T-Mobile didn't make just an iPhone announcement this week, it made the first real attempt in probably over a decade to improve the US's wireless industry with no-contract plans. But the language in all this buzz of "no contracts" isn't really the story, it's all about unlocked phones.
T-Mobile may be changing the game for cell carrier choice
With T-Mobile's new plans, you'll pay a noticeably lower monthly service price because the carrier is the first in the US to try unbundling devices from plans. You'll have two options to get a device, the first being that you can pay full price for a phone up front, such as a 16GB iPhone 5, which will run you US$580. You can also elect to enter into an installment plan—known as a "contract" in some parts of the world—for the phone, separate from your service plan. You'll pay a subsidized-like price of $199 to get in the door, then pay the rest off over time. Cheaper phones have cheaper starting points; to get T-Mobile's iPhone 4, it's just $14.99.
I wager that second option—maybe we can call them "device contracts"—will remain pretty popular for the near future, if for no other reason than people usually don't tend to change their habits very quickly, especially the financial kind. That's why the real news in all this is unlocked phones finally making their true, nationwide debut. People have long used different ways to pay for expensive things over time, but this is the first time in the US that wireless customers will have the freedom of chocie.
Granted, the road ahead is bumpy. Google tried pushing the unlocked phone thing a couple years ago with the Nexus One, and it didn't get very far. Plus, looking at just the current crop of iPhones, their mix of GSM and CDMA wireless radios doesn't exactly make them very compatible with carriers besides the one for which they were built.
That said, US phones in general have been slowly gaining multi-carrier and multi-national wings. Perhaps a major national carrier, even the one ranked fourth and in last place, will have better luck pushing things further forward with a new selection of plans, buying options, and devices that, finally, includes the most popular phone in the US.
For the first time, a national US carrier will give customers the freedom to switch carriers at any time, or travel internationally without gouging their wallets with inexplicably expensive "international roaming" plans. That alone will surely be enough to win T-Mobile some customers, and where the customers go, the money and competition follows.