T-Mobile CEO confirms the iPhone and the death of phone subsidies

T-Mobile is eliminating all device subsidies in 2013, requiring new customers to pay full price for their phones up front, buy it on installment or bring their own unlocked devices, Legere said speaking at corporate parent Deutsche Telekom’s Capital Markets Day in Bonn.

T-Mobile will shift entirely to its unsubsidized Value Plans, which offer customers far cheaper rates for voice and particular data. Traditionally carriers factor subsidies into their normal contracts rates – basically you’re paying a mortgage on your phone. With the Value program, T-Mobile is keeping the contract, but passing what it saves on subsidies back to consumer.

Sky has never bought you a TV set. The subsidy has always been a burden, justifying lock-in contract periods. The era of opportunistic cellco choice on the fly for best bargain data bundles gets closer.

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