{"id":648872,"date":"2013-03-26T13:57:31","date_gmt":"2013-03-26T17:57:31","guid":{"rendered":"http:\/\/gigaom.com\/?p=624470"},"modified":"2013-03-26T13:57:31","modified_gmt":"2013-03-26T17:57:31","slug":"t-mobile-is-ending-subsidies-and-contracts-but-its-still-locking-phones","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/648872","title":{"rendered":"T-Mobile is ending subsidies and contracts, but it\u2019s still locking phones"},"content":{"rendered":"

T-Mobile sounded the death knell of contracts and phone subsidies on Tuesday at its Un-carrier event in NYC<\/a>, but it is maintaining another unpopular practice in the mobile industry: locking phones.<\/p>\n

Customers who buy a device from T-Mobile through one of its financing plans (for instance, the iPhone 5 can be had for $100 up front<\/a> and 24 monthly payments of $20) will still get locked devices. But T-Mobile CMO Mike Sievert said whenever a customer finishes paying off his or her financing plan, T-Mobile will unconditionally unlock the device.<\/p>\n

Earlier this month, I wrote that the phone locking was a symptom of the broken subsidy model<\/a> used by carriers. T-Mobile is now fixing the subsidy system, but it\u2019s not ending the practice of locking. What gives?<\/p>\n

Well, the answer is a bit nuanced. Instead of diving headlong into the murky depths of full-cost devices, where customers wind up fronting the costs of a $500 or $600 smartphones on day one, T-Mobile is easing customers into the model with interest-free financing plans.<\/p>\n

Though it\u2019s separating the device from service plan<\/a> \u2013 and eliminating the contract in the process \u2013 T-Mobile is still on hook for the device cost, and it wants ensure that its customers won\u2019t take their new iPhone or Galaxy S 4 and then bolt to another carrier. As with any loan, customers are still bound by financing contract, but T-Mobile wants extra insurance that they won\u2019t renege.<\/p>\n

\"T-Mobile<\/a><\/p>\n

T-Mobile USA CEO John Legere<\/p>\n<\/div>\n

At the event on Tuesday, T-Mobile went to lengths to explain that it is against the idea of locking all phones for the mere sake of binding customers to a specific carrier. In fact, T-Mobile hopes to benefit enormously from an unlocked device market, said T-Mobile USA CEO John Legere. He\u2019s hoping AT&T customers will take their out-of-contract and unlocked devices over to T-Mobile, giving them a second life on T-Mobile\u2019s network.<\/p>\n

Legere also said that T-Mobile is a strong advocate of device portability — Customers can take an unlocked phone to T-Mobile for a month, and if they\u2019re not happy they can move on to the next carrier. T-Mobile expects to win out in any head-to-head contest with a major carrier over unlocked devices because it won\u2019t be factoring contract subsidies into its pricing plans. \u201cThe rate plan is just going to be about the service,\u201d Legere said.<\/p>\n

With that philosophy in mind, T-Mobile will unlock any device as soon as the customer\u2019s financial obligation for it is over. If a customer buys a phone up front, T-Mobile will unlock it, Sievert said. If they accelerate their financing agreement and pay the phone off early, then T-Mobile will unlock it, Sievert said. If they return the phone to T-Mobile before the contract ends, T-Mobile will credit their financing agreement with the current market value of the device, Sievert said.<\/p>\n

It\u2019s not an ideal situation. There are uses for unlocked phone<\/a> even if you\u2019re sticking with your service provider \u2013 traveling overseas for instance \u2013 but I can understand why T-Mobile is imposing the locking practice. Ultimately it seems that if we want to be free of the carrier yoke entirely, we\u2019ll have to start buying our devices outright.<\/p>\n

\"\"<\/p>\n

<\/a><\/p>\n

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