Jeff Kagan, an independent analyst, said the success in recent years of pre-paid phone plans with no contracts shows that "a segment of the market place ... clearly prefers a no-contract environment." Kagan termed what T-Mobile is doing as a hybrid between pre-paid and post-paid plans, but closer to post-paid without a contract.
Patrick Moorhead, an analyst at Moor Insights & Strategy, said that even though Legere said it would be simple for a no-contract customer to leave T-Mobile if unsatisified, there is still some confusion about how the departure would work. "They need to work on their messaging for leaving T-Mobile," he said.
Customers can drop monthly voice, text and data service at T-Mobile at any time, T-Mobile said, but a customer must still pay off a phone before it can be unlocked from T-Mobile to use on another carrier's network (assuming it is frequency-compatible). In effect, that leaves the customer tied to T-Mobile unless the customer is willing to pay off the T-Mobile phone or purchase another phone from another carrier.
Moorhead said T-Mobile, with 33 million customers, deserves credit for its for taking on the nation's three bigger carriers. "T-Mobile's plans are a judo move on the likes of AT&T, Verizon and Sprint who have shown little creativity with their subsidy models," he said.
Jack Gold, an analyst at J. Gold Associates, said the plans were designed to help T-Mobile "break out of the pack ... to get some buzz and recover lost customers." He predicted that when customers get accustomed to the new plans and see how much they might save, "they will be receptive."
Still, Gold said that unlimited wireless service pricing plans and lowered phone subsidies won't do everything. "Unless T-Mobile's service and coverage improves, they will have a tough time keeping customers and competing with the big two -- AT&T and Verizon," Gold said. "That's one reason they are finally investing in LTE, but also because they must get better coverage and performance from their networks for the new devices like the iPhone."
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is email@example.com.
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