Reeling from a difficult first quarter that saw a large number of subscriber defections, T-Mobile USA is once again finding ways to become more aggressive on the mobile broadband front.
The operator, which lost 99,000 subscribers and saw a big drop in profit, is changing its prepaid plans to offer more generous mobile broadband options. T-Mobile's current $70 plan, which includes unlimited, voice, text and 2 GB of data, will offer unlimited data access as of May 22. And those who subscribe to the company's current $50 plan, which includes unlimited voice, text and 100 MB of data use, will see their data speeds throttled if they exceed the 100 MB limit. The throttling happens instead of a requirement that subscribers refill their plans early or purchase a $1.49 24-hour day pass.
T-Mobile, which is the subject of a proposed $39-billion acquisition by AT&T (NYSE:T), has already revamped its post-pay data plans, opting to throttle data speeds until the next billing cycle rather than charging subscribers extra fees if they go over their data allotments. In March, the operator introduced aggressive pricing plans for laptops on its HSPA+ network called the 10 GB webConnect plan that costs $85 per month and requires a two-year contract.
For the first quarter, T-Mobile saw its profit drop to $135 million, down from $362 million a year ago. T-Mobile's service revenues were $4.63 billion in the first quarter, down from $4.69 billion in fourth quarter of 2010 but consistent with the $4.63 billion T-Mobile recorded in the same quarter a year ago.
Deutsche Telekom CFO Timotheus Höttges blamed the decline in part on the "intense" competition in the U.S. market, and he pointed specifically to Verizon Wireless' (NYSE:VZ) launch of LTE devices and the iPhone.
However, the company said 9.1 million customers now use 3G/4G phones (defined as UMTS/HSPA/HSPA+ and HSPA+42 devices), which is an increase of about 1 million over the same quarter a year ago. T-Mobile said 3G/4G smartphone customers now make up 27 percent of its customers base, and 3G/4G phone sales accounted for more than 75 percent of the carrier's equipment sales revenue in the first quarter.
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