T-Mobile Stirs Wireless Carrier Wars With Low-Cost iPhone Plan

T-Mobile US Inc. on Wednesday, in the latest volley in the heated war for subscribers among wireless carriers, unveiled new pricing plans that lease out the latest iPhone for as little as $5 a month.

The new plan offers a new 16-gigabyte Apple Inc. iPhone 6s for monthly installments of $5 or $10, depending on the value of a trade-in phone. After an 18-month agreement is completed, the iPhone will be available for the customer to purchase. As part of the same campaign, the larger iPhone 6s Plus 16GB is being offered for as little as $9, depending on the trade-in phone.

John Legere, the chief executive of the T-Mobile who has been known to battle with rivals on social media, said that the company is seeing "crazy demand" for iPhone preorders.

The new pricing option come as the four main carriers in the U.S. are competing for subscribers in a mature market with little growth.

Wireless carriers have been replacing traditional two-year contracts that include smartphone subsidies with installment plans that spread the price out and encourage swapping out phones.

Sprint Corp. has leasing plans that run as low as $15 a month over a 22-month lease. Verizon Communications Inc. advertises a monthly plan for installments of $27.08 a month for 24 months. AT&T's "Next" installment plan calls for payments of $21.67 for 30 months.

Apple has also taken aim at wireless companies, announcing recently that it would finance iPhone sales directly to customers for the first time without requiring them to be tied to a particular carrier.

That offer marks a sharp turn in the relationship between Apple, which needs to sell tens of millions of new phones each year, and wireless giants that rely on the iPhone to attract customers to their cellular plans.

T-Mobile has been snatching away market share by aggressively slashing its prices. Earlier this month, Mr. Legere said the company had already surpassed the 2.1 million net subscriber additions it posted in its previous quarter with nearly two weeks remaining in the current quarter. T-Mobile officially passed sprint in total wireless connections last month.

September is particularly significant time period for wireless carriers with the launch of Apple's new iPhone as well as the annual return of vacationers and students that stirs up subscriber activity.

Shares of T-Mobile rose 2% to $43.17 in recent trading Wednesday. T-Mobile has seen its shares rise 60% so far this year, while Sprint's shares have climbed 8.2%. Verizon shares have dropped 5.7% and AT&T has declined 4.1%.

Write to Ezequiel Minaya at [e-mail]

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(END) Dow Jones Newswires

September 23, 2015 11:55 ET (15:55 GMT)

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