T-Mobile Eliminating 2-Year Cellphone Contract Requirement?

Tuesday, 05 Mar 2013 10:38 AM

By Alexandra Ward

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Techies and bloggers predict that T-Mobile will soon ditch its two-year contract requirement in favor of a no-contract model starting later this month, and other cell phone carriers are also said to be mulling over the idea.

No official announcement has come yet from T-Mobile, but TmoNews, an unofficial T-Mobile blog, claims the company will drop its contracts on March 24 and will launch a new "uncarrier" approach. That means early termination fees will soon be a thing of the past.

Customers generally have a love-hate relationship with carrier contracts. While the agreements allow them to get new phones at low prices (a new iPhone 5 with a contract is just $200 compared to the $649 regular retail price), the commitment also requires a $250 fee if a customer wants to get out of their contract early.

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T-Mobile's reported new strategy will spread the high cost of the phone out over a multi-month payment period, according to TmoNews.

Insiders say other wireless carriers will probably follow in T-Mobile's no-contract footsteps.

"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," CNET.com's Roger Cheng told CBS Denver. "Carriers are tired of people complaining about contracts."

Along with no more contracts, T-Mobile is also rumored to be working on a new marketing strategy that will debut when the company finishes its merger with MetroPCS this year. The cell network will reportedly retire its "Stick Together" tagline, as well as Cindy Foulkes, the Ducati-driving, motorcycle-riding spokesmodel who appears in the commercials.

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CEO John Legere also confirmed in December that T-Mobile will soon sell the iPhone, a necessary move if the company wants to stay relevant.

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