T-Mobile drops contract plans, ends phone subsidies

T-Mobile has quietly ended plans that subsidize the price of phones.

Ahead of a press event Tuesday, T-Mobile quietly updated its website this weekend to announce that it was doing away with service contracts. With the move, T-Mobile becomes the first major U.S. carrier to drop smartphone subsidies.

The Seattle company has made it clear that it would stop subsidizing cellphones since last year, but the move won’t become official until Tuesday. Instead, users will be able to purchase phones at their full price, pay in installments or bring their own device and simply pay for the plan.


Under contract plans, customers typically agree to sign up for two years of service in return for getting a phone that costs substantially less than it would without the subsidy.

According to a link on T-Mobile’s website, the company will charge $50 a month for one line, $30 for a second line and $10 for additional lines after that. Those plans include unlimited talk, text and data with up to 500 megabytes of high-speed data.

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Users can pay $10 more a month for an additional 2 gigabytes of high-speed data. That can be increased by 12 GB in increments of $10 for each additional 2 GB per line. Users can also choose to pay $20 a month for unlimited high-speed data.

T-Mobile will explain the plan in detail at Tuesday’s event, when the company is also expected to announce details about a T-Mobile supported version of the iPhone and the release of the T-Mobile version of the BlackBerry Z10.

The company’s LTE network, which provides users with the fastest available data speeds, is also expected to go live in a handful of markets after the announcement.


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