With its new plans, T-Mobile just became the carrier to beat
T-Mobile’s new no-contract pricing plans just went into effect this morning, and if they are successful as I predict they’ll be, then I truly believe that other carriers will have to do some serious soul-searching. Before I explain why, let’s look at the plans T-Mobile is offering:
- Individual plans (all include unlimited talk and text):
- 500MB (includes tethering) – $50.00
- 2.5GB (includes tethering) – $60.00
- Unlimited smartphone data with 500MB included tethering – $70.00
- Customers can purchase additional tethering data for the unlimited plan in 2GB increments for $10.00
- Family plans (all include unlimited talk and text for two lines; additional lines cost $10):
- 500MB per line (includes tethering) – $80.00 total
- 2.5GB per line (includes tethering) – $100.00 total
- Unlimited smartphone data with 500MB included tethering – $120.00 total
- Customers can purchase additional tethering data for the unlimited plan in 2GB increments for $10.00
Here’s why I think other carriers might have to start worrying, and maybe even rethinking their own plans.
T-Mobile’s new plans are incredibly simple, and there’s no chance of overages.
With T-Mobile, customers no longer have to worry about buckets of minutes or texts. There are no more gimmicks, either, like the “unlimited any mobile” plans that Sprint pioneered, the rollover minutes that AT&T has, or the calling circles that were popular a few years ago. Customers simply select how much data they want, and there’s no chance of any overages – if they go over their data allotment, customers will simply get throttled.
T-Mobile is finally being honest and transparent about phone subsidies.
Traditional cell phone plans are so expensive, precisely because it’s costing carriers like AT&T, Verizon, and Sprint a huge chunk of change to subsidize smartphones every year. And with smartphones increasing in popularity, carriers’ costs to subsidize them is definitely on the rise.
T-Mobile wants to change that, and is being honest with customers about how much these fancy phones actually cost in reality. Rather than hiding that cost in a more expensive monthly plan, T-Mobile is allowing customers to pay a small amount up front, and the rest of cost in monthly installments, interest free, over the span of a couple years. Sure, this isn’t a new concept to T-Mobile, but it’s obviously popular enough with customers for T-Mobile to make this the only option available going forward. And even though some may scoff at paying full price for anything, this has several advantages:
- Customers end up paying less over two years.
- Customers aren’t locked in by a contract – they can pay off the phone and move on at any time they want. Most of the time, the remaining cost of the phone will be less than traditional early termination fees.
- With the LG Nexus 4, Google and LG proved that it was possible to create a smartphone that people want – with high-end specs – at a full price that’s not much higher than a subsidized price. And with parts costs decreasing, many speculate that phones with even higher specs will soon cost less than $200 unsubsidized. When this happens, T-Mobile’s low-cost no-contract plans make even more sense.
Basically, it’s a win-win for both sides: T-Mobile will no longer have the huge cost of phone subsidies on its shoulders, and can instead use that money to maintain and upgrade its network. And customers will end up spending less in the long run.
T-Mobile’s network is actually really good, even though it’s still very small.
At 42Mbps, T-Mobile HSPA+ network is by far the fastest 3G network in the entire United States. And even though T-Mobile’s footprint is small, and many areas are still on EDGE, it’s hard to deny that – at least in majorly populated areas – T-Mobile has the network to beat. As T-Mobile works on upgrading the rest of its EDGE towers, refarming its 1900MHz spectrum, and launching its new LTE network, the network is only going to get better.
And let’s be honest here: how often do most people really find themselves in an area that only gets EDGE service?
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I’ve outlined some of the reasons why I think T-Mobile just might become the network to beat, but I’d love to hear your thoughts, too. Why am I right, or what did I get dead wrong? Leave a comment below, and let’s discuss!
As a Sprint customer going on three years, I’ve watched as the network has crumbled around me, as promises of WiMAX faded away, and as LTE is still nowhere in my near future. T-Mobile, on the other hand, has blanketed my town in 42Mbps goodness. T-Mobile is looking better and better to me everyday.
