Although Apple’s iPhone 5(s aapl) was a spotlight hero at T-Mobile’s “UnCarrier” press event on Tuesday, a rival phone was also announced. On May 1, T-Mobile will begin selling the Samsung Galaxy S 4, which will support the carrier’s brand new LTE network, falling back to HSPA+ 42 speeds when required. With other carriers widely expected to debut their Galaxy S 4 for at least $199 with contract, might T-Mobile’s contract-free approach along with a $99 up-front payment be more appealing?
Indeed, T-Mobile is using a similar pricing model for the iPhone 5: Customers pay $99 for the handset and tack on $20 per month to their bill to pay off the handset over 24 months. Even if the T-Mobile consumers opt for the most expensive Simple Choice plan — $70 for unlimited talk, text and mobile web — the interest-free hardware payment plan keeps the bill to a manageable $90 or so per month.
I suspect customers in the first seven official T-Mobile LTE service areas will initially be more apt to choose the T-Mobile version of the Galaxy S 4 or iPhone 5 going forward. But the company plans to have 200 million covered by LTE by year-end, so an aggressive LTE rollout schedule could increase potential customers for either of these phones.
And depending on the amount of the monthly payment — I anticipate it to be $20, just like for the iPhone 5 — T-Mobile’s Galaxy S 4 could cost less than the same phone model from its peers, pending their official pricing, of course. In the case of the iPhone 5, that price is $579, which is $70 cheaper than buying a full-priced iPhone 5 from another carrier.