T-Mobile Might Ditch 2-Year Contract Requirement, Others May Follow
March 4, 2013 9:03 PM
DENVER (CBS4) - Techies and bloggers are abuzz at the prospect of T-Mobile getting rid of its requirement for two-year phone contract.
No official announcement has come down from the company, but some insiders say it's just a question of time. CBS4 Money Saver Suzanne McCarroll wanted to know the chances of other companies doing the same thing.
Companies may look at the idea of getting rid of all two-year contracts if that's what consumers are demanding. Right now most major companies require a two-year contract. By signing, customers receive a sizable discount on their phones. Yet consumers dislike the two-year commitment.
"Because if it doesn't work out, you're stuck and you have to have a cancellation fee," one consumer said.
If a company gets rid of the required contract the phone will go up in price. Right now a new iPhone 5 without a contract costs $649. With a contract it's only $200. The newest Samsung Galaxy S-3 without a contract is $600, but only $200 with a contract.
Those at CNET who follow the cellphone industry closely say it is just a question of time until T-Mobile gets rid of its contracts and other carriers likely follow with similar plans.
"I think that the rest of the industry will likely be looking at this very closely, because I don't think anyone really likes the model that's set up now," Roger Cheng with CNET.com said. "Carriers are tired of people complaining about contracts."
Industry insiders say the higher cost of the phone will be spread out over a multi month period. So while consumers may save money in the end, it won't initially feel like a better deal.
T-Mobile wouldn't comment for CBS4's story, but some insiders expect the company will offer the "no contract" plan at the earliest this month, at the latest, this spring.