T-Mobile USA to Launch Unlimited Data Plan
08/22/2012| 10:26am US/Eastern
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--T-Mobile to launch unlimited data plans Sept. 5
--Plans seen as cheaper than rivals
--Carrier remains fourth in U.S., lacks iPhone
Deutsche Telekom's (DTE.XE, DTEGY) T-Mobile USA will launch an unlimited data plan, as it looks to differentiate itself and keep up with larger U.S. rivals.
The country's fourth-largest carrier has been hemorrhaging subscribers as it is the only national carrier without Apple Inc.'s (>> Apple Inc.) iPhone, the next-generation of which is expected to bring a flood of smartphone purchases later this year. AT&T Inc. (T) and Verizon Wireless, by far the biggest providers, have moved away from offering unlimited data, while Sprint Nextel Corp. (S) is strongly marketing its unlimited plans.
The new T-Mobile plans are designed to offer a cheaper option than the other carriers and, with the lack of iPhone, they continue to highlight the ability for customers to bring their own smartphone in exchange for a lower monthly fee. T-Mobile has said it has more than 1 million iPhones running on its network.
The unlimited plan will cost $20 a month when added to a Value voice and text plan, which doesn't include a device, and $30 a month when added to a Classic voice and text plan, which allows customers to buy a subsidized smartphone. The new plans are available on September 5.
For example, unlimited voice, text and data will cost $89.99 for a single T-Mobile user with a subsidized phone. On Sprint, a similar plan will cost $109.99. Under the shared-data plans from AT&T and Verizon, unlimited talk and text with 4 gigabytes of data will cost about $110 for a single user.
"While we never like to see directional downward pricing moves in the industry, we believe T-Mobile felt the need to make some change in order to attract attention with the well-advertised and promoted share-data plans by both" Verizon Wireless and AT&T, said Wells Fargo analyst Jennifer Fritzsche.
AT&T and Verizon Wireless--a joint venture of Verizon Communications Inc. (>> Verizon Communications Inc.) and Vodafone PLC (VOD, VOD.LN)--recently unveiled new pricing for mobile plans that focus on data usage and raises prices for many users. They also encourage more data consumption by allowing multiple users to share data and make it easier to add other devices, such as tablets.
AT&T, which begins offering its shared-data plan on Thursday, was the first U.S. carrier to limit users' data consumption when it announced so-called tiered pricing plans in June 2010.
T-Mobile has been outwardly critical of shared-data plans as complicated and bad for consumers.
The new plans come as carriers are positioning themselves for a busy second half of the year, with high expectations for the next iPhone and holiday purchases. The major carriers reported that upgrade activity and service cancellations in the recently completed quarter were both very low.
T-Mobile's new marketing pitch touts that it is the only carrier to offer "unlimited nationwide 4G data." The network uses HSPA+ technology, similar to AT&T, that some note is an advanced version of third-generation technology. All the carriers, however, are in the midst of upgrading their networks to LTE, a faster fourth-generation technology. T-Mobile will begin its LTE rollout next year.
Previously, T-Mobile would throttle, or slow, its unlimited users after they reached a certain threshold.
The company is trying to make up for lost time in upgrading its network after AT&T Inc.'s $39 billion bid to acquire the company fell apart amid antitrust concerns last year. Furthermore, T-Mobile is looking for a permanent chief executive after Philipp Humm resigned in June to take a job with Vodafone.
Meanwhile, T-Mobile has been steadily losing market share in recent quarters; it has shed more than 1 million net customers in the first six months of 2012 and more than 3 million since the beginning of 2011.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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