T-Mobile will shift to a single wireless plan offering unlimited data — a surprise move that the company’s CEO, John Legere, says he doesn’t believe rivals Verizon and AT&T will be able to match.
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Legere announced the new plan, “T-Mobile One,” in a video this morning. Under the new plan, the Bellevue, Wash.-based wireless company will charge $70/month for the first line, $50/month for the second, and $20/month for additional lines up to eight, if the customer has auto-pay enabled. That averages to $40/month for a family of four, the company notes.
The plan includes unlimited talk, texting and 4G LTE smartphone data.
“I declare that the era of the data plan is over,” says Legere in the video announcing the “Un-carrier 12” initiative. “We are completely destroying the whole concept of a data plan, it’s gone. We have one single offer that banishes data buckets forever.”
The new T-Mobile One plan begins on Sept. 6. The company says existing T-Mobile customers will be able to stay with their current plans or shift to the new T-Mobile One unlimited plan.
Whether the new initiative is a deal for T-Mobile’s customers depends on how much data they use. Under the company’s existing Simple Choice plan, which comes with data limits, a customer pays $95/month for the first line of unlimited data. A plan with 6GB of data costs $65/month, and one with 2GB of data costs $50/month.
By setting a higher entry-level price of $70/month, the new plan is a risk for T-Mobile. Financial analysts homed in on that risk in their questions for executives, asking if the move could reduce the company’s additions of postpaid subscribers, who pay at the end of a billing period, have better credit than their prepaid peers, and are generally considered more valuable customers.
However, T-Mobile executives said the majority of the company’s postpaid customer base is on family plans, making the $40/month average for a four-line plan the more relevant cost.
“Let’s not get too mathematical about it,” said Mike Sievert, the company’s chief operating officer, addressing questions on that topic during a conference call this morning with analysts and reporters. “This is the single most consistent thing our customers have ever asked for. Over 1 million times in social media, they’ve said, ‘Could you just set my data free?’ ”
T-Mobile says in a news release, “As with T-Mobile Simple Choice, those using the most data, the highest 3% – currently people using more than 26 GB of high-speed data per month – may see their data traffic prioritized behind other users once they cross that threshold during their billing month. As a result, they may notice relatively slower speeds but only at specific times and places that may experience high network demand or congestion.”
The new T-Mobile One plan will come with unlimited mobile hotspot data, letting subscribers use their phone to connect a computer or other device to the network, but at 2G speeds. Speaking on the conference call this morning, T-Mobile executives said a premium option will be available with a higher-speed hotspot. Update: T-Mobile says the premium hotspot option will cost $15/month extra for 5GB of high-speed data.
Wireless video will stream at 480p standard definition, and the company will charge a $25/month premium for an “HD add-on” providing higher-definition video streaming.
Spurred by the arrival of Legere as CEO in 2012, T-Mobile’s “Un-carrier” announcements over the past few years have helped the company add more than 1 million net customers for 13 straight quarters, or more than three years.
The company’s past Un-carrier moves have included unbundling the cost of the phone from the wireless plan, paying customers’ fees when they switch from another carrier, no-extra-charge roaming in Canada and Mexico, the ability to stream video and music without counting against data caps, the T-Mobile Tuesdays loyalty program, issuing company shares to subscribers, and other initiatives.