T-Mobile tries out $50 unlimited wireless plan
T-Mobile USA, the fourth-largest cell phone operator in the U.S., is launching new service promotions in an effort to keep long-term customers and attract new ones.
The company plans to offer a special $50 per month unlimited voice plan to longtime customers in San Francisco, initially. It will also offer new customers who switch from a competitor a $135 rebate, Reuters reported Thursday.
T-Mobile's new plan will only be available to San Francisco customers who have used its service for 22 months or more, according to a T-Mobile representative who spoke to Reuters. An analyst told the wire service that the plan will likely go nationwide soon.
The promotions come as T-Mobile faces stiff competition from the three other major cell phone operators in the U.S. During the fourth quarter, AT&T and Verizon each added customers. AT&T added 2.1 million customers, including 1.9 million iPhone users. Verizon Wireless added 1.4 million new subscribers in the fourth quarter.
T-Mobile USA also added customers in the fourth quarter, but its figure was considerably lower at 621,000. It was also down from the previous quarter's figure of 670,000 new subscribers, and down considerably from a year earlier when it added 951,000 subscribers in the fourth quarter of 2007.
The bulk of T-Mobile's new subscribers came from prepaid accounts, as the total number of customers signing up for contracts slowed compared with previous quarters.
Meanwhile, Sprint Nextel, which reported fourth-quarter earnings Thursday, continued to lose customers, shedding 1.3 million customers during the fourth quarter.
The results from the four major carriers suggest that higher-value customers, who enter contracts and generally generate more revenue per month, are gravitating toward the two biggest carriers, rather than T-Mobile or Sprint.
T-Mobile and Sprint seem to be duking it out for value customers, which is where these new promotions from T-Mobile are targeted. In fact, it looks as if T-Mobile's marketing may be in response to a new plan that Sprint's prepaid brand, Boost Mobile, launched in January. Boost is offering an unlimited mobile plan for $50 a month. During Sprint's earnings conference call on Thursday, executives for Sprint said the service is off to a good start.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Here are the J.D.Power ratings of the big cell companies...
http://www.jdpower.com/telecom/ratings/business-wireless-ratings/large/sortcolumn-0/ascending/page-2#page-anchor
(fyi, if links are blocked, it shows VZ far in the lead)
On the flip side, the decent chunk of money being thrown at enticing new subscribers seems to be a double-edged sword. It isn't really large enough to offset most ETF costs for "switchers"; and there are also subsidy costs associated with the handset once the account is created. Coupling two fairly large incentives at luring subscribers will eat away profit from new members while the $50 voice plan will eat away profits from once high-margin subscribers. Am I the only one here that thinks deals like this should require 3-4 year contracts? Would you be willing to stick with a provider for 4 years if you were offered $350~ in handset and switch discounts?
Side note-- Verizons' new Friends & Family plan is a direct attack at T-Mobiles' value added "My Faves".
I do not envy T-Mobile right now; they have to redefine their model, attack larger and better funded competitors head-on, stop the hemorrhaging of subscribers, quickly add subscribers, and to top it off- create traction in the quickly growing smart phone segment. AT&T add 2.1m subscribers, of those 90% were high-profit lucrative iPhone users. This trend must reverse if T-Mobile is to survive.
As for the iPhone, I am waiting for the 3rd Generation iPhone. By then I am hoping Apple might include the basic functionality on any smart phone - COPY AND PASTE.
- by sgornick February 19, 2009 9:15 PM PST
- I only give out my GrandCentral number and then have it ring my cell phone as well as my landlines. So when I get a call while at home or office I am not burning up minutes.
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(18 Comments)I would drop to a plan that had a small bucket of minutes but when I travel (and don't get incoming calls using my landlines) I bust through the minute allotments on the lower plans, and one month of overage charges more than offsets a years worth of savings from a smaller bucket. Sure wish T-Mobile had rollover minutes.