T-Mobile, Sprint pit new unlimited data plans against one another

T-Mobile announced its latest uncarrier move, unveiling a streamlined offering of unlimited data plans. And Sprint was very quick to follow.

“T-Mobile One,” as the new plan is branded, offers a single line of unlimited voice, text and LTE data for $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.

Sprint, meanwhile, introduced “Unlimited Freedom,” which offers a single line of unlimited everything for $60 a month, with a second line available for an additional $40 a month. As FierceWireless and Wave7 Research reported last month, Sprint began testing its unlimited plans in a handful of markets several weeks ago.

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Both new plans are available to new and existing customers, the carriers said, and T-Mobile plans to extend its offering to prepaid users at some point “in the future.”

And both plans come with noteworthy restrictions. T-Mobile One limits video delivery to 480p, just as its zero-rated Binge On offering does, and users who exceed 26 GB of data during a billing cycle – the top 3 percent of data-consuming customers, according to the carrier – may be throttled during times of network congestion.

Meanwhile, Sprint’s unlimited plan also limits video to 480p; it also limits music to 500 Kbps and gaming to 2 Mbps. And neither plan includes unlimited tethering – Sprint’s includes 5 GB of tethering, while T-Mobile sells 5 GB for $15.

Despite those constraints, unlimited data offerings are sure to increase traffic on the networks of both T-Mobile and Sprint. T-Mobile continually dismissed those concerns, though, saying it designed its network for data while its competitors’ networks were built to support voice services.

“This (network) was built for this kind of untethered usage,” T-Mobile CEO John Legere said during a media call this morning. “For at least two years this has been part of where we’re headed.”

T-Mobile CMO J. Andrew Sherrard echoed Legere’s thoughts, citing the success of Binge On. T-Mobile’s zero-rated video offering enables users to view content that has been “optimized” – or downgraded – for mobile devices without overly taxing the network. And Sherrard noted that “well over 60 percent” of T-Mobile’s voice traffic is routed through its LTE network, enabling the carrier to devote more of its network to data.

“We have had Binge On for the last year or so, and from that experience we’ve been able to see exactly how usage impacts our network,” Sherrard said. “We wouldn’t be making this move if we didn’t have the experience and the confidence that our network can handle it.”

Sprint’s new offering is cheaper than T-Mobile’s for one or two lines, but the value proposition for T-Mobile One increases as customers add more lines. The nation’s third-largest carrier is clearly targeting families with multiple lines using multiple devices.

“Our postpaid business is family plans; I mean, the vast majority is family plans,” Legere said. “Single lines are a small minority of our business.”

Both new plans evidence a resurgence of the unlimited data offerings that were once an underpinning of the U.S. wireless industry. Carriers moved away from unlimited data as LTE networks came online and usage ramped up, but AT&T re-introduced an unlimited data plan in January for customers who also subscribe to DirecTV. Verizon has said repeatedly that it isn’t interested in offering unlimited data, but the nation’s largest carrier may be forced to reconsider its position if consumers find the new plans from T-Mobile and Sprint compelling.

Sprint’s new plans launch tomorrow, while T-Mobile’s offering will be available September 6.

For more:
- see this T-Mobile press release
- check Sprint’s new plans

Related articles:
Sprint quietly testing unlimited data starting at $60 a month
Verizon's Shammo: We're interested in ad revenues, not unlimited data plans
Mun: Unlimited data plans are back but will they stick around?
AT&T resurrects unlimited data offering at $100/month, but only for its DirecTV subscribers

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