Rumors Are True: T-Mobile to Offer Free Cell Phones

SAN FRANCISCO – Wireless carrier T-Mobile plans to give free phones to customers who sign up for group calling plans at its retail stores on Saturday — just days before rival AT&T will start selling Apple's latest iPhone.

T-Mobile said Tuesday that throughout Saturday, beginning at 8 a.m., new customers will be able to get free handsets of their choice by signing up for a "family plan," which is a calling plan that has at least two users. Current T-Mobile customers can convert a single-user plan into a family plan by adding at least one user, or adding lines to a family plan they already have. You can get up to five free phones with a single family plan, though each will come with a two-year contract.

The promotion includes T-Mobile's newest smart phones running Google Inc.'s Android operating software, such as the HTC myTouch 3G Slide, which usually sells for $180 with a two-year contract and rebate, and Garminfone, which usually costs $200 with a two-year contract and rebate. Some phones will require a mail-in rebate, T-Mobile said.

T-Mobile USA Chief Operating Officer Jim Alling expects the promotion to appeal to both existing and prospective customers.

He said the promotion, which takes place less than a week before the iPhone 4's June 24 release date, was already in the works before T-Mobile knew exactly when Apple's latest version of the popular phone would be hitting store shelves. Analysts had expected a new iPhone in June, especially after a prototype surfaced in April on gadget blog Gizmodo.

T-Mobile, which is owned by Germany's Deutsche Telekom AG, had 33.7 million customers at the end of its first quarter. This includes both prepaid and contract customers.