With Verizon Wireless and AT&T piling on more restrictions to their data plans, T-Mobile USA is going the opposite route with a new truly unlimited plan.
Starting September 5, T-Mobile will take a page out of Sprint Nextel's playbook and offer a truly unlimited data plan -- one without any caps, throttled connections, or overage charges.
T-Mobile says that customer demand has driven the change, but the move comes after Verizon and AT&T have both moved away from unlimited plans and focused on capped shared data plans that have irked some consumers with their complicated options. T-Mobile argues that the offering is superior to Sprint Nextel, which also offers a fully unlimited data plan, but lacks the same coverage for high-speed wireless services.
"We think it's counter-punch to every option that's out there," said Harry Thomas, director of segment marketing for T-Mobile.
T-Mobile is a distant fourth-place among the national carriers and needs every edge it can get to catch up. The company has seen its contract customers defect, either moving up and signing a contract with one of the other nationwide carriers, or moving down to one of the more affordable prepaid options.
Given the attention that data limits have gotten, T-Mobile could see some customers giving it a second look. Sprint has already said its unlimited plan has helped set it apart, particularly when paired with the iPhone.
T-Mobile is one of the few carriers that doesn't sell the iPhone, but it offers a micro-SIM card that allows consumers to bring unlocked iPhones from rivals.
The move to unlimited seems to fly in the face of the carrier's rhetoric about capacity constraints -- arguments it made when it was poised to be acquired by AT&T. But Thomas said T-Mobile is working to ensure there is enough capacity for its users. In addition to obtaining spectrum from AT&T as part of the break-up fee from the failed merger, the company is planning to swap spectrum with Verizon Wireless to improve coverage and is investing $4 billion in improving the network.
There are some restrictions. Customers can only choose to pair a smartphone with the unlimited option, and the mobile hotspot feature, which can connect other WiFi-enabled devices, isn't available under the plan.
T-Mobile will keep its current line-up of plans with their restrictions. When a certain level is reached, T-Mobile will slow down the connection to a crawl, a practice known as throttling. But under its premium 5GB and 10GB plans, the hotspot feature is included.
The unlimited data plan costs $30 a month when bundled with a voice and text plan, which range between $49.99 and $59.99 a month, depending on whether the customer wants 500 voice minutes or an unlimited voice plan. Under its "value" no-contract option costs $25 on top of a bundle of voice and text messages, which ranges between $39.99 and $49.99.
In comparison, Sprint's unlimited data plans for smartphones range between $79.99 and $109.99, depending on the number of minutes available.
Regional prepaid carrier MetroPCS, meanwhile, introduced yesterday a similar no-strings unlimited plan for $55, although it was described as a promotional offer with no set expiration date.
The T-Mobile plan will be available to existing and new customers, Thomas said, adding that this wasn't a promotion, but a permanent option.