T-Mobile dropping device subsidies in the USA

T-Mobile dropping device subsidies in the USA

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T-Mobile announced Dec. 6th, 2012, that they will no longer be subsidizing the cost of any wireless devices on their network in the USA.  This is a huge change in the business model for T-Mobile, that will likely impact how we have been selling rugged devices that have WWAN capabilities.  Eliminating device subsidies now puts rugged non-stocked devices like the EP10 on a more level playing field with other stocked products from the wireless carriers.  T-Mobile based their decision, in part, on the rising cost and complexity of smart phones and tablets entering the market. For them, it was more cost effective to eliminate the device subsidy and provide more competitive data plan rates.  

Ultimately, if the customer can't consider "free" devices in their purchasing equation, then ROI and TCO discussions for rugged  vs. consumer devices becomes much more important, and thereby provides the vehicle for delivering the correct solution to the customer.

The article concludes that other carriers in the USA probably won't eliminate device subsidies any time soon.  But, T-Mobile is changing the typical wireless carrier business model, which may eventually effect how other carriers do business.

http://www.fiercewireless.com/story/t-mobile-dropping-smartphone-subsidies-bigger-getting-iphone/2012-12-06?utm_medium=nl&utm_source=internal

Gregg Anderson
Manager, Mobile Business Development
Americas