NEW YORK (TheStreet) - T-Mobile is hoping to shake-up the mobile phone market with a "no contract" monthly plan aimed at attracting the millions of customers frustrated by being lock-into a multi-year contract with a less than benevolent service provider.
But, there is a catch. "No contract" plans mean you pay full price for your phone as it's done in many parts of the world. No more paying for that shiny handset as part of your monthly fee. T-Mobile is betting that the "no contract" plan can bolster the company in the battle for users with Verizon, Sprint and AT&T.
To win some media attention, T-Mobile is planning a media event today to discuss the completion of their merger with MetroPCS and the start of their next-generation LTE/4G services in at least two cities.
The merger recently won approval from U.S. and European regulators, among the final steps in a process that is likely to be completed by mid-April when MetroPCS shareholders meet to vote on the deal. The result will be a new, publicly-traded company with Germany's Deutsche Telekom owning nearly 75%.
Shares of MetroPCS slipped 0.5% to $10.55 in early trading.
As for the switch from their current 4G technology to LTE, the merged company will gain new spectrum allowing it to reconfigure portions of T-Mobile and MetroPCS' current frequency bands to handle more advanced technologies.
The first two cities to get super-high-speed LTE data capabilities are expected to be Kansas City and Las Vegas. T-Mobile has also been testing LTE here in New York with positive results being reported. The Blackberry Z10 and Samsung's Galaxy Nexus II phablet (part phone, part tablet which runs on Google's Android OS) are expected to be the first two LTE-capable handsets announced.
As for new service pricing plans, according to a page which just appeared on T-Mobile's Website it looks like customers with individual and family plans will be able to choose from these new offerings. All are expected to offer unlimited talk, text and Web access plus at least 500 MB of high-speed data at $50 per month. Larger "buckets" of high-speed data will be available in 2 GB increments as well as a totally unlimited everything plan are available at extra cost, accordeing to T-Mobile. Family plans of multi-handsets will be discounted.
But, remember the catch: the full-priced phone. U.S. consumers aren't used to seeing real, unsubsidized prices of cell phones and could reject the new pricing schemes. Call it sticker shock. It's a big gamble on the new company's part - one that AT&T , Sprint and Verizon will be watching very closely.
We'll be in attendance at tomorrow's T-Mobile event and will let you know exactly what they have to say about the new company's next steps.
--Written by Gary Krakow in New York.
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