T-Mobile does away with contracts

Trying to fight against the 3 top telecoms in US, T-Mobile does away with the 2 year contract, a move to entice users to their network, as the CEO said that their network is much better than Verizon and AT&T.

Mobile plans cost either $50, $60, of $70 a month, providing unlimited voice and text with 500 megabytes, 2 gigabytes or unlimited data, respectively.

T-Mobile CEO John Legere insists its customers will save money in the long run because its plans are cheaper. In truth, the cheapest AT&T plan costs a little less over the span of two years than the cheapest T-Mobile plan with a new iPhone 5 from Apple (AAPL, Fortune 500).

But when you make the bump past the cheapest plans, the value of T-Mobile’s unlimited offerings rises — especially considering that data tethering is thrown in for free.

All of this makes T-Mobile sound like a very alluring option for those currently disgruntled with their carriers. The big wild card will be whether the T-Mobile network can live up to its performance claims.

I can’t see how this will be brought over to Singapore. However, from my sources, it would seem the telecom operators are being pushed by IDA to shorten their contracts.

They are also trying to aligned the 1 year support warranty of the phones with 1 year contracts.

All this will mean that consumers have more vote to whose network provides the best quality of service.

The telecom operators would have to do better with their capex, but they save up on phone subsidies.

Competition increases.

CNNMoney | T-Mobile blows up cell phone pricing model | Read here

  • James

    If our telcos were to shorten the contractual period, they’ll probably reduce the amount of handset subsidy given.

  • http://www.productiveorganizer.com/ Kyith

    HI zirong,

    You are right but I am not sure which is better. Got a feeling networks equipment and base stations are more expensive.

    Essentially, a lot of those folks complaining about utter poor services from their telco got a good reason to try another

  • nelson

    hi d
    any reason why you sold off UMS?

  • http://www.productiveorganizer.com/ Kyith

    hi nelson, i sold of part of UMS because the actions the CEO and wifey did makes me uneasy and that we do not know if the margin impairment is a permanent thing. down cycle is one thing but a permanent margin impairment is just bad.

  • nelson

    apart from the action of the CEO and margin impairment,
    fundamentally the company had enuf cf to paid out at least 4c of dividend, thou they are dependent on AM for their profit, AM on the other way round is also bound to depend on them due to certain patent rights, plus many companies may be able to deliver engineering but not many is able to deliver precision engineering, in view of this isn’t it ideal to hold the shares for dividend and possibly capital appreciations? would like to see ur view on these :)

  • http://www.productiveorganizer.com/ Kyith

    A permanent margin impairment will massively affect the ability to pay 4 cents of dividends.