T-Mobile puts the finishing touches on its 5G growth engine

T-Mobile is now offering a free 5G phone alongside promises of cheaper 5G services than the competition. The operator's announcement may represent the final piece of its 5G puzzle.

Mike Dano, Editorial Director, 5G & Mobile Strategies

April 7, 2021

5 Min Read
T-Mobile puts the finishing touches on its 5G growth engine

Ever since the close of its merger with Sprint last year, T-Mobile has been promising that it will lead the 5G marketplace. On Wednesday, the operator unveiled what are likely the final details of its strategy to get there.

During an "uncarrier"-branded media announcement, T-Mobile said it would give a free 5G-capable Samsung Galaxy A32 smartphone to basically everyone, whether they're T-Mobile customers or not. The Galaxy A32 supports T-Mobile's lowband 600MHz and midband 2.5GHz 5G services, but not 5G in the millimeter wave (mmWave) spectrum bands.

The phone

The details of T-Mobile's offer are important: To get the new Galaxy A32, customers must trade in an existing, working phone – but it can be any kind of phone, including a cheap 3G flip phone. Samsung sells the new Galaxy A32 for $279.99, which means that T-Mobile will recoup the cost of the phone over the course of a two-year customer agreement.

To be clear, such an offer isn't necessarily groundbreaking. The financial analysts at New Street Research pointed out that T-Mobile's Galaxy A32 subsidy is "fairly typical" for such phones. And analyst Jeffrey Moore, principal of Wave7 Research, noted that T-Mobile's prepaid business, Metro by T-Mobile, has been offering a free OnePlus Nord N10 5G phone since January.

But that's just the phone portion of T-Mobile's offer. The carrier is also promising to provide unlimited 5G data services at the same price that Verizon and AT&T charge for limited data services.

The plan

Here again, the details are important: According to PCMag, T-Mobile is offering its "Essentials" unlimited 5G plan, which is its cheapest unlimited plan. Unlike T-Mobile's more expensive "Magenta Max" unlimited plan that offers all kinds of bells and whistles, T-Mobile's Essentials plan offers mobile hotspot data at 3G speeds, and it may slow customers' smartphone speeds after they consume more than 50GB of data in a month.

So, is T-Mobile's Essentials plan cheaper than the offerings from AT&T and Verizon? The answer is: kind of.

T-Mobile's unlimited Essentials plan costs around $60 per month for one line of service. Verizon's cheapest limited data plan offers 5GB per month for $55 (and its cheapest unlimited plan starts at $70 per month). AT&T's cheapest limited data plan offers 4GB for $50 per month (and its cheapest unlimited plan starts at $65 per month). According to PCMag, T-Mobile won't match the pricing for older, legacy limited data plans from the likes of Verizon or AT&T, only their newer plans. Finally, it's worth pointing out that all these monthly rates can be adjusted slightly based on factors such as automatic billing.

Nonetheless, T-Mobile's top-line messaging here is hard to beat: A free 5G phone and unlimited 5G service for the same price as competitors' limited data services. The New Street analysts dubbed it "clever marketing," considering T-Mobile isn't necessarily offering anything out of the ordinary but is instead packaging things in a way that sounds good.

The network

But all this is happening while T-Mobile's 5G network story crystalizes. The company offers two flavors of 5G: speedy "Ultra Capacity" 5G that works on its midband 2.5GHz spectrum and covers more than 100 million people, and slower "Extended Range" 5G that works on its lowband 600MHz spectrum and covers almost 300 million people. T-Mobile's lowband "Extended Range" 5G isn't much faster than 4G, but its "Ultra Capacity" 5G promises average speeds of 300Mbit/s – which is faster than most in-home Internet connections.

Thus, T-Mobile covers far more people with "speedy" 5G than Verizon and AT&T do. Neither AT&T nor Verizon offers midband 5G services yet, and their highband, mmWave 5G services cover only around a million people apiece, according to some estimates. The lowband 5G offerings from AT&T and Verizon are either comparable to 4G or, in some cases, slower.

Further, it's worth noting that T-Mobile's new "Great Free 5G Phone Upgrade" and "Great Unlimited Trade-Up" are just two of the operator's newest strategic efforts. The carrier is also rolling out a new fixed wireless Internet service to 30 million households, and is staffing up in rural American cities as it works to increase its market share there.

The big picture

The combination of all these efforts – ranging from T-Mobile's network upgrades to its fixed wireless efforts to its rural expansion plans – are why financial analysts generally offer a positive outlook on T-Mobile's stock. And the carrier's latest "5G for All" announcement may be the final piece of its 5G puzzle.

T-Mobile executives have been promising to get noisy about 5G ever since T-Mobile closed its merger with Sprint last year, and today's announcement appears to be just that.

"This is the moment we've been working toward since we shared our vision for a faster, more inclusive future – a vision we called 5G for All – when we announced our plans to merge with Sprint three years ago," said Mike Sievert, CEO of T-Mobile, in a release. "We're quite literally the only company that can kickstart this new era of connectivity, that has the network to upgrade America's phones, homes and small towns to 5G."

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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