FAQ: T-Mobile's new phones, LTE in seven cities, and no-contract plans

Details of T-Mobile's new sales and network plans as disclosed in a Webcast featuring CEO John Legere today

In a set of announcements on Tuesday, T-Mobile USA said it would begin selling the iPhone 5 and other new phones, and announced that it had launched LTE in seven cities.

The new phones and LTE accompanied a new three-tiered pricing structure unveiled by T-Mobile on Sunday for unlimited voice, text and high-speed data at $50, $60 or $70 a month. The two cheapest plans throttle speeds to 2G levels -- perhaps 50 Kbps to 100 Kbps -- when the data usage exceeds 500 MB in a month for the $50 plan and 2.5 GB in a month for the $60 plan.

In a Webcast today, T-Mobile CEO John Legere described the new phone pricing and rate plans as a way to simplify and clarify how a wireless carrier should work for consumers. "It's more transparency, more certainty, with unlimited everything," he said.

He urged customers to try the new approach, adding: "If we suck this month, drop us!"

Here's some answers to other key questions about today's announcement.

What are the new phones T-Mobile will be selling? For new phones and devices running over LTE, T-Mobile announced the iPhone 5, Samsung Galaxy S4, BlackBerry Z10, HTC One, T-Mobile Sonic 2.0 Mobile HotSpot LTE and the Samsung Galaxy Note II.

What's the pricing plans for the new phones? A new iPhone 5 will cost $579, starting April 12, with the option to pay $99 down and $20 a month for 24 months. The $579 price tag is $70 below the cost of a new 16GB unlocked iPhone 5 from Apple, which is priced at $649. T-Mobile will also sell the iPhone 4 and iPhone 4S in select cities, but didn't specify pricing.

The iPhone 5 will be the only one to work with HD voice, a feature being built into T-Mobile's network. It will also work over three network channels: Advanced Wireless Services, the 1700 band HSPA+ and 1900 band HSPA+. That capability means more AT&T devices will operate on T-Mobile's network, and AT&T is allowing customers to unlock their phones.

The Galaxy S4 will go on sale May 1, officials said, but pricing was not announced.

The Z10 costs $99.99, with 24 monthly payments of $18 or $532 total.

The HTC One carries a $99 down payment, but officials didn't disclose monthly payment costs or availability.

The Note II is already shipping at T-Mobile, but an over-the-air update allows for LTE connectivity with T-Mobile.

There are many other phones listed on T-Mobile's Web site that won't run on LTE, but will run on HSPA+ and 3G. Those include the Samsung Galaxy S II in white for $30 down and $16 a month for 24 months (or $414).

Do phone buyers have to pay interest charges? No interest will be charged. The total cost of a phone will be actually less than what other carriers might charge for an unsubsidized version, T-Mobile asserted.

So, is this an unsubsidized phone pricing plan? Legere repeatedly said the T-Mobile phone pricing plan does not mean they are unsubsidized phones, since its prices are less than full unlocked prices. That's true for the iPhone 5 full price from T-Mobile, for example, which is $70 less than what Apple charges.

Given that these are prices without the same subsidies offered by other carriers, are the T-Mobile phones locked for use with T-Mobile service only? They remain locked to T-Mobile until a person pays off the phone, either over the 24-month plan or any time before then. Are there any other gotchas? Throttling is one gotcha. Even with an unlimited data plan of $70 a month for one phone with T-Mobile, there is the chance the 4G speeds will be throttled to a slower speed if usage exceeds 5GB.

T-Mobile details the policy in a pop-up in the rate plan showing section 11 of its Data Plan Terms, but doesn't specify what speed the throttling will be--at least in section 11. (Click on " See Data Plan Terms for more details," a link near the bottom of the page.) How serious can throttling be? T-Mobile throttles to 2G speeds on its 500 MB and 2 GB plans once 500 MB and 2.5 GB are reached in a given month. 2G is defined as low as 50 Kbps to 100 Kbps in a support section of the T-Mobile site, although users on various carriers have seen 2G speeds at 50 Kbps to 350 Kbps.

Speeds over wireless are variable, depending on topography, the number of users on a cell tower and the handsets and software they are using. Advertised speeds are often well above what users experience when running speed tests on their Web browsers.

Any other gotchas? It's not exactly a gotcha, but don't confuse T-Mobile's three data service plans with data sharing plans like AT&T and Verizon Wireless announced last year.

With each new family plan, T-Mobile won't allow users to share data, even if connected to one device over Wi-Fi. A two-line plan costs $80 a month, $30 more than the $50 for unlimited voice, data and 500 MB of high-speed data. Three lines and each additional line cost another $10 per month.

If any of the plans don't work out well, you can switch plans at any month, and your device remains locked to T-Mobile as long as the phone is not paid off.

Where is T-Mobile launching LTE? The seven cities named Tuesday are Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose and Washington. Service is coming soon to New York City, Legere said.

In all, the carrier is planning to provide LTE to more than 200 cities, with a total of 200 million people served by year's end.

How does LTE compare to HSPA+? T-Mobile has HSPA+ widely available on its network, and in some cases it can reach a theoretical speed over HSPA+ 42 of 42 Mbps. T-Mobile has said its HSPA+ has been clocked in the field at nearly 20 Mbps. LTE is generally seen on other carriers at 10 Mbps on downlinks, although this speed varies widely.

How important are these announcements for T-Mobile. Carrying the iPhone may be most important for T-Mobile. Legere even noted, "We are thrilled at the partnership with Apple and it was such a huge void in the device portfolio."

With the iPhone price of $579 and T-Mobile's unlimited data rate of $70 a month, Legere said that the overall savings to a T-Mobile customer over two years would be $1,000 over what AT&T charges. He didn't explain his math.

What would AT&T charge? An AT&T individual plan costs $90 for unlimited voice and texting, with $30 additional for 3 GB per month of data, a total of $120, which would be prorated to $110 if AT&T offered a 2 GB data plan.

That $110 represents a $40 difference per month from T-Mobile's pricing, which amounts to $960 over two years. Adding in the $70 savings over Apple for an unlocked phone, would bring T-Mobile's savings to $1,030.

What about Verizon?Verizon offers unlimited voice and texting with 2 GB for $70 under a prepaid plan. That plan comes with various prepaid phones including the HTC Rhyme for $129.99.

Verizon also has some pre-paid plans of $50 a month for unlimited voice, text and data, but limits customers to a group of lower-end phones that cost $10, such as the LG Cosmos2 and the Samsung Gusto.

Sprint has an Everything Data plan, for $80 a month for unlimited data and texting, but 450 voice minutes.

How important is LTE to T-Mobile? With 33 million subscribers making it the nation's fourth largest carrier, T-Mobile is also hoping to grow that number. With "screaming fast" LTE and HSPA+, T-Mobile will provide some opportunity for growth, Legere added. Sprint, Verizon and AT&T have already launched LTE, and Verizon has the largest LTE network in the world so far.

Legere also said he spends one hour a night listening to customer care complaints, and even offered his email address to hear more, apparently since he's not busy enough: john.legere@t-mobile.com.

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 mhamblen@computerworld.com.

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