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.
RELATED: Sprint CEO calls T-Mobile CEO a ‘con artist,’ accuses rival of copying new unlimited data plan
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.
https://www.youtube.com/watch?v=L-RW9Q7zl1E
“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?’ ”
[Related: Sprint CEO calls T-Mobile CEO a ‘con artist,’ accuses rival of copying new unlimited data plan]
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.