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T-Mobile is "choking" its customers unlimited data connections, ditching unlimited allowances for a new pricing scheme. Its prices beat AT&T, but come up short versus Sprint, who will soon be the only carrier with unlimited data.  (Source: FHM)
T-Mobile family plan is $30/month more than Sprint, single line is $20/month more, and lacks unlimited data

With an acquisition by AT&T, Inc (Tseemingly impending, many customers of Deutsche Telekom AG's (DTE) T-Mobile USA phone carrier are already jumping ship.  T-Mobile USA yesterday announced new pricing that may give some a bit of extra incentive to stay, while giving others all the more reason to jump ship.

I. The Cap

The bad news is that T-Mobile has officially killed its "unlimited" data plan.  In that regard T-Mobile is following in the footsteps of AT&T, who ditched unlimited data plans last June.  

Verizon Communications, Inc.'s (VZ), the nation's largest carrier (before the T-Mobile merger closes, at least) with 104+ million subscribers will also phase out its unlimited data plan this summer, and has already started capping data usage on its 4G LTE network.  Like T-Mobile, Verizon will pad this blow with new family options.

T-Mobile's new tiered data plan offers 200 MB for $15 USD/month or 2 GB for $20 USD/month.  T-Mobile's tier extends higher, though with a 5 GB per month allowance for $30 USD/month, or a 10 GB allowance for $60 USD/month.

Rather than imposing overage charges, T-Mobile is merely bumping the offender's connection down to 2G and letting them languish at slow data speeds until the billing quarter is over or they pay to upgrade their data plan.

To be fair, T-Mobile's "unlimited" data might not have been so unlimited after all.  The carrier was caught last August throttling its unlimited plan connections and sued in California court.  After the news broke, T-Mobile confessed that it indeed intended to throttle "unlimited" connections if they were used past 5 GB.

II. Family Plans

To soften the blow of killing unlimited data; T-Mobile is unveiling some pretty competitive family deals.  

Individual plans currently have tiered pricing for voice allowances of 500, 1,000, or unlimited minutes.  The new family plans will have voice allowances of 1,000, 2,000, or unlimited minutes.

Similarly, the individual plan offers unlimited texts for $10 USD/month; the family plan will offer unlimited texting for $20 USD/month.  Similarly, the data plans cost twice as much when shared on a family plan.

A family plan starts with 2 lines, but costs $10 USD/month to add more lines.  Up to 5 lines can be on a single family plan.

The results are a fairly competitive pricing scheme that narrowly beats AT&T in pricing (for example, family plan texting costs $30 USD/month on AT&T).  It still remains to be seen how the plan stacks up against Verizon's updated rates, which it plans to unveil this summer.

III. 4G Where Art Thou?

We've said it before and we'll say it again, no matter how much T-Mobile wishes it, its "4G" isn't true 4G.  Rather its a 3.5G tech (HSPA+) rebranded by clever marketers.

T-Mobile's HSPA+ network fails to deliver the full speeds promised by the HSPA+ specification, much as current true 4G wireless networks from Verizon and Sprint Nextel Corp. (S) do.  But as the base HSPA+ spec is significantly lower than the 4G spec, real world imperfect HSPA+ generally is slower than real world imperfect 4G (LTE, WiMAX).

T-Mobile's pricing certainly makes it more attractive than AT&T, who is also putting off the upgrade to true 4G, opting to rebrand its own HSPA+ as 4G as well.  But the plan may seem less attractive when Verizon unveils its own pricing on true 4G data.

IV. Sprint -- The Last Hope

All the market movement leaves Sprint as the last hope for unlimited smartphone data.  

Sprint is arguably the best deal on the market, offering unlimited talk, text, and data (+4G) for $99.99 USD/month.  

In many regions you'll pay at least $35 USD in local taxes and fees, so your real world phone bill with Sprint will end up at around $135 USD/month for a connection with 4G.  By contrast a non-4G, 10 GB capped connection, with fees will be around $155 USD/month on T-Mobile ($120 USD/month pre-fees).

T-Mobile's family plans also look even more miserable in the face of Sprint's.  At 2-line unlimited talk, text, and 10 GB data family plan without 4G will cost you $220 USD/month pre-fees on T-Mobile.  That same plan will cost you $190 USD/month, pre-fees on Sprint.

So Sprint’s plans give you unlimited data, true 4G access in some reasons, and cost $20 USD less for individual plans and $30 USD less for family plans.

But if you needed any more incentive to ditch T-Mobile, Sprint is offering $125 USD to customers who switch from a rival carrier.

All of this sounds somewhat like an ad or promotion, but it's just the plan facts -- Sprint is far and away the most affordable carrier and the only carrier to still be fighting the good fight with unlimited data.

Now there are a couple caveats -- in some regions Sprint's network isn't quite as strong as Verizon and AT&T (the same could be said of T-Mobile).  Note that in some areas the reverse is true, but nationwide AT&T and Verizon tend to be strongest in coverage.  Also Sprint's executive leadership has suggested that they may impose data caps at some point, though for now they're content to leave their connection uncapped.

Sprint current has only 51 million customers, far less than the 129.8 million that T-Mobile + AT&T have and 104 million on Verizon.  But it would seem likely that some customers at least who had stuck with T-Mobile for the free data may jump ship to Sprint.

Comments     Threshold

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RE: Unlimited Data
By theapparition on 5/24/2011 9:09:01 AM , Rating: 0
I went to the gas station the other day, and pre-paid for 5 gallons. But when filling up my car, I walked away (I'm pretty busy) and when I got back, I found that I had pumped 14. Shame on them for not cutting me off. No way am I paying for the extra fuel.

This is how I read it, or in other words:

It's not my fault. I didn't read the fine print. They should monitor me and control my usage. I'm a helpless wheenie who can't take responsibility for my own actions. Does that about sum up your rant?

RE: Unlimited Data
By JasonMick on 5/24/2011 9:23:28 AM , Rating: 2
It's not my fault. I didn't read the fine print. They should monitor me and control my usage. I'm a helpless wheenie who can't take responsibility for my own actions. Does that about sum up your rant?

Read my above response to fit.

I take full responsibility for the overrage. I made a stupid, but innocent mistake. I d/l'ed a 1.5 GB package, but due to the uploads, ended up accruing significant usage overnight (particularly surprising as my connection was typically slower than that...)

That said, Verizon was offering me 5 GB for $60 so if they were reasonable they would have billed me $180. Or let's say they wanted a premium -- they could have charged me $120 per extra 5 GB for a total of $300. I would have been frustrated, but would have paid and probably have stuck with them.

But trying to charge me 40x the rate I was normally paying is abusive.

Now I signed the contract so that's my fault, but my discovery of how eager they are to abuse customers has led me to take my business elsewhere. That's the free market (thank God for the free market, btw).

I'm simply telling my story to give some perspective on how Verizon screws people.

To borrow your gas analogy, let's say you paid $4 per gallon for 5 gallons of gas, walked away and then came back and realized your tank was full with 14 gallons. Only rather than $4 per gallon, the rate has now jumped to $192 per gallon. So your bill is $1,728 USD. Would you be upset?

Would you pay? You'd have to, or get a lawyer. But I'm guessing you wouldn't go back to that station...

RE: Unlimited Data
By DJ Brandon on 5/24/11, Rating: 0
RE: Unlimited Data
By wempa on 5/24/2011 12:51:24 PM , Rating: 2
This is my main concern with data limits. I want them to provide a way to cut me off and notify me when I have hit my limit. I don't want to have to keep checking my usage because you could very quickly hit that limit, regardless of what your previous usage for the month has been. I agree with you that the amount they charged you was absurd and I'd sure as hell leave them after that.

RE: Unlimited Data
By SilthDraeth on 5/24/2011 11:44:28 AM , Rating: 2
Except if you prepay for 5 gallons, the gas meter cuts you off at 5 gallons. You can't prepay for 5, then fill up a 100 gallon tank. Or even 14 in your scenario. Strawman argument is strawman.

I never did understand from a customer point of view, why banks allow you to overcharge on your debit, considering fund verification is done when you swipe your card... Or why cell phone companies let you go over your minutes. That is one advantage of the prepaid cell phone model. You pay for 5000 minutes, or 500 minutes, or 2gb of data, and if you hit that cap, by golly your service cuts off until you buy more!

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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