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It’s official: T-Mobile has the iPhone.(s AAPL) On Friday, April 12, the magenta-tinged operator will start selling the iPhone 5 nationwide and the iPhone 4 and 4S in select markets.
T-Mobile now not only has the iconic device it has so long craved, but it’s offering it with compelling service pricing. Under the new plans unveiled over the weekend you can pay as little as $50 a month for unlimited voice, text and 500 MB of data, and you can use your phone as a hotspot — something most carriers charge you extra for doing on an individual data plan. For $70 a month, you can upgrade that data plan to unlimited, though hotspot usage is limited to 500 MB a month. All of these plans are available without a contract.
But T-Mobile is demanding you make a tradeoff. Its cheap rates mean it will no longer subsidize its devices, meaning customers will have to buy their iPhones up front, enroll in a financing plan, or bring an unlocked device to the network.
“We’re canceling our membership in the carrier club,” CEO John Legere said at T-Mobile’s Uncarrier event in NYC on Tuesday.
T-Mobile will finance the iPhone 5 for a down payment of $99.99 and payments of $20 each month for 24 months. That works out to $580, which is actually cheaper than the unsubsidized, unlocked device price of $650 Apple charges today. The iPhone 4S will have a down payment of $69.99 with monthly payments of $20, which works out to $550 (the same price Apple charges). The iPhone 4 costs $14.99 down with $15 monthly payments, which totals $375, a full $75 cheaper than the unsubsidized equivalent. You can also bring an unlocked iPhone to the T-Mobile network to avoid financing costs completely, though only AT&T’s iPhone 5 version will work on T-Mobile’s new LTE network.
T-Mobile also revealed it will be the first U.S. carrier to support HD voice on the iPhone through its newly upgraded networks.
The reason we’ve waited so long for the elusive T-Mobile iPhone is a combination of physics and economics. Since T-Mobile first launched its 3G mobile broadband network, it’s set itself apart from the other major carriers on the electromagnetic spectrum. Apple didn’t make an iPhone that tapped into the Advanced Wireless Services (AWS) band used by T-Mo’s HSPA+ network, and it showed no inclination of custom-designing a device for a specific carrier.
That all changed last year when T-Mobile undertook an ambitious plan to reconfigure its networks and clear up spectrum for LTE. It began moving its HSPA+ network into the 1900 MHz PCS bands used by most U.S. carriers for 3G, and in the gaps that opened up it began deploying its LTE systems.
Last summer, T-Mobile began inviting unlocked iPhone users to test out its network, but it hadn’t reached the point where it could support all of the new iPhone 5’s most advanced features. The missing component was LTE, which T-Mobile launched today in an iPhone-friendly band.
Will the iPhone be T-Mobile’s savior? It’s tough to say. T-Mobile will finally have the most sought-after smartphone in its arsenal, and T-Mobile has readily admitted its lack of the device has hurt it with consumers. It will also be able to offer that device at very low pricing. But pricing and variety don’t always sway consumers. Verizon Wireless(s vz)(s vod) may be the most expensive carrier in the business, but its coverage and customer service have kept it on top of the heap.
This post was updated several times throughout the morning as events unfolded.