T-Mobile USA is going to push its smartphone prices down in a bid to attract more first-time smartphone users to postpaid plans, the company's CEO said.
In an interview with the Wall Street Journal, T-Mobile CEO Philipp Humm said the carrier plans to sell a number of devices running on Google's (NASDAQ:GOOG) Android platform that retail for $100 or less. "We are working with our vendors on this one to drive the price of smartphones down," Humm said, adding that not all customers want an expensive, high-end device.
The push by T-Mobile, the nation's No. 4 carrier, highlights the efforts that all operators have made recently to push smartphone prices down and change their pricing plans to attract more first-time smartphone buyers. Subsidies by carriers have helped bring the price of some Android phones to well below $100. T-Mobile itself offers several such deals, including for phones like the LG Optimus T and the Motorola Mobility (NYSE:MMI) Charm. Sprint (NYSE:S) just announced that it will launch the HTC Evo Shift Jan. 9 for $149.99 after a $100 mail-in rebate on a new, two-year contract. Additionally, flat-rate carriers are offering cheap Android phones even without a subsidy. MetroPCS (NASDAQ:PCS) offers the Huawei Ascend for $99.99 after a $50 mail-in rebate and Leap Wireless (NASDAQ:LEAP) offers the phone for $140.
Aside from handset pricing, carriers are also working to lower the cost of smartphone data plans. AT&T Mobility (NYSE:T) rolled out tiered, usage-based data pricing last year, charging $15 for 200 MB and $25 for 2 GB of data. Both T-Mobile and Verizon Wireless (NYSE:VZ) have followed AT&T's lead with similar data pricing options.
T-Mobile does not plan to gear its entire lineup toward to the low end of the market though, and will still offer high-end devices. However, the company has struggled to attract postpaid subscribers. T-Mobile lost 60,000 postpaid subscribers in the third quarter, an improvement from 140,000 net postpaid losses in the year-ago period but a sharp drop from 106,000 net postpaid additions in the second quarter.
- see this WSJ article (sub. req.)
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