T-Mobile, the fourth largest cellular network in the U.S., is attempting to change the rules of the game in the telecom industry by ditching the two-year mobile phone contracts. The company introduced on Tuesday a different pricing structure in a bid to regain 500,000 postpaid customers it had lost.

"We're changing the rules," T-Mobile President John Legere said on Tuesday at a press launch in New York.

"This is an industry filled with ridiculously confusing contracts, limits on how much data you can use or when you can upgrade, and monthly bills that make little sense," he pointed out.

Under the Simple Choice scheme introduced by T-Mobile, buyers would just deal one with rate plat for different degrees of service, but with it comes unlimited data which would assure phone users of no bill shock or hidden fees.

The subscribers have a choice of the $50, $60 or $70 plan or to pay for their new smartphone at the full price up-front, but both plans allow the phone owner to leave T-Mobile at any time, doing away with the 24-month standard lock-in period.

A $50 monthly plan offers 500MB of high-speed data which once used up, T-Mobile would reduce the data rate to 2G speed for the rest of the billing cycle. The $60 plan sets the throttled data rate at 2.5GB and the $70 plan assures subscribers of unlimited data.

Customers can even bring in their own device and tap into the T-Mobile network.

The traditional 24-month mobile phone contract provides subscribers free or heavily subsidised mobile units which they actually pay off over the contract term at higher cost.

"That's on purpose," Mr Legere said on comments that the new plans that appear not to make sense, adding, "The industry is broken. And by the way, there are no rewards for loyalty."

Other carriers indicated that if T-Mobile is successful in the scheme, they may follow the model and also come up with their own promos in a bid to secure a larger cut of the mobile phone market in the U.S.

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