AppleInsider Staff
Resurgent wireless carrier T-Mobile on Thursday announced a new "smartphone equality" initiative that will see the company base device financing decisions for existing customers on their T-Mobile payment history, rather than their credit score.
Under the program, any T-Mobile customer who has made payments on time for 12 consecutive months will be eligible for all of the carrier's financing options, including those that offer no-interest payment plans with no down payment. Customers who have already been with T-Mobile for at least 12 months will immediately be eligible when the program goes live on Jan. 25.
"This is not only the right thing to do. It's the smart thing to do, too," T-Mobile CEO John Legere said in a release. "Fact is, your past payment history is the best way to tell if you'll make future payments on time. So this is good for customers and good for business."
"Ultimately, this initiative will lower the barrier for millions more Americans to get a smartphone - the most transformational technology in our lifetime," Legere added in an accompanying blog post. "At a time when mobile connectivity is sweeping the globe, the United States ranks a miserable 13th in the world in terms of smartphone penetration − behind a dozen countries including Australia, Ireland, Israel and Saudi Arabia among others."
Customers who currently have a prepaid relationship with T-Mobile can use that time as credit toward the smartphone equality program if they move to a postpaid plan.
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27 Comments
Every time I see something like this from T-Mobile; I'm amazed at how bad it could have gotten if ATT had been allowed to buy them out and appreciate the fact they are pushing both the 2 top carriers to actually complete.. Otherwise I think we'd be much worse off right now when it comes to pricing and service.
I think he's doing the right thing with this. Rewarding existing customers - it gets my goat here in NZ when the telcos come out with these attractive offers for new customers while their existing customers get f'all. They effectively make it an easy choice to switch networks ! Back asswards - they should look after their existing customers, well they do kinda (at contract renewal time) but not as well as they should.
This is definitely something that had been happening in the mortgage industry when Congress pressed Fannie Mae to make banks give loans to people with alternative credit - and income. Like people without banking accounts and credit scores. I believe that extended to other industries - there is an alternative credit scoring industry based now on how you manage credit cards, but on how you pay your bills.
Let's face it. Many people are just not good with credit. They are better with cash/checking. And a good chunk of them do pay their bills on time.
FICO credit models do change, but they seem geared toward how much revolving credit you have. The world does not all run like this. Some people just live on cash and maybe a checking account and don't or can't have revolving credit. There is a large population of people who are shut out and it looks like T-Mobile realizes this. Well, Joe So-and-So pays his T-Mo bill diligently each month. So why not expand to selling him a smartphone?
It all makes sense, although there is probably a chance to be an increase in credit defaults and all T-Mobile customers will pay for that. But if it brings in more revenue, then maybe T-Mo can invest even more in their network, increasing customers even more.
They will probably get a lot more customers from other carriers.
If ATT had bought T-Mo, we'd all be screwed even more. We were on ATT then moved to T-Mo a few years ago and we are very happy customers. Yes, we are in the city 99% of the time. LTE is great. We save a lot on our bills each month. My daughter in Europe can keep her line and use it when she visits the states. And I don't have to pay $40 for her separate line while she is gone (only $10). The billing is EASY to understand. If there is an issue, we can call customer care and get great service, and a lot less corporate-ty than ATT. T-Mo is simple. It's all good. And now T-Mo is shaking things up.
Apple ][ will have a fit. I can see it now ... 'Only the elite should own an iPhone but any other make it's ok'. :D
I would switch to T-Mo in a heart beat if they have a better coverage where I live.