T-Mobile, Sprint add fuel to US unlimited data price war
There have been cries of mourning across the US over the past few months as the demise of unlimited mobile data plans seemed imminent, but T-Mobile USA and Sprint have resurrected unlimited plans amid consumer demand – paving the way for AT&T and Verizon to follow suit and change the industry as we know it.
The new T-Mobile One offering has done away with its bouquet of monthly packages in favor of a solitary $70 monthly plan for 6GB, down from $95 previously, but shortly after the uncarrier’s announcement, Sprint undercut it with an unlimited data plan costing $60 per month, reduced from $75. Although for a family of four, both operators are offering unlimited plans for $160 per month.
Sprint and T-Mobile purposely slow down the connections of customers when exceeding their data limits, instead of slapping them with additional fees. We feel this is a very considerate business model from the two MNOs, and for those who would rather pay the extra fee than kick up a fuss about having their connection slowed, then it’s probably best to switch networks. That’s exactly what Verizon was hoping for when it announced back in December that it would be offering customers who switch from AT&T, T-Mobile and Sprint up to $650 to cover early termination fees.
However, T-Mobile is never too far from controversy as the new offering gives subscribers the ability to bypass video compression being limited to 480p by upgrading to HD video for an additional $25 per month – a decision which is reportedly in violation of net neutrality regulations.
This had led to some backlash with claims that this is the first anti-consumer move T-Mobile has taken and a diversion from its normal consumer-centric path. Perhaps they are forgetting that Binge On allows 24 of the most popular OTT video services to travel across its network for free, without subscribers having to pay a penny.
The two smaller US operators are battling it out for third place but are increasingly putting pressure on the big boys in AT&T and Verizon – which have been making similar moves in the past few weeks.
AT&T launched an unlimited data plan for video subscribers earlier this year to boost DirecTV, and last week it revealed its new Mobile Share Advantage plans which, like T-Mobile and Sprint, slow down data usage to 128Kbps (2G speed) instead of hitting subscribers with overage charges. But AT&T’s new offering of $100 for a 6GB plan is still undercut by its smaller rivals, while Verizon’s latest move in July revealed a range of new packages – one being its $70 monthly plan which provides 8GB of data with a “Safety Mode” to throttle video.
Earlier this year, Verizon publicly shot down any rumors of plans to revive an unlimited data plan – but it quickly had a change of tack with its recent decision to scrap overage fees. This is a true testament to how giants of the wireless industry in the US are evolving and adapting thanks to disruptive moves from smaller players.
A Verizon spokesman took a rare dig at T-Mobile by saying, “a so-called ‘unlimited’ plan on such a limited network is no value at all.” But as subscribers flock to T-Mobile, the anonymous spokesman is right – it will have to invest in its network to add capacity.
Over 2m customers joined AT&T’s unlimited data plan just 2 months after it launched in January this year, according to AT&T CFO John Stephens. The plan costs $100 per month with unlimited data to users who are also subscribed to DirecTV. Stephens said this is part of the company’s plans to offer discounted bundles to those subscribed to multiple product offerings.
T-Mobile pulled in an impressive 8.3m new mobile subscribers in 2015, ending the year with 63.3m, ahead of Sprint with 58m. Verizon has 140m and AT&T 129m.
On a press and analyst call last week, T-Mobile CEO John Legere dubbed AT&T and Verizon “dumb and dumber,” adding that “two of the three other carriers have no desire to do this.” CTO Neville Ray also chimed in by saying, “there is no way on earth that Verizon and AT&T, with their overcrowded networks, can do what we’re doing.”
“Wireless customers want simple, worry-free and affordable wireless plans on a reliable network. There can be a lot of frustration and confusion around wireless offers, with too much focus on gigabytes and extra charges. Our answer is the simplicity of Unlimited Freedom. Now customers can watch their favorite movies and videos and stream an unlimited playlist at an amazing price,” said Marcelo Claure, Sprint CEO.