Kevin Fitchard of GigaOm:
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.
I, for one, really really really hopes this works. But my guess is that it won’t. Customers absolutely should be fine with paying more upfront in order to save a ton in the long run, but it never works that way. Instant gratification, and all that.
The finance part of the equation is certainly a wild-card, but that sounds awfully convoluted. My only hope is that it’s only slightly more convoluted than a two-year carrier contract. Also, that T-Mobile can get its head out of its ass and launches an LTE network sometime this decade.