T-Mobile USA Selling Phones On Installment Plans

T-Mobile USA is ditching plans centered on familiar two-year contracts in favor of selling phones on installment plans.

The company changed its website over the weekend to sell the new plans, USA Today reported. It was set to lay out the change on Tuesday at an event in New York.

T-Mobile has been losing subscribers from its contract-based plans for more than two years. It has been losing its customers to its competitors, Verizon Wireless and AT&T. T-Mobile has done better with contract-less, prepaid plans, but those aren't as profitable for the company.

Prepaid plans have lower monthly fees, but the buyer usually has to pay full or nearly full price for the phones, according to USA Today. With T-Mobile's new plans, the initial phone-buying experience won't be much different from what it's like for contract plans, but customers could save money in the long run.

T-Mobile is selling data per line in three tiers, instead of family plans that Verizon Wireless and AT&T have. The talk and text portion of the plan comes with 500 megabytes of data usage per month. Adding $10 bumps that to 2 gigabytes per month, while adding $20 provides unlimited data.

Currently, T-Mobile doesn't offer the Iphone, which is one of the most popular cell phones in the world.