T-Mobile aims to steal business customers from Verizon, AT&T with cheaper, simpler pricing

NEW YORK--T-Mobile US (NYSE:TMUS) launched new plans aimed at business customers with a simplified rate structure that the company says will let it take away business from Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE:T).

At its latest "uncarrier" event here, T-Mobile announced pricing that is primarily aimed at the small and medium-sized business market. The company noted that 99.7 percent of businesses in the United States have less than 500 employees and 90 percent have fewer than 20.

T-Mobile CEO John Legere said that 40 percent of carriers' wireless revenue comes from business users. "They think their business is safe," Legere said of T-Mobile's rivals. "It's just not."

Currently, T-Mobile is not a major player in the U.S business market. Legere said that business customers spend $72 billion on wireless service with Verizon and AT&T, and $9 billion with Sprint (NYSE: S). "I'm attacking a business I don't have," Legere said, adding that most of that has been a result of a lack of focus, but that T-Mobile's business sales team "is raring to go."

"We're going to do to the business sector what we did two years ago to the consumer segment," Legere said. He said it is a "complete disgrace what's happening" for business customers.

Under T-Mobile's new business plans, the more lines a business adds, the less it costs per line. Each line gets unlimited voice, texting and 1 GB of data to start.

For lines 1-19, customers pay $16 per line, for lines 20-1,000 it cost $15 per line, and for lines 1,001 and above it costs $10 per line. If customers want to add more data there are multiple ways they can do that.

If customers want to add data per line they can add 2 GB for $10 per month or get unlimited data for $30 per month per line. Tablet customers can add 1 GB of data for $10 per month.

Additionally, customers can add pooled data. If customers want at least 100 GB it costs $4.75 per GB ($475 per month). If customers want 500 GB it costs $4.50 per GB and if they want a terabyte of data it costs $4.25 per GB. Businesses can add more data on a per-line basis or via pooled data and mix and match per line.

T-Mobile also announced several other business-focused programs and offerings. Legere noted more than 70 percent of families choose the same carrier that one family member uses. However, he said that other carriers don't give subscribers full credit for already being a business customer. Under T-Mobile's new "Business Family Discounts," T-Mobile will count a line of service that a business pays for as the first line, meaning subsequent lines get more of a discount. T-Mobile said this translates into a discount of up to 50 percent with the addition of second line, and that a family with just two lines will save $876 compared to AT&T and Verizon over two years.

Additionally, through a new partnership with GoDaddy, T-Mobile will offer a free .com domain and website to business customers on its new plans as long as they have at least one line with additional paid data. The plans will also include a free custom .com email addresses for businesses powered by Microsoft's (NASDAQ: MSFT) Office 365. The offer includes one business email for every T-Mobile business line with additional paid data. For a 20-person business, T-Mobile said these tools would normally cost more than $1,300 every year.

Legere rejected the idea that it is difficult to get business customers to switch wireless carriers. He said other carriers lock business customers in by bundling wireless service with other enterprise services. "When people take disparate things and stick them together and sell them in a bundle, something bad is happening," Legere said. He said wireless service is the easiest thing to unbundle in the enterprise market.

T-Mobile COO Mike Sievert said that "today is the beginning of a major disruption in the business space." Sievert said T-Mobile hopes every CIO in the U.S. will go to AT&T and Verizon and ask them why their business wireless rates are so high.

In addition to its business news, T-Mobile also announced two major consumer-focused initiatives. Under the new "Carrier Freedom" program, T-Mobile will now cover all outstanding phone and tablet equipment installment or leasing payments up to $650 per line for up to 10 lines when customers switch to T-Mobile from Verizon, AT&T and Sprint. However, customers will then need to buy new phone from T-Mobile. Businesses with more than 10 lines also can take advantage of the program, with bill credits up to $100 per line after the 10th line.

Meanwhile, under the new T-Mobile "Un-contract" plan, T-Mobile is pledging that its rates will not go up, but may go down. Further, customers with promotional pricing plans can now keep those prices as long as they are T-Mobile customers. For example, customers with T-Mobile's promotional plan last year of four lines for $100 with up to 10 GB of LTE data (2.5 GB per line) can keep that plan (until today the plan was going to drop down to 1 GB of data per line after 2015). If customers have an $80 T-Mobile plan with unlimited data, T-Mobile said rates won't change for a minimum of two years. Customers can change to other plans and the guarantee kicks in again, T-Mobile said.

For more:
- see this release on business
- see this second T-Mobile release

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