Light Reading
After nearly nine months of being counted out in the US wireless market, T-Mobile needs a recovery plan and it could include disruptive price cuts

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
SReedy
50%
50%
SReedy,
User Rank: Blogger
12/5/2012 | 4:45:53 PM
re: T-Mobile: How Low Can It Go?


Right now, T-Mobile caps its data and slows down speeds once it's reached. If it can't lower prices anymore, then maybe one thing it could do is bring back truly unlimited data. Then it'd have a more powerful message - cheaper than Sprint AND unlimited still. 

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.

Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (3) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
LRTV Interviews
Bob Wilson, Arsenal Legend: The Light Reading Interview

1|16|15   |   35:36   |   (3) comments


Arsenal goalkeeping legend Bob Wilson was Light Reading's guest interviewee at the 2020 Vision Executive Summit in December. See what the former soccer star and sports broadcaster had to say when he took to the stage in Iceland.
LRTV Custom TV
What MEF Third Network Initiative Means for SDN & NFV

1|14|15   |   6:13   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss discusses the importance of the MEF Third Network initiative and why it's good news for SDN/NFV industry initiatives.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
BlackBerry Wants Net Neutrality Protection – That's Just Sad
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/22/2015
Verizon Ready for Google MVNO Challenge
Dan Jones, Mobile Editor, 1/22/2015
FiOS Picks Up Pace Again
Alan Breznick, Cable/Video Practice Leader, 1/22/2015
Indiana Carrier Takes Fiber to the Farm
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/22/2015
Like Us on Facebook
Twitter Feed
Webinar Archive