T-Mobile on Tuesday unveiled the Apple iPhone 5 for its wireless network and said it will offer the phone for an initial payment of US$99 without a contract, followed by monthly installments.
The iPhone 5 will be available in stores starting April 12, said John Legere, CEO of T-Mobile, during an event in New York City. The iPhone will be locked, and users will have to pay installments of $20 per month over 24 months to cover the cost of the smartphone.
Offering the phone without a contract gives customers the flexibility on when they move to their next Apple device, Legere said.
"We are thrilled with the partnership we've created with Apple," Legere said. "It was such a ... void in our product portfolio."
Users can give back the iPhone and stop making payments on it if they decide to leave T-Mobile and move over to another carrier, T-Mobile executives said. The smartphone cannot be switched over to other carriers like AT&T, but it can be unlocked after the payment obligations are completed.
T-Mobile's iPhone offering is different from the way carriers have packaged smartphones, in which the latest handsets are offered at discounted prices with long-term contracts.
The new phone will work on LTE networks, which T-Mobile officially debuted on Tuesday in seven U.S. cities. The company will turn on LTE in Houston; Baltimore; Kansas City, Missouri; Phoenix; Las Vegas; San Jose, California; and Washington, D.C.
When a signal isn't available, the iPhone users will fall back from LTE to HSPA+ or other compatible networks. T-Mobile's LTE network will reach 100 million users in the U.S. by the middle of the year, and 200 million by the end of the year, the company said.
T-Mobile is shedding the idea of long contract plans, announcing new monthly voice and data plans that do not require long-term contracts. The data plans for individuals have unlimited text and data, and also offer fast data speeds up to a certain threshold. Data will go down to slower speeds after passing the high-speed threshold, but in these cases users don't have to pay overage fees.
"When you choose T-Mobile, you get unlimited everything," Legere said.
The new plans start at $50 per month for unlimited talk, text and Internet with 500MB of high-speed data, after which Internet speed slows down. For $10, 2GB of high-speed data can be added per line, or for unlimited 4G, data is available for $20 more per line. T-Mobile will put a "fair use" policy into place in which users of the unlimited plan could be throttled in case of overuse of the data plan, for example regularly downloading gigabytes of data, executives said.
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