T-Mobile gives 'Simple Starter' customers 2 GB of data for $45/month
T-Mobile US (NYSE:TMUS) is quadrupling the amount of data customers on its low-cost "Simple Starter" plans can get per month to 2 GB for $45, just $5 more than the existing plan, which offers 500 MB of data. Both plans offer unlimited voice and texting.
The new plans will be available to new and existing customers starting Sept. 3. T-Mobile's new offer represents just the latest change the Tier 1 carriers have been making to their rate plans in an attempt to undercut each other, especially in pricing for individual customers.
However, as with the original Simple Starter plan, the new one has caveats. Once a customer reaches the 2 GB limit of high-speed data, the service is suspended, and customers need to buy either a 1-day on-network data pass of 500 MB for $5 or a 7-day on-network data pass of 1 GB for $10.
Further, the 2 GB Simple Starter plan also does not include international service packages and includes only 50 MB of data roaming. And because T-Mobile does not subsidize devices, if a customer is paying for their phone through an equipment installment plan, that monthly charge, which can be as much as $25 per month, will be added to their bill.
The new pricing comes amid continued ferment in the U.S. mobile market. Last week Sprint (NYSE: S) unveiled its new unlimited voice, text and data plan for individuals, which costs just $60 per month, undercutting T-Mobile's $80 unlimited data plan by $20. However, Sprint's $60 price does not include the cost of a phone; customers can either purchase a new phone through Sprint's Easy Pay handset upgrade program and pay for it in monthly installments, or they can bring their own phone, or they can purchase their phone at full price.
Analysts have said they expect Sprint's plan to potentially pressure T-Mobile more than Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T) because neither of the larger carriers have offered unlimited data plans for several years now and have continued to grow their subscriber bases.
Days before Sprint's announcement, Verizon launched a new plan for individual subscribers that offers unlimited voice, texting and 2 GB of data for $60 per month. The $60 plan drops down to $50 per month when customers choose Verizon's Edge handset upgrade program, in which customers pay off their phones in monthly installments and get to upgrade early. Data overage charges are $15 per GB.
In comparison, AT&T offers a plan for individual customers for $65 per month with unlimited voice, texting and 2 GB of data. However, that plan requires customers to finance their device through AT&T's Next handset upgrade plan, bring their own phone or buy their phone at full cost.
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