The carrier, one of the few that doesn't offer Apple's smartphone, wants to make an end run around its snub by Apple. But, yes, there is a catch or two.
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T-Mobile USA badly wants to be known as an iPhone carrier, even if it doesn't actually sell the iPhone.
The nation's fourth-largest national carrier, and one of the few that doesn't offer Apple's smash-hit product, plans a big campaign to get iPhone users to switch over to its less-expensive service plans.
T-Mobile has long quietly welcomed unlocked iPhones, but it soon plans to dispense with the subtlety. Under a campaign titled, "Unlocked & Unlimited," the carrier plans to start carrying unlocked iPhones in its stores for demonstration purposes, air national commercials inviting unlocked iPhone users into its stores, and even plans to launch a few of its own iPhone apps to improve the "T-Mobile iPhone" experience.
"We're seeing customers increasingly asking for more choice," Harry Thomas, director of marketing at T-Mobile, told CNET. "We do think we have a big opportunity to sell people who are already have [an iPhone]."
More than a million iPhones currently run on T-Mobile's network.
When carriers sell phones, they "lock" them so customers can't easily switch to another service provider. In April, AT&T said it would begin unlocking iPhones for certain eligible customers who have finished their contract, opening the door for some to trek to T-Mobile.
T-Mobile, in turn, plans to launch its new campaign on Wednesday, the same day that Apple is widely expected to unveil its next iPhone. T-Mobile announced the campaign in a blog posting today.
The campaign suggests T-Mobile is unlikely to sell the next iPhone in an official capacity. Over the past year, the iPhone has made its way to an increasingly wide range of carriers, including regional players such as Cincinnati Bell and prepaid service providers Leap Wireless and Virgin Mobile, which is a unit of Sprint Nextel. For a combination of technical and cost issues, T-Mobile has never been in the mix.
Thomas declined to comment on the next iPhone.
T-Mobile is banking on the new iPhone causing a lot of Apple fans to sell their older iPhones, flooding the secondary market with dumped unlocked iPhones that can easily be brought over.
"For everyone waiting in line for their new iPhone, they've got to do something with their original product," Thomas said.
T-Mobile believes its more competitively priced rate plans, including a recently launched no-strings unlimited data option, will lure in customers with a used iPhone or looking for a good deal. That the carrier is embracing the bring-your-own-device model isn't new; it has seen a lot of success with consumers signing up for no-contract plans with an existing phone.
"There are quite a few people who want an iconic device, but want the cheaper offer we bring," he added.
T-Mobile touts that its plans don't include the overage charges of larger carriers. Like Sprint, it offers an unlimited data plan with no strings, which means no caps or throttling, which is when carriers slow the connection after a certain threshold is reached.
T-Mobile's Value plans range between $59.99 and $104.99 a month. The low-end plan includes unlimited voice and text message and 2 gigabytes of data before throttling. For $10 more, customers can get fully unlimited data. The high-end plan comes with 10 gigabytes of data.
In comparison, a plan with 3 gigabytes of data and unlimited calling at AT&T costs $99.99 a month.
Before you make the switch
There are several catches. T-Mobile can only accept older iPhones that have run on the AT&T network, since the Verizon Wireless and Sprint versions run on a different band of spectrum that is incompatible. For most of the country, the unlocked iPhones will be running on T-Mobile's much slower 2G network, which can be a tough pill to swallow for customers used to a speedier connection.
Even if 4G is available, the iPhone is built with an antenna that can't pick up the optimal speed available to the network. T-Mobile is upgrading its 4G network to a standard called HSPA+ 42, which gives a theoretical peak download speed of 42 megabits per second, but the iPhone has a modem that goes up to HSPA+ 14.4. That means the iPhone can't connect as fast as some of T-Mobile's newer smartphones.
Howard declined to comment on how fast the iPhone could run on its network, but noted that where 4G was deployed, its connection speed was 70 percent faster than on AT&T.
Front and center
T-Mobile is going to be up front with its limitations. Its stores will carry demo units of the iPhone -- an unusual scene since carriers rarely display products they don't sell in their stores. Customers can try out the iPhone and see how the experience is and how quickly (or slowly) the phone runs on its network. The carrier will also train its sales staff to address iPhone-related questions.
In select markets such as Atlanta and New York, T-Mobile will offer a $100 gift card to anyone bringing in an iPhone and signing up for a two-year contract.
The carrier plans a large national campaign, but Thomas declined to comment on the mix of TV, radio, online, and other media advertisements.
T-Mobile also plans to build apps for its iPhone customers. The first app available will be its T-Mobile MyAccount app, which allows customers to go in and check their account balance, something the other carriers offer and T-Mobile offers on its other devices.
By the end of the year, T-Mobile plans to launch several other apps, including T-Mobile visual voice mail and a T-Mobile TV app, which offers a mix of free and premium live and on-demand video.
T-Mobile believes AT&T is ripe for the picking, and Thomas said the carrier plans to be more aggressive.
"We're hearing from AT&T customers that they are frustrated by costs and capacity constraints," he said. "We do have high expectations."