T-Mobile held its most recent earnings call this week, and there was a portion of the conversation that was held around device subsidies and how they might evolve into something new in the future. T-Mobile CEO Srini Gopalan made a few statements to investors that suggest device subsidies could either be going away entirely or simply going away in their current form. Hinting that the way things work with device subsidies on plans now may shift into something different.
Gopalan didn’t explicitly mention what T-Mobile’s plans were for this. Given the nature of the conversation, though, T-Mobile subscribers will definitely be interested to know how things will go moving forward. Way back before Equipment Installment Plans existed, T-Mobile was just like every other carrier. You signed up for a two-year contract, you got a new phone at a discount, and you were locked into your carrier for another two years. But the phone was paid for at a discounted rate.
These days, T-Mobile and the other major carriers have done away with traditional contracts. Instead, you essentially lease the phone from your carrier for 24 – 36 months. At the end of that time, the phone is paid off. All the while, you’re getting bill credits for the monthly cost of the phone. This could all be going away.
T-Mobile device subsidies may be evolving into something new
Gopalan’s statements about device subsidies weren’t terribly detailed, but it suggests that he has plans to shake things up. In the earnings call, he reportedly said that T-Mobile will always be competitive with phones. Additionally, he mentioned that things are shifting away from traditional promotions based on device subsidies. The new path is moving toward “offerings driven by value.”
It’s not exactly clear what Gopalan meant by this. There is clearly a plan in place to change the way T-Mobile offers customers new phones with upgrades and activations. What that plan is likely won’t be made apparent until T-Mobile holds an official announcement.
For now, T-Mobile subscribers can still get a new phone and have it broken up over their bill with the Equipment Installment Plan. However, this way of buying new phones may not be long for this world. At least with T-Mobile. And if T-Mobile shifts away from this while having it work in their favor, expect the other carriers to follow suit.
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