T-Mobile on Monday boosted the upfront cost of the iPhone by $50 to $149.99 for the 16GB version, which T-Mobile Financial Chief Braxton Carter said Wednesday was the company's plan the entire time. However, T-Mobile didn't say at launch that the lower price was temporary. And the increase -- which brings the total cost for the phone to $629.99 after two years of $20 a month payments -- comes only a month after the iPhone became available at T-Mobile.
"When we look at the overall landscape, there's no need to continue with the initial promotional pricing we had with the iPhone. It was a planned promotion for a very limited of time to create momentum,"Carter said at the J.P. Morgan tech conference in Boston, which offered a live feed of his presentation.The carrier, which recently acquired MetroPCS and went public in the U.S., started to its customers on April 12. Since that time, T-Mobile has sold about 500,000 iPhone 5 units. It originally offered the device at a good discount to the unsubsidized price at other wireless providers.
The boost brings the price more in line with the cost at rival carriers, though T-Mobile still has a slight advantage. For example, an unlocked iPhone 5 with 16GB costs $649 through Apple.
The iPhone is a key part of the company's strategy. For T-Mobile, the iPhone 5 isn't just another flagship phone; it's a gateway to the carrier's new way of thinking when it comes to its service plans and device costs.
T-Mobile earlier this year killed its contract plans and subsidies for phones as part of its "Uncarrier" campaign. Under the new plans, consumers pay the full price for their smartphones through an upfront fee and two years of monthly payments, but they pay a lower monthly rate for cellular service, ultimately saving money. One of the biggest changes is that T-Mobile no longer requires customers to sign a contract for service.
The company also bought MetroPCS to help it better compete with its larger rivals, Verizon, AT&T, and Sprint. T-Mobile is in the process of merging the two companies' systems and networks.
T-Mobile Chief Technology Officer Neville Ray said Wednesday that Las Vegas will be the first market where MetroPCS traffic is moved over to T-Mobile's network. He said that will drive greater speeds and better performance in the city, and the change will take place as of Wednesday night.