Free phones -- not free service -- at T-Mobile USA

Deutsche Telekom unit, seeking new subscribers, offers phones to new users on an unlimited family of five plan, which can cost $3,835 a year

T-Mobile USA today announced that every phone it sells on Saturday will be free to users that agree to subscribe to a two-year family plan, or to new users added to an existing family plan.

A family contract offering unlimited voice, texting and Web access can max out at $3,835, not including taxes or fees, for a family of five the first year.

The offer is limited to five phones per family plan, according to T-Mobile's press release.

Some bloggers were critical of the move, describing it as an attempt to win new subscribers amid rumors that the carrier's parent, Deutsche Telekom AG, is looking to sell T-Mobile USA. Currently, the T-Mobile has nearly 34 million subscribers in the U.S. on its GSM network, making it the fourth largest carrier behind Verizon Wireless, AT&T and Sprint Nextel.

Last week, financial analyst Shaw Wu of Kaufman Brothers suggested that T-Mobile, not Verizon Wireless, will be the next carrier to sell Apple Inc.'s iPhone in the U.S, another move in another attempt to win back lost customers.

The offer starts at 8 a.m. June 19 in every T-Mobile store, and will continue while supplies last, T-Mobile said. Up for grabs are 30 devices from manufacturers HTC, Motorola, Nokia, Samsung, Sony Ericsson and Sharp. The models include recent launches myTouch 3G Slide, HTC HD2 and Garminfone. The latter is an Android device that includes Garmin navigation technology that offers voice-guided directions.

Details on the offer and a list of stores are available at a special T-Mobile USA Web site.

Even though the devices are free on Saturday, there is a $35 activation fee per user. The free phone offer also includes normal early termination fees of up to $200.

Family voice plans at T-Mobile run from $60 a month for 1,000 voice minutes to $100 a month for unlimited talk. A 1,500 minute voice plan, that includes text and Web access costs $120 a month. An T-Mobile unlimited voice plus text and Web plan runs $140 a month.

However, these prices cover only two family members on a plan. Plans can add up to $30 per person for unlimited talk and text and up to $25 a month per smartphone user for Web access, according to the T-Mobile Web site.

A family is capped at five people, meaning the unlimited voice, text and Web plan per month would run $305 a month or $3,660 a year, not including fees and taxes that can add 15% to a bill on average. Finally, if you add the $35 activation fee per user, the first year would hit $3,835, not including fees and taxes that vary by state and locality.

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 e-mail address is

Copyright © 2010 IDG Communications, Inc.

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