T-Mobile goes all-unlimited, kills taxes and fees for T-Mobile One users

T-Mobile CEO John Legere speaks during Thursday's media event in Las Vegas. Image: T-Mobile

T-Mobile is doubling down on unlimited data and scrapping its longtime Simple Choice plans for new users.

The operator sweetened the streamlined T-Mobile One plan it introduced just a few months ago, killing taxes and fees and giving $10 credits to subscribers who use 2 GB or less per month per line. Customers who are currently on Simple Choice plans can stay on them, but new customers will be offered only unlimited plans beginning Jan. 22.

“The mobile internet is the internet,” CEO John Legere said during a feisty, high-profile media event during CES in Las Vegas to unveil the latest uncarrier initiative. “Eighty percent of all internet use is on mobile this year, 90% of Facebook, 92% of Twitter, and 80% of shopping is on mobile. … All content is going to the mobile internet, smartphones have caused a profound shift, but here’s the problem: all carriers are still charging by the bit and the byte.”

Pricing for T-Mobile One plans remains the same: A single line of unlimited voice, text and LTE data costs $70 a month for customers with accounts that pay automatically. A second line is an additional $50, and additional lines (up to a total of eight) are $20 each. Users can also add tablets for $20 per device. And the carrier will continue to offer T-Mobile One Plus to users willing to pay an additional $15 a month for higher quality video than the cheaper plan provides.

The new perks aren’t promotions but rather permanent additions to the unlimited plans, and T-Mobile vowed customers won’t be subject to price increases unless they opt to change plans. The carrier did trot out a limited-time promotion, though, offering $150 per line for up to 12 lines for users who switch from other carriers to T-Mobile One.

The simplified plans are likely to resonate with users, multiple analysts said Thursday, which should help T-Mobile to continue its considerable momentum. The operator said it added 2.1 million net customers in the fourth quarter of 2016, marking its 15th straight quarter of more than 1 million net customer adds, and it saw 1.2 million branded postpaid net customer adds.

But while the plans may help T-Mobile grow its market share, they may also put a dent in ARPU, Jennifer Fritzsche of Wells Fargo Securities wrote.

“(T)he simplicity of this plan should be very positive in terms of attracting customers and likely will make the competition respond,” Fritzsche wrote following the announcement. “The question we have is by guaranteeing price/including taxes and fees, does this limit the average revenue per user upside of the model and make it rely more on sustaining customer growth? That said, T-Mobile clearly does this successfully as we fully expect the 933,000 postpaid phones T-Mobile added in Q4 to lead the industry by a very wide margin.”