updated 10:33 pm EDT, Fri August 9, 2013
Promotion change came with no warning; iPhone 4 unaffected so far
Without warning, T-Mobile changed its current offer on some iPhone models during its "$0 Down Summer Sale" -- taking the iPhone 5 and 4S out of contention for the offer beginning tomorrow, but leaving the iPhone 4 (which is normally "free" on contract at most other carriers anyway). The sale let customers get iPhone models for no upfront costs, paying for the phone in monthly payments alongside the cost of their chosen service plan. Starting on Saturday, customers will need to put down $146 for the iPhone 5.
The promotion may have proven too successful for the company, which recently reported its first gain in contract customers in four years almost entirely on the back of the iPhone -- adding 1.1 million new customers, nearly 700,000 of which are new subscriptions. The company sold 71 percent more phones overall in their most recent quarter than the same period a year ago. CEO John Legere has indicated in public comments that he believes the company's change of plan options, rather than the iPhone, was responsible for the upward trend.
Under the promotion, new customers could get a "free" iPhone 5 by signing up for a two-year service plan and also paying a fee per month for the iPhone itself. Under the normal terms, customers put down $146 and pay $21 a month for the phone on top of whatever their chosen service plan costs. The change in T-Mobile's service plan options have resulted in lower overall costs for those who use a lot of data, and a lower upfront cost -- prompting competitors such as AT&T and Verizon to introduce their own versions of the "Uncarrier" plans.
AT&T currently still offers a no-upfront-cost iPhone 5 promotion under their "Next" subbrand. Under that plan, buyers can pay $27 per month for a 16GB iPhone 5 without any upfront cost, but the monthly plan options are generally seen as being higher-cost than T-Mobile's offerings.