T-Mobile USA Finally Gets the iPhone

Apple Inc.
Adam Jeffery | CNBC

T-Mobile USA will start selling Apple iPhone on April 12, making it the last of the national U.S. operators to sell the device.

The No. 4 U.S. mobile provider, which plans to merge with smaller rival MetroPCS Communications, on Tuesday announced its plan to sell the device at an event where it also said it would eliminate the device subsidies and two-year service contracts favored by its bigger rivals.

T-Mobile, a unit of a unit of Deutsche Telekom AG , hopes the iPhone and its new service offerings will attract cost conscious customers and give it more of a competitive edge against bigger rivals Sprint Nextel, AT&T and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

T-Mobile will offer the iPhone 5, Apple's latest model, for an upfront payment of $99.99 followed by 24 monthly payments of $20. Its bigger rivals charge $200 upfront for the device to customers who sign a two-year contract.

T-Mobile will sell the older iPhone 4 for a $69 up-front payment and a commitment to pay $20 a month for two years. It also promised smaller upfront fees for the latest smartphones from BlackBerry and HTC Corp.

Chief Financial Officer John Legere estimated that T-Mobile customers would pay about $1,000 less over two years than they would for comparable services at AT&T.