T-Mobile ponies up 5G commitments for low income families, first responders

T-Mobile has pledged new low-cost plans, free 5G service for first responders and internet access for 10 million households. (T-Mobile)

T-Mobile today made its biggest public push yet to win favor for its pending merger with Sprint, announcing three new pledges that, if the deal closes, would introduce low-cost prepaid plans, free 5G service for first responders, and free broadband access to underserved households with school-age children.  

Connected and coinciding with the new pledges, T-Mobile set a Dec. 6 date for its nationwide 600 MHz 5G rollout, promising to cover more than 200 million people. Compatible devices include the Samsung Galaxy Note and the OnePlus 7T Pro 5G McLaren, which will both be able to tap Sprint’s 2.5 GHz spectrum in 2020.

Executives said the combined network will offer 14-times the capacity possible today.

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Specifically, T-Mobile pledged the combined company will offer two new low-cost prepaid plans, including access to 5G –  the first costs $15 per month for 2 GB of data and the other is $25/per month for 5 GB – with annual data increases of 500 MB and no price increase for the next five years.

Its Connecting Heroes initiative is a 10-year commitment offering free 5G access with unlimited talk, text, and smartphone data to all first responders of public and non-profit state and local police, fire and EMS agency across the country.  Executives said first responders will have preemption and there will be no data caps, no throttling and no deprioritization. T-Mobile CEO John Legere said the project will put an estimated $7.7 billion back into the budgets of first responder agencies over the next decade.

Finally, T-Mobile announced a plan to help the homework gap, using the “tremendous” amount of capacity of its new network.  Dubbed Project 10Million, the combined company pledges $10 billion over the next five years to deliver up to 100 GB of free internet to 10 million eligible households with school-age children, along with a free mobile Wi-Fi-enabled hotspot and the option to purchase Wi-Fi enabled devices like PCs and tablets at the company’s cost. Like the other commitments, all customers will have access to 5G service.

Verizon, AT&T in crosshairs

While the timing of the announcement is clearly tied to discussions with states attorneys general, including those representing New York and California, that have sued to block the merger and are slated to start trial Dec. 9, the significant announcements also take aim at competitors.

“This was like a Walker Texas Ranger roundhouse kick,” said Roger Entner, founder and analyst at Recon Analytics. “They had something for everybody.”

In terms of the first responder offer, AT&T which has its FirstNet public safety contract, and Verizon, are clearly in the crosshairs, Entner said.

“There’s no cannibalization going on for T-Mobile, because no first responders to speak of are using T-Mobile,” he said. “There’s no disruption of value for T-Mobile and a lot of value disruption for AT&T and Verizon.”

T-Mobile’s promise of free service for first responders with preemption makes it a lot harder for AT&T and Verizon, Entner said, especially with activist investor Elliot management breathing down AT&T’s neck.

T-Mobile had previously indicated it wanted to get into the valuable public safety sector dominated by its two larger rivals, and the new offer is an amplification of that with the preemption and no-cost service, according to Bill Ho, principal analyst at 556 Ventures.

“That is huge,” Ho said of the free service offer to first responder personnel, noting the offers are purely lines, but there are upsell opportunities, for example, modernizing a firehouse. These more sophisticated enterprise services are applications AT&T and Verizon are very good at, but T-Mobile could potentially lock-in down the line, he indicated.

With the new T-Mobile, Sprint would also bring its expanded capabilities with enterprises to the table.

“Once T-Mobile grabs those accounts, then Sprint’s enterprise expertise might be able to translate that to more growth opportunities,” Ho said.  

New low-cost prepaid offers

Ho, who’s been tracking prepaid, also pointed to the new low-cost service offers as re-energizing T-Mobile's prepaid efforts, which had slowed down in favor of a focus on postpaid. 

The prepaid plans for one will be T-Mobile-branded rather than Metro by T-Mobile, which "tremendously" increases the prepaid side, he noted, with $15 and $25 plans addressing a price sensitive market. 

It's also an opportunity to get to so-called "glove-box users" often over age 50 that use limited phone service and data, and right now gravitate toward MVNOs or more expensive prepaid options than what the new T-Mobile says it will offer, Ho noted.

Entner called the $15 price point "a big attack" on the low-end of the market, and puts pressure on cable MVNOs like Charter and Comcast, which offer by-the-gigabyte wireless service for $14 and $12 per month, respectively. 

Taken together, the new announcements – geared toward families with children, public safety, and price-sensitive consumers - could put “a lot of pressure” on AGs to settle, Entner said. T-Mobile earlier this month already managed to convince two states – Mississippi and Colorado – to switch sides and drop the lawsuit.

During the event T-Mobile CEO John Legere said with confidence if the case goes to trial “we’ll win,” but the company is clearly open to reaching a settlement beforehand, and we’ll see how states respond to the new promises.

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