On the eve of its expected LTE coming out party, T-Mobile USA is updating its value plan pricing to undercut its rivals. The self-proclaimed "uncarrier" unveiled three new data plans starting at US$50, nearly half the price of its bigger rivals, with some caveats.
T-Mobile's $50 plan includes unlimited talking and texting and 500MB of data with speeds slowed to 2G speeds after 500MB is reached. For $60, subscribers will get 2.5GB of data, and $70 gets them true, throttling-free unlimited data. Its plans increase from there in increments of $10 up to $110 for 12.5 GB per month.
On Verizon Wireless's Share Everything data plans, a comparable plan to T-Mobile's 2GB one will cost a subscriber $100. T-Mobile's contract-free plans, however, don't include a subsidized device. They will require customers to purchase a smartphone, paid off up front or in $20 monthly installments, or bring their own compatible device to the network.
Why this matters
T-Mobile is holding a press event in NYC Tuesday where it is expected to officially launch its LTE network. It has only officially revealed Kansas City and Las Vegas as LTE launch cities so far, but wireless research firm OpenSignal has picked up on LTE signals in nine other cities.
T-Mobile's value plans certainly go against the grain, but it may be challenged to convince consumers that it makes sense for them to pay for their smartphones up front, something that's not the norm in the U.S.
Sprint Nextel Corp. may be an interesting competitor here, as it is the only other operator still pitching unlimited data. Both are at the early stages of building out LTE, but T-Mobile is gaining momentum as its MetroPCS Inc. merger closes and it continues to refarm spectrum for LTE.
— Sarah Reedy, Editor-in-Chief, Innovation Generation