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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.

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RE: Unlimited Data
By JasonMick (blog) on 5/24/2011 10:18:45 AM , Rating: 3
So if I were Judge Judy, I'd say you were guilty as charged, but they are certifiably irresponsible and ill-natured and don't deserve a penny or your continued patronage.

If I were running the place and didn't want to be perceived as a vampire sucking money from my customers, I would automatically shut off the service once a certain limit was reached (could be set by the customer) but I should not give out so much money knowing that I might not be able to 1) collect all the money and 2) retain a typically good customer.

Exactly, that's my point.

I owed Verizon that money and I paid them immediately once they offered me the settlement terms for my overage.

But I also quit that blood sucker as soon as I could.

Charging >40x your rate for overage data is abusive.

If it's REALLY that expensive you should just cut off customers' connections or offer special connections that allow for overages for select customers who would actually expect and be willing to pay for them.

RE: Unlimited Data
By MrBlastman on 5/24/2011 11:39:47 AM , Rating: 2
You're nice. I wouldn't have paid them. Instead, I would have told them to piss down a river. Yeah, it mighta been a hit on my credit, but, whatever. Sometimes, the principle of the thing is worth more than a great score. Besides, if you understand how credit works you could get the score back up without too much effort (though the blemish would stick around for several years).

Someone needs to stand up to practices like this. In no way is it fair nor equitable for a phone company to knowingly sell an unlimited plan for 100-200/month, then have another user go way over on their limited plan and bill them over 4 grand. It just doesn't make sense, both from a customer service standpoint and from a logical point of view.

To me, it smells more like greed than anything. It also to me looks like they'll bait the customers with pseudo-promises with the sly hope that they might slip up and tiptoe out of bounds--and when they do, fell a tree on them. Yes, I realize they are in business to make money, but, at some point any reasonable company should draw the line between fair practice and extortion.

So, in your case, meeting you somewhere around the unlimited price plan for that month and at most, double it would seem to be a fair penalty. Unfortunately, as you mention, it was your second offense and not your first so that might be some of the reason why they tried to suck you dry.

I'm waiting the day for a situation like this to make it up the judicial ladder for a ruling in a higher court. As we all know, it will NEVER see the hands of Congress in a way that will benefit us. All of their pockets have been stuffed with cash already by the telecoms. Our last bastion of hope here is due process through the courts.

RE: Unlimited Data
By The Raven on 5/24/2011 2:55:34 PM , Rating: 2
You're nice. I wouldn't have paid them. Instead, I would have told them to piss down a river. Yeah, it mighta been a hit on my credit, but, whatever.

Yeah, anyway it won't matter after the Rapture <cue dramatic groundhog>!

RE: Unlimited Data
By cmdrdredd on 5/25/2011 12:53:17 AM , Rating: 2
Charging >40x your rate for overage data is abusive. If it's REALLY that expensive you should just cut off customers' connections or offer special connections that allow for overages for select customers who would actually expect and be willing to pay for them.

They should be forced to stop this practice. If someone hits a cap, cut them off and offer them a package they can then buy that will give them more allotment. I never use my cell network all that much. I'm always near WiFi somewhere, hell even McDonalds has a WiFi network you can use. If not, I sure am not gonna try downloading a movie or something like that. I'll wait until I'm at home, nice and comfy on my home internet connection which is capped too (comcast). However, I've never gone above 80GB down and I average just about 4GB up. That's with 5 Computers, my iPad, occationally my Phone. My family never uses all that much.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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