T-Mobile USA announced that it is no longer selling or offering cellphone contracts. It’s basically doing away with them to try to remain competitive after loosing a lot of market share over the past few years. As a distant fourth-place carrier among the main players, the company has been willing to demonstrate more aggressiveness in turning around its subscriber losses.
Customers still don’t have to buy a phone and pay for it in full first. Instead of a contract subsidy to get a new phone, customers pay an additional amount on top of your phone bill each month to pay off their new smartphone. But unlike the higher monthly fees you would normally pay a carrier under a contract, the fees stop once you pay off the phone.
T-Mobile is also expected to eventually offer the iPhone, which would quell the complaint that T-Mobile lacks all of the top-end smartphones compared to it’s competitors offerings. The shift toward life in the prepaid lane is also moving forward on the business side, as its planned merger with MetroPCS last week cleared its final regulatory hurdle and now awaits just shareholder approval.