T-Mobile is hoping to encourage customers to sign up for new, more expensive Magenta MAX service by removing monthly usage limits.

Mike Dano, Editorial Director, 5G & Mobile Strategies

February 22, 2021

3 Min Read
T-Mobile puts premium price on 5G perks

T-Mobile introduced a new pricing plan called Magenta MAX that the operator said will not include any usage-based data limits – at least for data that is consumed on its customers' phones.

The offering is noteworthy considering T-Mobile previously slowed customers' speeds after they consumed 50GB of data in a monthly billing cycle. Other operators impose similar usage caps.

Now, under Magenta MAX, that cap has been removed.

However, T-Mobile's new pricing plan does limit the amount of data that customers can consume via their phone's mobile hotspot function to 40GB per month. After they pass that threshold, their speeds are throttled down to 3G speeds. Thus, the company's new plan – touted as "unlimited premium data" – cannot be used by customers to replace their unlimited home Internet connections. After all, OpenVault estimates US home broadband users consume around 500GB per month.

Further, there are few smartphone users who would have surpassed T-Mobile's monthly limits anyway. For example, Ericsson estimated that North American smartphone users consumed an average of around 12GB of data per month during 2020.

T-Mobile's new Magenta MAX announcement helps to clarify the operator's efforts to profit off its five-year, $60 billion 5G network upgrade effort. T-Mobile's top-tier Magenta MAX plan costs $10 more per month than its mid-tier Magenta plan. T-Mobile also offers a cheaper, bare-bones unlimited plan called "Essentials."

"Magenta MAX is just a first taste of what our network capacity allows us to do!" T-Mobile CEO Mike Sievert explained in a release. "When you're a heavy data user with a super-fast 5G smartphone, you don't want to be hit with speed bumps. It's like having a Ferrari and being forced to drive it in the school zone. Well, now it's time to open 'er up on the wide open magenta road!"

In releasing its new Magenta MAX plan, T-Mobile more firmly joins AT&T and Verizon in offering multiple tiers of unlimited service. The companies' goal is to encourage customers to upgrade from cheaper plans to more expensive plans, thereby deriving more money from them.

Verizon has already reported some success in this area. For example, the operator said fully 55% of its new customers selected its most expensive unlimited plans during the fourth quarter.

In T-Mobile's case, the operator is dangling a number of goodies to encourage customers to purchase its most expensive unlimited Magenta MAX plan, including more mobile hotspot data (up to 40GB), 4K resolution for its Netflix on Us service, and unlimited Gogo Wi-Fi service on airplanes. The less expensive plans provide fewer perks.

T-Mobile continues to offer 5G access across all three of its unlimited pricing plans. That decision may stem from its work to obtain regulatory approval for its merger with Sprint. T-Mobile argued that it should be allowed to merge with Sprint in order to provide widespread access to 5G.

Finally, it's worth noting that T-Mobile isn't the only operator to offer unfettered access to its 5G network. For example, Verizon customers who access its 5G Ultra Wideband network in millimeter wave (mmWave) spectrum also do not have any limits on the amount of data they can use. However, that network is only accessible to an estimated 2 million people.

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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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