T-Mobile USA to End Device Subsidies

T-Mobile USA says it plans to end all device subsidies in 2013, after finding that perhaps 80 percent of its customers choose a "bring your own device" or "buy your own phone" plan anyway.

To ease the "sticker shock," T-Mobile USA probably will offer installment plans that involve an upfront $100 payment and then monthly payments for as long as 20 months. 

T-Mobile USA also apparently will get the right to sell unspecified "Apple" devices in 2013. To be sure, the "value" approach fits T-Mobile USA's approach to the market. But there is risk.

In Spain, mobile service providers have had very mixed experience with ending device subsidies. But Vodafone Spain and Telefonica lost customers after they stopped subsidizing devices. 

In fact, Vodafone Spain lost a half million subscribers in a single quarter. Vodafone Spain later reversed course and restored the subsidies. T-Mobile USA will find out soon enough if different results can be obtained in the U.S. market.