Light Reading

T-Mobile: How Low Can It Go?

Sarah Thomas
12/21/2011
50%
50%

T-Mobile US Inc. is getting $4 billion and spectrum as part of its breakup with AT&T Inc. (NYSE: T), but that won't earn it a spot as a real contender for wireless subscribers again. (See AT&T Drops Bid to Acquire T-Mobile and T-Mobile Gets Spectrum in AT&T Breakup.)

Instead, the fourth-largest U.S. carrier, written off by many subscribers in the nine months that the merger attempt has dragged on for, could be planning steep price cuts to regain market share. And, that could have reverberations for the entire industry, according to one analyst.

Mizuho Securities USA Inc. analyst Michael Nelson put forth this theory Tuesday, noting that an independent T-Mobile could lead to incremental pricing competition, since the value provider is losing post-paid market share to the national carriers and pre-paid market share to MetroPCS Inc. (NYSE: PCS) and Leap Wireless International Inc. (Nasdaq: LEAP).

"With the deal now dead, we believe there is increased risk for the industry that T-Mobile may pull the pricing lever and implement disruptive pricing plans in an effort to regain market share," Nelson writes in a research note.

Without the iPhone or a clear path to Long Term Evolution (LTE), T-Mobile has already started down the price-slashing road. Jim Alling, T-Mobile's COO, took to the company's blog to remind consumers about these plans once news of the merger fail broke.

"We’re offering our best plan ever -- 2 lines for $49.99 each that includes voice, text and data (including 2GB at full-speed) on each line with a new 2-year agreement," he wrote. "We also now offer a Monthly4G no annual contract plan that gives you unlimited talk, text, and web (including 100MB at full-speed) for $50.

T-Mobile claims its new value plans already represent savings of $35 compared to AT&T, Verizon Wireless or Sprint Corp. (NYSE: S). But the question is, can T-Mobile go even lower? (See T-Mobile Stems Sub Losses With Pre-Paid Plans, T-Mobile & Walmart to Offer $30 HSPA+ Plan and T-Mobile Shakes Up Pricing Sans Unlimited Data .)

Right now, the carrier isn't saying how, or if, it will change its data plans, but it will likely have to do something drastic to get back on track in the U.S. Mizuho's Nelson believes pre-paid users will be its first target, which could put pressure on its smaller competitors, as well as Sprint's four pre-paid brands.

"Increased price competition would be negative for the entire industry; however, we believe PCS and LEAP are most at risk since they compete largely on price and we would expect T-Mobile to target prepaid customers," he says.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
kaps
50%
50%
kaps,
User Rank: Light Beer
12/5/2012 | 4:45:52 PM
re: T-Mobile: How Low Can It Go?


What about trying a data-only plan that uses VoIP and no voice "minutes" to pay for? The deal they recently announced with Walmart ($30 a month, 100 minutes and 5 GB data) is a step in this direction... why not $20 or $25 for an all-data plan?


Then we'd see how "4G" the T-Mob network really is... 

kaps
50%
50%
kaps,
User Rank: Light Beer
12/5/2012 | 4:45:52 PM
re: T-Mobile: How Low Can It Go?


What about trying a data-only plan that uses VoIP and no voice "minutes" to pay for? The deal they recently announced with Walmart ($30 a month, 100 minutes and 5 GB data) is a step in this direction... why not $20 or $25 for an all-data plan?


Then we'd see how "4G" the T-Mob network really is... 

goundan
50%
50%
goundan,
User Rank: Light Beer
12/5/2012 | 4:45:45 PM
re: T-Mobile: How Low Can It Go?


T-Mo's post paid small business plans are even better. $44.99 (+$9 in taxes and standard fees) for unlimited talk, text and 5GB of data. Granted you have to pay full price for your phone on the value plans, but that still saves you a bundle over any other carrier or for that matter even Simple Mobile (TMo MVNO). Ask and recieve a free Cell-Fi repeater for improved in-building coverage for coverage weak spots. Add to that the best customer service among the major cell carriers. I'm surprised why more people don't switch to T-Mo.


Based on seeing T-Mo spectrum refarming exercies going on in the PCS band and the 2013 GSM shutoff, I think they may be going the HSPA-84 route until they can figure out the LTE transition. Not a bad option IMO.

From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
T-Mobile CEO Plays Data Traffic Cop
Sarah Thomas, Editorial Operations Director, 8/31/2015
CEO Chat With Bill Gates
Steve Saunders, CEO and founder, Light Reading, 8/31/2015
Verizon Hums a Driving Tune
Sarah Thomas, Editorial Operations Director, 8/26/2015
Time to Monetize Cable WiFi
Alan Breznick, Cable/Video Practice Leader, 8/31/2015
Like Us on Facebook
Twitter Feed
September 16, 2015
Wi-Fi First or Second?
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
The scene: Last Saturday, lunchtime, the interior of a shi-shi-foo-foo eatery in Manhattan's SoHo district.
Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
Cats with Phones
Tastes Like Fish Click Here
Please hold while I lick the phone.