus S off Amazon for ~$300 or something. You can always get better deals than from the carriers themselves.

        • monkeybdb

          PHP insurance. pay 130 for that SMartphone instead of full price on a subsidized plan. or even better on value. who wants to pay phone installments on a phone thats broke or lost. similar reasons why lenders require full coverage on cars with liens 

  • Toffer_Lloyd

    Double Post.

  • Toffer_Lloyd

     Only people who are incapable of basic math think that a “subsidized” phone is more affordable. Compare the price of a retail phone plus 24 months of Value service versus the price of a “subsidized” phone and standard contract rate and you will know what I’m talking about.

    • Whiskers

      No , your missing their point.
      Those people who can’t afford $600.00+ cash up front while raising families are not going to ,
      that’s why most would rather subsidize their new phone.
      In the real world with a bad economy , hard earned cash is hard to come by and i’m not talking about losers with bad credit.

      • Nik

        Thats because most people don’t know how to save money and think in the long term

        • Whiskers

          Long term , shiet by the time you save all the money up for that high end phone that sells for over a half a grand easily, the next revised version already comes out.
          Then what are you going to do , start all over again and repeat the cycle over and over again ? Or what if you have multiple phone lines for your family ?
          Get real !
          You would be spending some serious coin for multiple family lines each year.

        • whiteiphoneproblems

          You “repeat the cycle” after two years (or longer)… just as you would on a contract plan. No one except folks with tons of cash to burn should be looking to upgrade every time a hot new model comes out.

        • UlyssesGhost

           Then you buy the next version when it comes out.  Then you have to also look at what it is that you need vs. what you want?  Do you really need the absolute latest superphone? 

          I have been on EM+ since it began.  I have 4 lines.  When we need a new phone on a line, I save some money and shop around.  My wife needed a new phone and hates android and likes Wp7.  She needs a phone for calls, followed by checking email, txt’ing and then some light web surfing.  I found refurb Dell Venue Pro’s on dell’s website for $149.  A fantastic deal, she has a new phone that does what she wants, I continue to have a lower monthly rate and we are all happy.  Got one for my son as well to replace his dying moto cliq that I had bought for 85 bucks on ebay two years ago.   If you have to have the latest and greatest it might be real expensive for you but if you buy what you need and shop around, you can save some real money.  But each to his/her own, what works for me may not be acceptable for you.

        • Whiskers

          Well that may be fine if your on the EM+ program but on the Value plans you now have to sign a 2 year contract roping you in while paying full price for the phones.
          If your under a Value contract and need to replace that smartphone and decide you don’t NEED a smartphone , your still paying for the whole Value package bundle for the full two years regardless if you buy a Dumb phone that you don’t WANT just to make a call or text.

        • UlyssesGhost

          But can’t you bring your own device when you sign up for value? You can also buy it outright and not make installments, right? Ebay and amazon are great places to get phones cheap as well. I am not saying this is right for you, but there are options out there.

        • Spanky

          Sure, you can bring your own device. But if you do that, why should you have to sign a two year contract? That’s my biggest problem with the Value plans.

      • monkeybdb

        did you forget about EIP? ive honestly sold like 10 devices full price upfront on value plans. the vast majority of people use the installments. which in itself is kinda like subsidies, but customizable. which is the beauty of value plans.

      • Toffer_Lloyd

         Anybody who can’t afford $600 up front for a phone shouldn’t be paying $230 for a phone and signing a two year contract for $1440+. Particularly if you’re worried about the bad economy and cash is hard to come by. Yeesh, no wonder the housing industry went nuts.

        • Whiskers

           That would be $1800.00 for with three lines and that’s BS to have to come up with that kind of money for a Cell phone.
          That’s why subsidizing phones is better.How many people whip out $1800.00 every 12 months just for cell phones not including the service you have to pay for ….

    • Vim

      People should do their own math and not assume that the results will be the same for everyone else as well. It’s a shell game.  You’re going to pay for that phone one way or another.  Depending on your exact plan and the phone you want, subsidized plans may or may not be cheaper.  Generally speaking, the current Value plans are usually a better buy than the current Classic plans, but they aren’t better than some of the grandfathered subsidized plans out there.

    • Tward291

      i agree with the fact that unsubsidized is the best thing. but subsidized is better for the average consumer because its all about perception people would rather see 200 than 600 or 700 doesnt matter that they save over the 2 years or not perception is a powerful thing

  • Toffer_Lloyd

     Only people who are incapable of basic math think that a “subsidized”
    phone is more affordable. Compare the price of a retail phone plus 24
    months of Value service versus the price of a “subsidized” phone and
    standard contract rate and you will know what I’m talking about.

    • Coreyp

      That’s the problem, there are MANY people that are incapable of basic math

  • Magentadress

    No subsidies = Forces prices to drop, leading to MUCH MORE AFFORDABLE off contract smartphone pricing in the future.
    Subsidies = maintains inflated off contract prices.

    Some people are too stupid to comprehend this.

    •  Agreed. Subsidies do need to go. However, in the situation that T-Mobile is in right now, I think it’s best for them to just carry the iPhone officially and just subsidized it and THEN in the future they can worry about unsubsidizing it.

    • Whiskers

      Then you are at the level of prepaid service.
      Why would someone pay full price for a phone and have to sign a two year contract as well.
      Stupid idea T-Mobile. 

  • CO_yeti

    I wonder if At&t and Verizon management openly laugh at T-Mobile management in meetings… He wants two very large and profitable companies to change their business models so that his smaller company can compete!?  The point of running a business is to make a profit. Tmo would be much better served making some bold plays instead of the same old medicore, play-it-safe ideas.

    • DizzahGee

      It would be a smart business decision to go no subsidy because telcoms don’t profit off of phone purchases nearly as much as they do service.  Strange thing is, I think Cole wants to turn the cell phone industry into “dumb pipes” with comments like that, which I think is in the opposite of the industry’s interests altogether.  Customers definitely win, though…

    • Heisenberg

      America is the only country that really does subsidized phones on contract, he is suggesting we should join the rest of the world with that model.  Obviously AT&T and Verizon won’t modify what they’re doing if they’re making profit.  I don’t think he is expecting them to, seems like he was just stating his reason why he hasn’t commited SOLELY to no subsidies.

      • WirelessRefugee

        Spot on conclusion. You summarize exactly what he is saying.

        And while the U.S. carriers are reluctant to join the rest of the world, in my opinion prepaid will force them to rethink their way of doing business.

        I read that MetroPCS is gaining record number of subscribers.

        And I agree with major financial and business publications that the Straight Talk SIM program, which is the venture of the “2012 richest man in the world” Carlos Slim, will force AT&T and Verizon to abandon their money-grabbing business model.

  • Ash

    Many people’s head just exploded in the USA. What? no $199 iPhone anymore??!!

    Come one people learn to do basic math….

  • TMoFan

    He’s right though but for this to work the entire industry needs to move in this direction and there’s no way that is happening here. It’s sad that high-end phones are considered throwaways after six months. Yeah the tech may be old, but only because the tech keeps improving. These are the same people who call up TMo looking for a “deal” and get mad when they don’t get one. I’m still rocking my G2 and it’s keeping me happy. I can definitely wait out my contract to upgrade.

  • Nearmsp

    In China and India, consumers buy  un-subsidized phones and then choose a wireless provider. The result is that low end phones are also doing well. In fact locally made phones such as by Huawei and Micromax are sub $100 smart phones and in a couple of years will be making sub $50 phones. In the US most consumer only see the cash down or “free” phone and not the 2 year total cost. T-mobile has tried to educate customers through value plans but even reading the forums it is clear that most people do not get it. I think we are destined to have “free” health insurance through employers and “free” phones even as the cost pressures are in the up direction.

    • Makoute

      that’s because the value plans are too much, they need to shave a good 10 bucks or more off those plans.

  • stevejobbed

    That’s what I would say too if I worked for a company that has a hard time securing subsidies on some of the most popular devices out their for my customers. 

  • CCollision

    FWIW, phones aren’t really “subsidized”: That’s what contracts and ETF’s are for, to recoup the cost of the phone over the two years. The value plan and prepaid are cheaper for this reason.
    That said, I like how TMO has the cheaper, no “subsidy” plans for when your contract is up and you want to use your existing phone to save money, or if you buy an unlocked one online for cheaper, while other carriers just keep charging you the same high rates.

  • Wilma Flintstone

    It wouldn’t cause carriers to compete on different playing fields if Tmobile didn’t have that Weird 1700 MHz Band.  Just a thought CMO Brodman.

    It’s a double edged sword.  On one end, it’s great because not many people are hogging up that band making for faster speeds and yet at the same time, it’s bad because it causes Tmobile to lose out on quite a bit of devices due to the need for special AWS bands that not many companies will go through the trouble of doing.

  • Okay so here’s what I assume happened.

    1) T-Mobile approached Apple for a deal and T-Mobile asked Apple if they could subsidize the device less or not subsidize it at all and officially carry it.

    2) Apple said no or maybe they are thinking about it.

    3) T-Mobile now thinks they aren’t getting a deal.

    Anyways, IMHO I think that T-Mobile should have the iPhone on its portfolio because this device is VERY popular and without it, T-Mobile WILL lose customers. So dear CMO you need to just stop complaining and just subsidized the Apple device and then all your other devices you can unsubsidized them to make up for revenue.

    • Vim

      Only if the bills of non-iphone customers don’t go up as a result.  If T-Mobile has to make everyone pay more just to make iphone fans happy, than I say no deal. 

      • Guest911

        Nobody asked you.

        • Vim

          LOL! Nobody asked you either.  I have no problem with you disagreeing with me, but next time try to find something a bit more intelligent, or at least more interesting to say.

  • Richard Koliser

    The reason that you have to through away a phone every 18 months is because the stop providing security updates, doesn’t even have to be the new version but how about at least patch the holes. Think if you were still running windows 98 today…

  • bga123

    The carriers are partly to blame. I’m still perfectly happy with my dual core Amaze, but they are in the process of not only obsoleting it, but there is still no new OS refresh available or it, and when it does come it will have an older version of sense instead of 4.0. Hence, if I want the newer OS, I need to buy a new phone.

    • Vim

      Or grab an unofficial port from the XDA site…

  • shysox

    What an idiot. I bet he uses an iPhone. 

  • now_onTMO

    but unsubsidized phones are available if you opt to be off contract with a carrier right? you can choose to buy the phone itself then get a prepaid plan,right? if you can afford to ,why not..

    if you guys are’nt aware that high end phones full retail price in asia or everywhere else cost just as much or even more compared in the US.. they have post paid and pre paid plans but contract plans are not very common..  

  • Alfa95

    The value plan is GREAT!!!  It amazes me how many people come to the store and say “but I can get the iPhone 4s at AT&T for only $199 bucks and you want me to pay $599 for the Galaxy S2?”  Well let’s do some basic math, blind customer.  Let’s compare apples to apples…..3 lines unlimited talk, text and 5GB of web.  With AT&T 3 iPhone 4’s = $599.97, $349.98 a month for 24 months for service = $8399.52 so $599.97+$8399.52=$8999.49 for 24 months of service and phones with AT&T.

    With T-Mobile: 3 Galaxy S2’s = $1799.97 which of this amount only $599.97 would have to be paid upfront, the same as the iPhone’s.  $179.98 a month for 24 months of service = $4319.52. So $1799.97+$4319.52=$6119.49 for 24 months of service and phones with T-Mobile.  So we are saving you $2880 over a 2 year period and you still think that iPhone is an AWESOME deal???????? Ohhh you actually get it now and don’t think we are crooks???

    • former T-Mobile employee

      Boy, it really hurts not having the iPhone don’t it?!!  

      • Alfa95

         It hurts a little, but just because some people don’t know or even want to admit that there are phones out there that are on par or better than the iPhone.

      • well an iPod Touch costs how much nowadays? i mean its basically an iPhone 4 without the phone part that can be tethered to any wifi capable phone on Tmo

    • Agreed. Love your explanation, but of course the average customer isn’t thinking long term. They’re thinking short term, and that’s the problem.

      Customer: I don’t want to pay for X phone $359 dollars at T-Mobile, when I can get it at AT&T for $49.99!

      Basically they’re not even thinking about the 2 year contract! All they care about is getting the device cheap or free!

      What T-Mobile should do, is launch an advertizing campaign comparing T-Mobile’s 2 year long term commitment value plans, to the 2 year long term commitment plans that it’s competitors such as AT&T offer.

      Accurately show that over the 2 years of your contract, you save much more with T-Mobile than with the competitors. And also show that T-Mobile’s competitors are deceiving their customers by subsidizing the handsets and at the same time requiring that such handsets have higher rate plans.

      It won’t be easy to explain, as I can’t even explain it myself.

      • Alfa95

        True, it’s a little confusing when the customer’s mindset has always been, “what free phone am I able to get now?” but that is the sales rep job to explain it to the customer.  I’ve had customers call us thief’s, crooks, ripoff’s when they first see that they have to pay full price for the phone but then when I get 2 minutes of their time and bust out their preferred carrier of choice plan brochure and my sticky notes, compare it to our value plan over a 24 month period and show them how much extra they would pay with said carrier.  They actually put their heads down, apologize and say what a bunch of crooks the other carrier is.

        • UMA_Fan

          To put it simply to them, you should let them know what they are charged a CONTRACT.  It’s a simple: plan times 24 months plus phone cost.  That’s the deal you’re getting.

        • Alfa95

           That’s how we approach it if a customer does not get it from the beginning. The real kicker is when they look at me like they are about to pull one on me and claim that XYZ company gives them a 10-25% discount off their plan. I simply smile back, do the math and show them that even with their 25% off we are still cheaper. Plus that discount is usually off of the first 2 lines and off the main plan not features like messaging or internet which in AT&T’s case family messaging is $30 and 5GB of data is $50 per line.

  • This is why I’ll be switching in the near future *waves Tramp-Mobile goodbye and sweeps it under rug where it clearly WANTS to be* 

    • Alfa95

       Because they are actually saving people money?

      • are they? ¬_¬ 

        • UMA_Fan

          For people who can do math: Yes.

        • Alfa95

           Look at my earlier post and tell me how T-Mobile being $2880 cheaper than AT&T is not saving a customer money. Those are actual plans and prices, I didn’t just pull those out of thin air.

        • Mr_Vault

           Not sure if Jeff can do math….

    • HeLLo

       Tramp-Mobile?.I guess someone is trying to be “hood”.Why do morons like you feel the need to proclaim that you are leaving T-Mobile on this site.No one really gives a shit simple as that pay the ETF and bounce.

  • Crap

    Then they should eliminate 2 year contracts then

    • Alfa95

      The reason they have to do the 2 year contract is so that people can still put the phones in the  EIP(Equipment Installment Plan).  If you are only doing 1 line and buy the phone full price upfront you can do the Monthly 4G for the same price. $60 bucks will get you unlimited talk, text and up to 2GB of web and you don’t have to worry about paying all the federal and state taxes and fees.

      • UMA_Fan

        Plus the plan is subsidized INSTEAD of the phone.

  • Coreyp

    I would LOVE to see somebody walk into a phone store in Europe and say, “I want a FREE phone.” 

    • guchy

      that’s how it is in Europe. check your sources.

  • 123

    I don’t buy this guy’s smoke and mirrors. You guys are making a huge assumption that companies will provide low cost service to you if you give up subsidized phones. This is unlikely to happen because large companies are going to over charge you no matter what. They have to. Corporations are in it to make money (and rightfully so I might add).

    • Alfa95

       Even if you compare to T-Mobile’s own Classic plans the value plan is cheaper than the classic 8 out of 10 times. So yeah you get a discount if you don’t buy the phone subsidized on the classic plan.

      • 123

        Well, I guess I am in that rare 20% group because classic plans made more sense in my situation over the value plan since I got 3 galaxy s 2s for free. 

  • Kalel

     Brodman states, “So, it is
    unfortunate, you’ve got dual-core, multiprocessor devices with amazing
    HD screens that get thrown away at 18 months.”

    Can Brodman tell me of a single person that has thrown away a phone with a dual core processor and HD screen after 18 months?  It’s a rhetorical question, because those phones have only been available for a year or less.  It also couldn’t be a T-mobile customer, because they don’t have any phones with an HD screen. 

    • Alfa95

       He said it that way but in reality probably wanted to explain how high end devices that are actually worth something are given no value at all.  You’d be surprised how many customer we upgrade that had great devices that were the greatest and most powerful in their time come in, upgrade to a new device and simply not care about the old device.  For example, I upgraded a customer the other day that had 5 months ago received a Mytouch 4G as an alternate warranty exchange. I converted him to the value plan, put the Galaxy S2 on the EIP and when I asked him what was he planning to do with his old phone he looked at me and said “nothing, you guys recycle them or something? you want it?”  Here we had a device that used to sell for over $200 with a contract and over $450 with no contract when it first came out and this guy was ready to just give it away or throw it out for no compensation.

  • Winski

    I stick to my premise, this is the WORST MARKETING GUY IN THE HISTORY OF MANKIND.

    • guest

      Agreed, won’t even go to any more of his “All Hands” meetings!

  • nextgin

    How many people can afford to pay $500 for a handset? Not many, especially T-Mo customers. That’s why subsidies will always be necessary. There’s a huge mark up between cost of phone production, and what the suggested retail is. Cost about $150-$200 to make the phones they sell full retail for $550. Not to mention, most of T-Mobile phones are not the High-End models (One S compared to the One X). IF they want to continue with “we can compete without iPhone”, they need to have the TOP phones that aren’t iPhones, along with their Mid and Low spec devices. 

    • Kalel

       Got links for that or just pulling that out of thin air?  I’m betting thin air, because they did a teardown of the HTC Thunderbolt last year and it was $262 for the bill of materials, which means that doesn’t include manufacturing, shipping, development, warehouse, and support.  $150-$200?  I don’t think so.  Maybe for the mid-tier phones, but not the high end phones.

      • Get rid of bundling service and phones altogether. Make service compete with service and hardware compete with hardware. This will give us the best prices for both. As an example:The 32GB iPad 2 with 3G costs $336 to make (1) and the 32GB iPhone 4S costs $215 to make (2). Yet, that same iPad (unlocked) costs $729 to purchase (3) while that same iPhone (unlocked) costs $749 to purchase (4). Why does something that costs $121 less to manufacture cost $20 more to purchase? Because of the current business model in wireless means their is no free competition for phone hardware. Everything is muddled up by subsidies, contracts, and bundling. Separate the service from the hardware and let the free market work.

        (1) – http://www.isuppli.com/PublishingImages/Press%20Releases/2011-03-12_iPad2_BOM.png

        (2) – http://www.isuppli.com/Teardowns/News/Pages/iPhone-4S-Carries-BOM-of-$188,-IHS-iSuppli-Teardown-Analysis-Reveals.aspx

        (3) – http://store.apple.com/us/browse/home/shop_ipad/family/ipad/select_ipad

        (4) – http://store.apple.com/us/browse/home/shop_iphone/family/iphone/iphone4s

      • nextgin

        Actual I looked up the estimated cost of iPhone 4S ($206). What phone does T-Mobile sell that is LTE equipped? You grabbed the Thunderbolt as your attempt to sound wise? LTE adds $40 to the cost . And that’s 32GB iphone. Have any other prices?

        • Kalel

           Again, Iphone is a cheaper phone to make with the less specs and smaller screen. High end Androids cost more.  Seen an Iphone with 1GB RAM, dual core 1.5Ghz processor….no?  Your estimate is also just the parts, not everything else.  You think they just buy the parts and they magically are put together, shipped, and supported?

        • nextgin

          You want to talk to me about cost of manufacturing a product? Really? Since you want to go there, lets take it there. How much do you think it cost for labor to make ANY mobile phone? There’s a reason phones aren’t made in the USA, but by the way you’re talking, you think they are. The people at the plant aren’t making USA minimum wage Kalel. Now, like I said before, iPhone 4S 32GB $206 for the PARTS.  The workers that “magically” put it together DONT MAKE THAT MUCH IN A WEEK! So we can multiply that number by 2 and guess what? That would pretty much include ALL THE COST ASSOCIATED with the phone. Remember, this is done in BULK for a reason. Profit margins have to be kept. THEY WOULDN’T SELL A PHONE FOR $550 IF IT DIDN’T COVER THE COST OF THE PHONE. And since you think Tmobile sells a phone that cost more to make than the iPhone, name the device. A freaking Amazon Fire cost $207 for the PARTS. That $412 iPhone sells for $749 Full Retail. Take your head out of your ass, and think “Could T-Mobile afford to sell a phone for a lost or equal to TOTAL COST OF PRODUCTION”? NO YOU FOOL, they could not. SGII, HTC Amaze, at most cost $250 for the parts. You think it cost $300 for labor, packaging, and shipping? LOL, try again.

    • Rastlin001

      I agree with nextgin of Tmobile wishes to compete with the other companies that have the iPhone then they need to give is better points like the note for example or the nexus. As it stands now Att currently has not only the iPhone but alot of the top tier phones as well like the skyrocket hd and the skyrocket both with the exnos processor. If Tmobile wants to compete they need more highend phones, more variety, more stock Android phones and be the ones to push out updates (non buggy ones) faster than everyone else as well as better data rates… just sayn’

  • Johntho21

    Yea….. What about them 802,000 customers T-Mobile lost in Q3 or Q4 because of the 4S!!

    • and most of them jumped ship coz of that ATT merger not just for the 4S

      • ChadBroChillz

        I am calling BS on blaming the merger. The merger started in March 2011. In q2 they lost 50,000, which could probably be on the merger, but in q3 they gained 127,000 subs. And then in q4 they lost 800,000, which is the quarter after the iphone 4s release.  I will not say all are based on 4s, but I am willing to bet more left because of the 4s over the basically dead merger.

        • Kalel

           I’m calling  BS on the Iphone being the problem.  The execs state it was because of Iphone but internal numbers show that most of it was because of network and bad customer service, which would make sense because of the last place finish. 

    • Vim

      The iPhone was the only thing T-Mobile’s executive management could blame that didn’t reflect badly on them personally, and they knew  the tech media would eat it up without close scrutiny.  And they were absolutely right.  The truth is that the iphone was one of several reasons they lost customers, but by no means the sole or even the largest one.

      Just one example: where Verizon, AT&T and Sprint offered all their high-end phones for free on Amazon during the week of Black Friday, plus special promotions on their plan pricing, T-Mobile just sat on its rear end and did nothing.  T-Mobile seemed so certain that it was about to get swallowed by AT&T that it stopped competing. 

      They also didn’t bother to pick up any new phones after early October, allowing the other carriers to leapfrog them across all lines, even Android.

  • what an Ignorant fool, T-mobile doesn’t have a single phone that has an HD screen yet he is spamming at the mouth about how people are wanting to throw them away. I’m still waiting on a single HD screen phone on T-mobile that they have yet to be able to provide.

  • Name one phone on T-mobile that can compete with the HTC Rezound which came out month’s ago not a single phone can compete or the Galaxy note which in my Case I really want due to my huge hands. I have the Amaze 4g its a great phone and I have no intention of just throwing it away but I do have an upgrade I haven’t used in months due to all of these great phones coming out and T-mobile just skipping over the good phones for the low class phones.

    • Thomas Brezinski

      Galaxy Note is a niche market phone, there’s little point in competing with it.

      • unfortanately when your 6’5″ wear a size 14w shoe everything is pretty much a niche market from clothes to cars, I don’t know the details on what it takes to get a phone on T-mobile vs the others but I would think having something your customers actually want vs something they don’t really want isn’t good marketing.

  • me

    I’m all for no phone subsidies but then contracts have to go and plan prices need to go down. As it’s already been mentioned, a big problem is that we (customers) can’t just buy ____ phone and use it on carriers X Y and Z. Most phones are pretty much stuck on the carrier they’re sold by. Because phones need different bands, rather than producing 500K GS2 phones, we need 1/3 on T-Mo’s bands, 1/3 on AT&T’s bands, and 1/3 on Sprint’s bands – you get the point. Not the way to get a rock bottom price on handsets. At this point, I’m on my super grandfathered plan with myFaves, preferred internet, T-Zones (on another line), corp discount, loyalty credit etc.; I buy my phones outright and still come out ahead. Or I buy it on prepaid when it’s a good deal (like the Lumia for $199) and just put my regular SIM in it.

  • Lincoln131

    So he is bitching because we get new phones after 18 months, but my Mytouch4g was abandoned after 11?

    • Auser72


  • UlyssesGhost

     Wow, thinking outside of the box for a second, hmmmm, let me see, how else could people afford these phones…..  this is a real puzzler…..  they might just save money and replace their phones when they can afford it…..   no who would actually do that, everyone should have what they want immediately when they want it or it is not fair……..   they could use an installment plan and pay it off in monthly installments……   no that is far too confusing……    Gosh I cannot think of any way that most people could afford these phones without giving them away “free”.

  • Mst2910

    “yea…yea thads what we should do…get rid of substhudies on our phones”, great marketing plan there Brodman.

  • ERIK

    If us carriers wanna change the system and have consumers pay full price do this: Let us pick the phone we want at retail BUT THEN ALSO ALLOW US TO USE IT ON ANY NETWORK WE WANT WITHOUT A CONTRACT!!!! Real consumer choice and then carriers can battle on network quality & rate plans. I could take my phone to att for 3 mos then move to vrz if i werent happy with the same phone. The issue is the carriers want the locked phones and long contracts!

    • Thomas Brezinski

      Great idea if everyone used the same core network technology.  Maybe that will come with LTE, but not likely as the spectrum each carrier is using is all over the place.

      • 21stNow

        Carriers are using different frequencies for LTE, as well.

    • What he is getting at is the fact that we pay a subsidized price but we pay for it every month with bloated rate costs. By having us pay the full price of a device they could effectively lower the rate of our plans. You can find arguments on the facts and numbers doing a quick Google search but imagine if you paid $500 instead of $200 for your device up front (independent of upgrades) but your montly bill went down from $70 (average, minutes + web) to around $30. Your yearly cost goes down almost $500 which is a yearly savings of $200 just because you paid more up front. What’s more, you can keep that device and keep the low rate next year, meaning you save $500 the next year.

      Its truth, not just rumor, that carriers recoup the money off the subsizied device pricing with their rates. I wont defend that fact here, you can look it up for yourself.

      • Vim

        Overall I agree with your point, nevertheless…

        The rate plan difference is much less than $40/month per line.  For minutes+web it’s only about $10/month or $220 total over the 22 months until you can get your next subsidized phone. Throw in text and the difference increases to $15/month or $330 over that same 22 months. Then consider the fact that on a normal day the subsidy for a high end phone like the Galaxy S2 or the Amaze is about $300.  So the subsidized plans aren’t really that inflated, especially if you get a new high-end phone every 22 months. If you don’t want to pay for text messaging, you can even come out ahead.

        Where the Value plan shines is if you don’t want a high end phone or if you keep your phone longer than 22 months. 

    • Zeromsi

      With T-Mobile, you can choose which phone you’d want to use. you don’t have to buy from t-mobile nor a t-mobile branded phone. i’ve been using the iphone on t-mobile since the original in 2007. i went thru all iphone models except the 4s. do some research before you freak out.

  • Auser72

    He should be fired for incompetence. Never heard a representative of a company come up with a strategy, for their customers to buy less of a product that they are selling.

    • Tbyrne

      I agree. Why are all these people in power so clueless? They live in an imaginary world very different than the average working mans. I agree with the others in here. He needs to step down.

    • Makoute

      They are not really selling phones, HTC, Nokia, Samsung sell phones.

  • Tward291

    if they do go to a all value plan system and get rid of subsidies they would have to change the contract lenght have a 1 year and 2 year or go by months

    • Moth477

      How about no contract. Subsidies are there to lure us to sign contracts. Therefore eliminating subsidies then no contract.

      • 21stNow

         So how do you explain the current Value plans?

        • Spanky

          I would never sign up for a Value plan. I just don’t see the reasoning behind signing up for a two year contract without a subsidy.

        • Alfa95

          Because it’s for the people that want to take advantage of the installment plan. If you buy any phone full price, just put it on the no contract $60 dollar unlimited talk, text 2GB web.

  • Ex TMO EMP

    Here is what the real situation is.  This is an Exec that has a 6-figure salary like all the TMobile Upper management makes.  They are all thinking with “their” income levels and NOT of the Consumer income levels. They all need to stop this “We have the best Android handsets…blah blah blah” that we all hear in every meeting.  Yes… YOU may like the Android, but YOU are forgetting what our customers want!  NOT what YOU want Executive team!  This is one of the many reasons why subscribers are leaving.  DT needs to do some “house cleaning” with this old style mentality.  Put the price plans back to where a 3rd grader could understand what the plan is.  Thank you

    • Tbyrne

      Great post! Thank you.

  • he does have a point. poor people living paycheck to paycheck which is alot these days will always go with the subsidy. i also think its true about them getting thrown away in like 18 months. Personally i dont make alot of money but i only buy flagships and off contract and i cherish the crap out of them i never throw them away unless they no longer work

    • Toffer_Lloyd

       Poor people living paycheck to paycheck are exactly the people who SHOULDN’T be choosing the more expensive option (subsidized phone w/ more expensive rate). This is exactly why most of them are poor, becasue they make poor decisions.

      • Tward291

        i would be carefully when treading those grounds

        • Toffer_Lloyd

           Not sure what you’re implying. I’m giving honest advice for people to save money and I think it’s sad that people are so short sighted when they could save hundreds of dollars by going with a value plan.

    • jdubtrey

      The interim approach would be to 1) lower monthly prices to reflect no subsidy and 2) to allow them to pay back the phone price per month until it’s paid off (after around 20 months). From month 21 on, their monthly rate would drop about 10-15 bucks rather than staying flat like it is now.

      I think TMo used to do this with that set of post-paid no contract plans they had.

  • Freak4Dell

    He’s right about not being able to do it by himself. T-Mobile has enough stigmas going against it, and adding what most consumers would perceive to be high device prices would just make things worse.

    Getting rid of subsidies would solve so many issues in this country’s wireless industry. Imagine…service providers could actually compete on – gasp – service, rather than slight variations in hardware that they pretend are exclusive to their network.

  • “…but it has become kind of throw away”
    Sounds like he’s blaming the consumer.  Here’s a good question for him, how many phones has he had in the last 4 years?  Ask that of ANY Tmobile employee.

    • Employee

      Ive had lots. but theyre not throw away. just resold to someone else.

      • Alfa95

        Mmmmm, you mean just left it in a drawer somewhere right?? ;)

  • antoine harrison

    he does have a great point in what he is saying but in order for tmobile to compete with the big dogs they have gotta get big dog material such as better phones until then its the same ol same ol with them. 

  • BahamasGeek242

    I just think its too late now for a carrier to changed the model and have consumers pay full retail on a new phone.  Tmobile has one high end phone the SGSII   when the other 3 major carriers has 4 to 6 high end phones.  I still cant believe T-mobile was not even considered for the the latest nexus phone,  T-mobile was the ONLY carrier willing to try Android when Google was shopping it and now we cant even get an exclusive hell we cant get the phone at all.   

    Please dont say buy an Unlcoked phone and use it on T-mobile it,   WHY because it should work on T-mobile HSPA+ but it will not only T-mobile 3g   

    • 3560freak

      1st, the HTC Amaze has the exact same spces as the GS2 (except they traded out the SuperAMOLED for a higher resolution S-LCD) and 2nd the Unlocked Galaxy Nexus runs on HSPA+ (21Mbps) which is what most of T-mobile’s 4G devices run on.  Get you facts straight, especially if you are going to use the word geek in your screen name

      • BahamasGeek242

        Well I have seen speed test here in Portland from a T-mobile Rep who has an unlocked Nexus and he never gets above 5Mbps and those and there a countless video speeds test on youtube from New York to L.A. to Chicago and its the same so those speeds are 3g not 4g by t-mobile standards. Show me a video of the new nexus phone getting double digits on a speed test on T-mobile network please do. Yes you are right about the Amaze I forgot T-mobile had the HTC amaze. I really don’t want to argue I just wish T-mobile had a better high-end phone line up 2 phones is not enough

        • Spanky

          Nonsense. I’ve gotten as high as 14.5 Mbps downstream on my GNex in some parts of Manhattan. If only I could get those speeds in my neighborhood…

        • BahamasGeek242

          Show the video even Engadget couldn’t get passed 5Mbs in NYC with the new nexus on Tmobile unlocked

          Sent from my Windows Phone

        • Zeromsi

          You’re on a windows phone. You’re not really into powerhouse devices.

          Anyways, you’d be a fool to expect to get the highest bandwidth from any service other than landline.

        • BahamasGeek242

          I am now because OEMs who make android phones don’t support their phones well and my windows phones runs a lot better than my G2x ever did and my HTC mytouch 4g and it has half the specs both of those did.

        • JBLmobileG1

          I pulled close to 12Mbps down near downtown Las Vegas Nevada on my HTC Amaze. Not too shabby… I wish I could do that everywhere I go. Regardless I still find the data speed on this phone fast. The test for me will be when I go back to visit family and see how it holds up.

  • Angeldevil75

    well he need to see spirnt  updgrades with loyal news and loyal customers  LOL

    • Tbyrne

      C’mon angel! You can do it. One more try.

  • LMFAOOO not trying to be “hood”. What does being “hood” or your poorly and also subtle racist views of my opinion have to do with anything? Find a life, please. 

  • 3560freak

    I thought that it was just the Sensation that wasn’t getting Sense 4

  • dkupp777

    How about starting with getting some Motorola Droids? That would be a step in the right direction. I’ve been a TMo customer for a while and have been very disappointed. Unfortunately, am paying for the family of 4 plan which would double my phone bill if I migrated over to ATT or Verizon

    • Zeromsi

      “droid” is a verizon marketing term for Android which is on all carriers. Motorola makes shit phones. way to be a foolish consumer and believe the commercials as fact. Samsung and HTC make the most powerful Android phones. T-Mobile’s got the Galaxy S ii and the Amaze. they will also get the One S. So pay more attention and learn instead of being ingnorant.

  • 123

    I don’t buy this guy’s smoke and mirrors. You guys are making a huge assumption that companies will provide low cost service to you if you give up subsidized phones. This is unlikely to happen because large companies are going to over charge you no matter what. They have to. Corporations are in it to make money (and rightfully so I might add).

  • Red6170

    AT&T’s iPhone 4 just got an update and they now have 4g. We still stuck on “g”. Some people say T-mobile is wrecking the ship because they want out of the water. They also think that iPhone will fall out of favor so they are waiting till it is not hot anymore so they can come and say that they never needed Apple. Once my contract is up my family and I are considering switching carriers. We r willing to pay more so we can use the phone we want, even if it is inferior to a hand full of other devices.

    • ATT4G

       You do realize that “4G” icon is cosmetic right? The iPhones aren’t getting any faster speeds.

    • Jobless Steve

      Whatever dude. The Apple Sheeple have taken over.

    • Tward291

      lol att iphone is not 4g the update just shows the toggle for data if you go on phonearean they talk about this

  • Ken Sze

    in counties like Hong Kong if you sign up for a 2 yr contract pretty much all their phones are free. But if  you just go with the no contract then you will have to pay for the phone full price. The funny thing is you can pretty much find cell phones everywhere at full price but at different prices one store can be different than the store next door. 

  • Concerned

    1) Having a handful of phones that do one or two things better than the iPhone is not the same as having something better than the the iPhone. In the same way that me having eggs, milk, flour and sugar doesn’t mean I have a cookie. Integration, it’s a handy word to have in your vocabulary.
    2) Yes, getting rid of the subsidy cost that carriers pay up-front for their customers would be a boon to the industry. Carriers wouldn’t be silently loaning out hundreds of dollars for every new line. However, for those of you that think they would actually use this to pass the savings on to customers, I cannot fathom where this idea comes from. Look at their value plans, this is just another argument for having your cake, eating it too and getting the customer to foot the bill.

    Either this man is clueless or he genuinely thinks his customers are, and I’m not sure which is worse.

    • 123

      #2 is so very true. It is exactly what I have mentioned below. Corporations are in it to make money…not save you money on your bill. If you are thinking otherwise, then you are sorely mistaken. 

    • Dwoodsz79

       $59.99 unlimited talk text and data on the value plan is a good deal. I think t-mobile did pass along the savings to the customers. Thats the best deal I find on of all the carriers.

      • Concerned

        Oh, I agree it’s cheaper than other options, obviously 59.99 is cheaper than 79.99. My point is that they make the plan roughly ten dollars less per month when compared to the classic plans, and you pay for the phone in full at twenty a month, so they still make 10 more per month as if they were subsidizing the phone. Have cake, eat it, too.

    • 567

      1) Well, one can always make it that having eggs, milk, but no flour will never make a cookie.  Both iPhone and Android phones have their features integrated.  Just that expanding features on the iPhone would require Apple’s approval.

      2) The point is manufacturers make phones that are compatible with all carriers.  That will almost guarantee the saving is passed down to consumers.  In fact, probably more than just these savings would be passed to the consumers.  Right now carriers demand phone makers to make special phones for them so the phones are locked down to only work with their network.  Look at the rest of the world, for example, Samsung Galaxy S II is just Samsung Galaxy S II, there are no variants because there is no need for it.  They are designed to work everywhere for every network.

      • Concerned

        1) And features on HTC/Samsung phones don’t need their approval?! False premise is false. You can try to complain about the iPhone being locked down if you’d like, but the fact is that even with it being locked down the ecosystem is leaps and bounds ahead of the “play store” and the camera/specs/features are all on par with bleeding edge android phones before they are a twinkle in the OEM’s eye. The iPhone is the gold standard for a reason. Android has the potential to be better, but as long as they keep leaving it in the hands of HTC/Sammy, they’re screwed. Don’t get me started on how Android has crippled itself…
        2) Okay, you buy a samsung galaxy s 9x for 499.99 from the OEM, then you turn around and pay your carrier the same as you did when they were subsidizing your phone, let’s call it 70 a month. Where is the savings? 199.99+70/month is still less than 499.99+70/month. Looks to me like you paid 300 than you would have under the current system. Meanwhile the carrier makes 300 more off of you during your (now entirely unjustified) contract. If you really think that rate plans would drop by twenty dollars plus each month if subsidies were to disappear, I have bad news for you, they won’t. Carriers do not see this as a place to save you money, they view it as potential margin, and they salivate over it.

  • the one thing to take away from this is that we as consumers continue to get screwed by greedy companies .. they could get rid of subsidies if they wanted to but none of them do (well i guess TMO does) … consumers need to vote with their wallets and maybe then the mobile industry and its ridiculous contract commitments etc will change.

    • Vim

      Subsidies give Verizon and AT&T a competitive advantage since they can place larger orders and thus get the phones for a little cheaper.  Spread across a hundred million phones that adds up to a higher profit margin. They’re not going to give up that advantage so that T-Mobile, Sprint and the smaller regional carriers can have an even playing field.

  • I agree totally and I’m voting with my wallet. The last time I bought a subsidized phone, Android and iPhone didn’t exist. So naturally I haven’t had a contract in years either. I go with whoever gives me the service that suits my needs best for the least money.

  • stevejobbed

    What he fails to realize is that those subsidies (and the contracts they require) are what has kept T-Mobile afloat during the last year. T-Mobile lost over 800,000 customer last quarter. How many more would they have lost if not for the fact that many people either didn’t want to or couldn’t afford the contract buyout?
    The people that can afford to buy a phone outright most likely aren’t the type of “value customers” that tmobile caters to. If I buy a 3000.00 computer, I am not going to skimp on DSL internet, I will pay more for for a faster cable connection. If someone is going to pay 5-600.00 for a high end smart phone, they will most likely go to the company that provides the best coverage overall, aka not T-Mobile.

    • Sgit

      Wrong. I buy phones upfront to save more in the long run and stick to T-Mobile. People are just stupid and can’t think sown the line.

  • Bratty

    You are correct. Its ATT fooling its customers. But in fairness, the iPhones speeds are what TMo calls 4G too. Its a big giant foolfest!

  • It’s an idea, but I don’t think it will work.  Consumers have gotten too used to the subsidized sales model even though they really don’t realize that you’re paying a subsidized rate even after you complete the terms of your agreement.  T-Mobile had a great idea to offer the same basic service at $10 less per month if you didn’t get a subsidy on your phone and still made generous offers to pay the cost of a new handset over time with no extra cost.  Unfortunately people don’t look very far ahead and only see that if they get a subsidy for two years the device will only cost them $200 or $300 instead of the up front cost of $500 or $700.  If the business model of mobile providers had developed differently it might be possible that operators didn’t have to offer big subsidies to attract subscribers.

    • Makoute

      They should’ve had the plans for 15 less or more, then we would be talking, it was still a good idea though, I still have my EM+ plan.

      •  I believe it is $20 less. Or the plan I have on my EM+ plan is compared to the contract plan.

        My Uncle just switched from T-mo to Sprint because my cousin wanted a new phone and he couldn’t understand the concept of it still being cheaper when paying the phone full price, spread over 20 months. Now they are on 4 person family plan. They were only paying $180 on T-mo. Now depending on plan they are paying like $240 or $180 ish with less minutes. They got 2 “free” Nexus S a $200 iPhone 4S and a Free Sanyo. They could have just added about $15 a month to their bill for 2 phones on T-mobile. My one cousin and Uncle were the only ones that wanted/needed new phones. The other 2 lines had a basic and HD7. $210 with unlimited minutes/messages/2gb data each for 20 months or $240 unlimited everything for ever including a 2 yr contract and still paying $200 for a phone. Hmmm. I know what I would have done. 

        I hope Sprint treats them well.

  • Makoute

    It needs better pricing.

  • Squish37

    If I could take my phone to ANY carrier it would be well worth the non subsidized price! When I buy a computer and have AT&T cable I don’t have to buy a new computer to switch to comcast cable! Also, he says due to subsidized phones people think of them as being throw away phones after 18 months. Besides the fact technology is changing so rapidly the phones are often obsolete after 18-24 months they also usually don’t last any longer than that. I have bought several phones at non subsidized price and I always take VERY good care of my handset yet most of them only lasted about 2yrs! I don’t really have a problem with the cost of the phones but they should be made in the USA just like they are in Europe. Almost ANY phone will work with ANY carrier in ANY European country. Now that would make your phone worth more in my opinion!

  • Please excuse my grammar, for my laziness has prevailed LOL

    T-Mobile fails to realize is that people will ALWAYS choose the cheaper or the most desirable phone option up front. Why goto T-Mobile who has severely spotty coverage overall compared to AT&T and Verizon and Pay $599 for the Galaxy S4 or $699 HTC Phoenix (yea i made those up) when the competition has them for $99-$200 on contract. T-Mobile’s people keep saying “oh we are cheaper than verizon and att”, but honestly, You judge a network on its coverage, not how cheap it is and tmobile is terrible with that. yes you pay 59.99 for service but whats the point of having a Galaxy S3 4G on T-Mobile but are stuck in 3 bars of GPRS/Edge when the Competition both have 3.5G pushing out 13 Mbit/sec where you use it at. 
    The Moral of this story is,You get what you pay for.. simply undercutting the competition and calling a gang of mid range android phones except the Amaze, Sensation, and Galaxy S2 better than the iPhone is Stupidity. T-Mobile is hemorrhaging 800,000 subscribers a quarter for a reason. They dont get it. 

    P.S, im debating on ditching AT&T (dropped call capital of the world) to get a Verizon iPhone 5 depending on its specs or coming back to T-Mobile to get the most powerful phone when i get out of basic training for the Army. I would be pleased as punch to pay a lil’ extra for Verizon since ive had the service before because of my job now but if the iPhone 5 ends up like the 4s, ill stick with android with T-Mobile. Luckily, the Town where Fort Gordon is, Augusta, GA, is both a Verizon 4G LTE and a T-Mobile HSPA+ 42 Mbit/sec location. 

  • Newrpsmngr

    too many options for the customer is not good….and we the sales force have to talk in circles for 30 minutes explaining the value plan to the customer.  I honestly pull out the classic plan price and give the customer the discounted phone cost instead of resorting to showing the customer a lower rate plan….there are several posts on here mentioning that we are a company in business to make money everyone is right.. i am done showing the customer the “value” of a lower rate plan with subsidized phone.

    we need to go back to having one type of rate plan.  classic plan!! the prices are in tune with the other big 3..$87.99 unlimited talk, text, 2gb web and handset protection and offer a discount on phone.

    also keep the monthly 4g pre paid and eliminate the value plan…make the shopping experience easy enough a 5 yr old can understand it.

    • Vim

      I agree with 90% of what you say.  Americans have been trained to -expect- subsidized phones by the other carriers.  Pushing the Value plan is like trying to row up river.  It would be so much easier to sell the Classic plan, especially if T-Mobile started running promotions on it again just like in the past.  The Value plan however should not be eliminated, just de-emphasized.  It should be quietly kept around for those who want to bring their own phones, regardless of whether those phones are iPhones, the Lumia 900, or someone’s old flip phone from 5 years ago.

  • wsj

    I guess that when you do not sell the phone that customers want (iPhone)  all you can do is push the product you ended up with because of poor management decisions and then blame another company (Apple) because you cannot compete because of your poor management skills.  And yes, I would pay $600 for an unlocked iPhone that works on TM at something other then Edge.  Why because Apple has more apps that I want and would use, and until the marketplace has as the same and as many as Apple, droids are still just second place phones no matter what their tech specs are.

    • I disagree, The Android platform allows the owner to flash any Rom they want to do anything they want. I have ICS downloaded on my SGS2 with free tethering. Blows away any Apple phone with their 3.4 inch screen and clocked down processors. Apple’s new I-Phone with it’s small screen and clocked down processor is still having issues with battery, I know my wife has one. Android has tons of Apps and getting more every day, how many freaken apps do you need? I have flashed 3 different ICS roms over the last two weeks, love it, try that on the I-Phone, you can’t. Everything about the Apple platform just sucks IMO, locked down crap made for little kids who need to be told what, when and how to do it. I will keep my Android device. The I-Phone looks nice but just don’t drop it or you will be paying big bucks to get it fixed. Made of glass, just what they had planned.

  • Blah

    I am a TMobile customer, eager for a new Windows phone.

    I’m trying to figure out why I should stay with TMobile, when I can only get a Nokia 710.

    If I switch to AT&T, for $50 more phone cost, I can get a Nokia 900!!!!
    Which is DRASTICALLY superior to the Nokia 710.

    Tmobile, throw me a bone, give me hope better Nokia phones are coming soon, or I am gone.
    And I’m not the only one…

  • WirelessRefugee

    Fact is, handset subsidies are a big drain on company profits and carriers look with envy at prepaids selling high end smartphones at cost or implementing BYOPEAI* programs, then raking in the profits on high volume sales of $45 to $60 unlimited plans. 

    Is there a TMoNews pool I can enter, on the month and year that it will be published there’s more prepaid customers in the U.S.than there are post-paid 24 month contracts? I say that point will be reached by January 2014.

    * Bring Your Own Phone Even Any iPhone

  • WirelessRefugee

    Ah yes, hope springs eternal for the “iPhone is coming to T-Mobile ” crowd. The iPhone just won’t die in the TMoNews
    comments section. What has it been now, 3+ years of people saying “the
    iPhone is coming to T-Mobile,” “I have it on good authority the
    iPhone will debut in March 2010.” Well let’s talk facts instead of fantasy.
    Sprint had to pay Apple $15 billion over four years to get
    the iPhone. Sprint (and Verizon) absorb a $400 loss per sale of the iPhone due
    to the subsidy structure with Apple, where the carrier pays Apple $600 for
    the phone, but on a two-year deal sells it to the customer for $200.  These numbers change a little depending on times and the particulars of dealings between Apple and the carrier, but for now assume these figures.

    While that sounds like a big hit to a carrier’s financials, remember that carriers get the $400 back, in addition to significant additional
    profits on the 24 month contract. For example, assume the average iPhone purchaser spends
    $2000 for the iPhone and to use it for 24 months, $1600 cash flow and net profits stemming from that are respectable numbers in any industry. To be sure, 10 to 15 percent net income is decent for most businesses.

    The trouble for T-Mobile is that it does not have the kind of cash needed to
    make a deal similar to what Apple required of Sprint. And T-Mobile’s future is on financially
    shaking ground, so much so, I don’t think Apple is going to make a $10 to $15 billion deal with

    Get the money from Deutsche Telekom, you say. Nope, that won’t work. Recall
    that the parent has said “no money for you child, you have to make it on
    your own.” So any iPhone deal would have to be worked out between T-Mobile
    US and Apple. Do you start seeing why I say a T-Mobile U.S. iPhone is a pipe dream?

    And then there’s the “other problems.”

    I continue to say that the problem Apple does
    not trust T-Mobile. Apple knows T-Mobile does not have the money to be cutting
    billion dollar deals, so even if T-Mobile said “let’s do a deal” Apple probably thinks it might not ever see all its money.

    Apple does not cut deals with companies who exhibit instability. Companies such as T-Mobile, who was on the chopping block for most of 2011, and whose business is in the decline,
    hemorrhaging customers and profits.


    Moreover, and I know TMoNewsers don’t want to hear this, but
    my understanding is that T-Mobile is going for becoming known as the value 4G carrier.
    That conflicts with Apple’s philosophy, and public’s perception of what Apple is
    all about. Apple’s heavily marketed raison d’être is not profits, but grooming and maintaining the public’s perception that Apple is dedicated to producing products that improve the user experience, make people feel good, and instill pride in becoming life-long Apple customers.

    • Tbyrne

      Well stated. You can leave now.

    • Vim

      I agree with a lot of what you say, but I disagree that T-Mobile is in worse shape than Sprint.   T-Mobile is profitable while Sprint is taking on debt like the Titanic did water.   While the significant loss of customers in the last quarter was highly embarrassing for T-Mobile, and a sign of bad management, it wasn’t life-threatening.  On the other hand, if Sprint doesn’t right it’s ship relatively soon, it won’t be around in a few years.

      T-Mobile US’s biggest problem is that its parent company has been busy taking its profits and spending them in Europe for the past few years, leaving it with little left to reinvest in itself.  T-Mobile US is like a neglected, malnourished elder daughter who is worked to the bone to help her self-centered parent get ahead in life only to be sold away to a rich, uncaring husband before her looks disappear entirely.  Now that the marriage has fallen through, her father is grudgingly feeding her again.  But will he feed her enough for her to thrive?   or only just enough to keep her from dying of starvation until he can find another suitor?

    • Shoeless

      wow, i have to say that’s one of the most intelligent replies i’ve ever read on this site. not much competition, i know, but still…

      my only question is, didn’t t-mobile get a bunch of cash when the at&t acquisition didn’t go through? or is that money going to DT? 

      i guess the thing i really hate about the whole iphone issue is i wish that t-mobile wold just come out and say, it ain’t happening, and really focus on making a great android experience (and i’m a nothing-but-apple guy!) instead being so wishy-washy, saying ‘we’d like the iphone,’ or ‘we have a million iphone users,’ ‘here, use your iphone on our network, that’s OK with us.’ Just say hey, it’s not here, it won’t be here and if you’re hoping for it here you may as well look elsewhere.  Ya know, don’t pee on my head and tell me it’s raining. Or maybe T-mobile just hopes to hold on to the customers who want iphones by fueling the rumors that it’ll come to them … some day. I am an apple guy, but i can even see how android fans would get annoyed by the endless speculation.

      This whole thing is starting to sound like a cellular phone version of Waiting for Godot. 

  • it seems to me that everyone issue with Tmobile is that they dont and prolly wont ever get any better as it relates to there phones. Ive been with Tmobile for 10 years now and I just keep holding on thinking that they are going to get some really good Android phones and in reality they wont. At the end of the day having really nice phones makes a big deal to me. I was hoping that Tmobile would get the Galaxy Note but thats not gonna happen. If any of you guys notice this the biggest problem that customers with Tmobile have is that they dont get good phones. I have been doing the month to month thing with tmobile since December and I wont renew my contract unless they get some good phones this year or else Im rolling out to At&t or the big V. 

  • GinaDee

    Once again T-Mobile executive management out of touch with the American consumer

    • On that note I disagree, subsidies have ruined the industry. They should be done with.

  • ESH

    I agree with the CEO on this one for high end phones like the iphone and top of the line Android phones. I would rather pay for a fantastic wireless service that work with a large number of phones that the customer can pick up a phone they want from an independent phone store
    Phones might even be cheaper

    One has to ask how much did AT&T pay to Apple to carry the Iphone, when the company could money to build out their network?

  • Gouv

    Why would they get rid of them if it’s working fine for them????  It’s a money game and I know for damn sure if T-Mobile wasn’t in the disadvantaged position they are in than this guy would be singing a very different tune.  Yeah subsidies have a tendency to suck, but they fit well with the current business and profit model.  As far as i’m concerned the other 3 shouldn’t have to play along with t-mobile, T-Mobile should have been playing the game right all along and not gotten themselves into such a pickle where they have to be overly experimental with what they do to remain profitable.  Once again, T-Mobile is suffering because of poor management.  According to what tmo management probably thinks, those successful competing companies are clearly wrong and should adapt t-mo’s way of thinking.  Because obviously tmo knows whats best for the entire industry and has done so incredibly well with how they do things….  Every other carrier should just model their entire strategy and business plan after tmo’s.  

    It’s clearly not that tmobile is devalued… nope can’t be…. it must be the hardware and those damn subsidies lol….. These tmo guys crack me up sometimes!!  It’s like they deflect the underlying blame of tmobiles problems on unfair competition in some way, shape, and/or form.    Truth is, had they just been a bit more tactful a few years ago than they would have had more muscle to influence such things they complain about now such as subisides.  They could have had the iPhone, better and more spectrum than the current aws they have, and grown past the 50 million mark.  Instead they promise big, make comments like these to stir the pot, and usually end up doing less than expected.

  • Porky

    If all carriers did away with subsidized phones, then tmo would probably suffer the most. By that time, people would just go to vzn because people are willing to pay a little more for better coverage. There would be little to no incentive for people to stay on tmobile…except for pricing. But this strategy has proven time and time again that it doesn’t work. Tmo’s lower pricing has yet to make a dent in the other big 3.

  • Scoop

    I signed up for the value plan a few months back, switched from verizon since I was out of contract for over a year. I now get 2 android phones, unlimited data, unlimited text, and 1000 minutes for less (including the monthly interest free financing of my phones) than I received 700 minutes and text – no data – from verizon. And I get unlimited wifi calling and data. I haven’t had an issue with coverage. I’m all for unbundling the data from the price of the phone. Let me see what I’m REALLY paying for my phone, and for my service. And once my phones are paid off (interest free) I’ll be paying $35 a month per line for 1000 minutes and unlimted texting and data. I won’t be paying an inflated monthly rate just because I initially subsidized my phone.

  • wytwolfen

    I get the feeling there are a lot of us out here who wouldn’t mind buying phones retail if they got supported after the fact.  I just put ICS Passion Rom on my Vibrant, the one I haven’t been using for awhile and it looks and runs great – no gps – but that never worked anyway.  Still, I’d probably be happy with it if Samsung/T-Mobile updated it in a timely manner.