T-Mobile To Start Selling The iPhone 5 On April 12th For $99

Posted Mar 26, 2013

The iPhone 5 has finally arrived on T-Mobile USA.  The iPhone 5 will be available on T-Mobile starting on April 12th for a price of $99 without a contract.  The iPhone 5 will be compatible with T-Mobile’s LTE network, which is launching in 7 cities today.  When speaking to a crowd at the Uncarrier event in New York City, T-Mobile USA president and CEO John Legere said ?This is an important day for people who love their iPhone but can?t stand the pain other carriers put them through to own one.?

?We feel their pain. I?ve felt the pain. So we?re rewriting the rules of wireless to provide a radically simple, affordable iPhone 5 experience ? on an extremely powerful network,? Legere added.

Ever since the iPhone 4S arrived on Sprint in 2011, T-Mobile has been the only major U.S. carrier without the iPhone.  T-Mobile customers can buy the iPhone 5 for $99 up front and $20 per month over the course of 24 months to cover the cost of the subsidy.  On T-Mobile’s base plan, the total cost of the iPhone and contract over 2 years is around $1,780.  According to Geek.com, this is slightly lower than the base plan on Verizon at roughly $1,822 and much lower than the cheapest plan on Sprint at $2,307.

T-Mobile’s offers unlimited 4G access starting at $50 and it can go as high as about $110 per month in cost.  The $50 plan will get you 500MB of 4G data and then the 2G speeds will kick in.  T-Mobile is also offering the iPhone 4S at a price of $69 and the iPhone 4 at $15 with similar terms.  The 7 cities that T-Mobile has launched their 4G network include Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose and Washington D.C.

There is a rumor that T-Mobile will keep the iPhone 5 locked until the phone is paid off or traded back as a way to keep their customers engaged on their network. This type of plan is unconventional compared to what all of the other telecommunication companies are doing. If a consumer leaves T-Mobile early, then they could be hit with a fine that is larger than traditional early termination fees (ETFs). We’ll see how this strategy works out for T-Mobile in the next earnings call.