T-Mobile has done away with cellphone contracts, replacing them with installment plans in an effort to stay competitive in the U.S. market.
Instead of offering its customers a phone with a two-year contract, T-Mobile will offer it for a fixed upfront price plus a monthly fee for unlimited calls and data. That second fee will include the cost of the phone, and when the phone is paid off (typically after two years) the fee will be reduced, in contrast with traditional two-year contracts where monthly payments typically stay the same after two years.
T-Mobile calls its new pricing plans Simple Choice. For example, a Samsung Galaxy S II costs $29.99 today, and $16 per month on top of the monthly data/voice payment, for 24 months.
T-Mobile is the fourth biggest U.S. mobile carrier (behind AT&T, Verizon and Sprint). It will hold a special "Uncarrier" event Tuesday, where it is rumored to reveal the availability of Apple's iPhone in its stores.