Just one month in, T-Mobile raises its $99 iPhone 5 down payment

The initial iPhone 5 pricing was part of what made T-Mobile’s big new “no-contract” phones push so attractive. Now the carrier is changing the rules: it requires a $149 down payment.

Remember that $99-down-for-an-iPhone-5 plan T-Mobile advertised as part of its game-changing new approach to the U.S. mobile market? Well, that’s over. As of Monday, if you walk into a T-Mobile store to buy a new iPhone 5, you’ll be paying $149 up front instead.

TMoNews first reported the price increase, and notes that nowhere did T-Mobile make it clear at the time that the $99 down payment was only a temporary or introductory pricing.

The iPhone 5 pricing was part of what made T-Mobile’s big new “no-contract” phones push so attractive. From our coverage in March:

T-Mobile will finance the iPhone 5 for a down payment of $99.99 and payments of $20 each month for 24 months. That works out to $580, which is actually cheaper than the unsubsidized, unlocked device price of $650 Apple charges today.

Part of that plan included “eliminating subsidies” that end up chaining U.S. wireless customers to carriers via expensive two-year plans. We don’t know how much T-Mobile has to pay Apple for each device. It’s possible the pricing change could have been planned all along, or it could be that T-Mobile realized after a month that it can’t afford to keep subsidizing smartphones that much.

T-Mobile clearly isn’t ready to clarify what its motivation was. When asked if this pricing hike was always planned, I received this statement from the carrier: “As America’s Un-carrier, T-Mobile is committed to introducing the hottest new smartphones at unbeatable promotional prices – but we all know promotions are temporary.”

As a result, the cheapest T-Mobile iPhone 5 won’t have a total cost of $579 anymore, but will jump up to $629, including the $20 monthly payments for 24 months. There’s nothing illegal about that. But if T-Mobile did intend that this was temporary pricing when it first advertised these prices, the fine print must have been really small. And that’s disappointing.

The carrier’s posture since it first announced changes to its business model has been concentrated on being different and to standing out from its fellow U.S. carriers. But this pricing change comes off like nothing more than an advertising bait and switch. And there’s nothing different about a U.S. wireless carrier that gives its customers reasons to complain.

This post was updated with a comment from T-Mobile at 2:05 p.m. PT.