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Tuesday, April 9, 2013

T-Mobile USA Sweetens iPhone 5 Deal With Trade-In Program

T-Mobile USA, the struggling phone carrier, really wants you to switch to its network â€" so badly that it will give you a break on a brand-new iPhone in exchange for an old one.

The company said on Wednesday that when it begins selling the iPhone 5 on Friday, it will offer a discount for people who trade in their older iPhones. Customers can trade in an iPhone 4S or iPhone 4, for example, for the iPhone 5 at no cost up front, along with a $120 credit toward the monthly device fee. The offer lasts through mid-June.

Normally, the iPhone 5 would cost $100 on T-Mobile, and a customer would have to pay an additional $20 a month over two years to cover the remaining cost of the device, on top of the phone and data plan. With the trade-in offer, the $120 credit would knock down the monthly device fee to $15.

In other words, if a customer traded in her old iPhone from Verizon to T-Mobile and got an iPhone 5, the least she can pay each month would be $65 (when accounting for the $15 monthly device fee and $50 phone plan that includes 500 megabytes of data).

The company last month introduced its new smartphone plans that do not require signing a traditional two-year contract. Instead, it allows customers to buy a smartphone for less up front and then requires them to pay a monthly device fee for two years.

In an earlier interview, John Legere, T-Mobile’s chief executive, said that one of the company’s main goals would be to take customers away from AT&T because the carrier has been notorious for its network problems, especially when it came to the iPhone. The iPhone trade-in deal is clearly T-Mobile’s hook to lure customers from competing networks. But analysts say that despite T-Mobile’s cheaper and less restrictive phone plans, the company will have to work hard to get a big boost in customers because its network coverage is still not as broad as its competitors.