T-Mobile US (NYSE:TMUS) unveiled a new family plan that offers each customer unlimited voice, texting and 10 GB of data, and includes a monthly price of $100 for two lines. However, the new offering dislodges an existing family plan offer from T-Mobile that doled out unlimited voice, texting and LTE data for two lines for the same price.
Under the new plan, which will be available tomorrow, each additional line beyond the first two costs $20 more per person. As a promotion as part of the carrier's latest "Un-carrier Amped" move, T-Mobile said customers can add a fourth line for free when they sign up or switch to the new plan from now through Labor Day, which is Sept. 7. T-Mobile said a family of four can get 10 GB of LTE for each person for just $120 per month under that offer.
The new 10 GB/$100 family plan is a limited-time offer, but it has no specific end date. "We will listen to customers, and based on their response, we might make it permanent," a T-Mobile spokesman told FierceWireless.
T-Mobile COO Mike Sievert had teased the new plan last week when T-Mobile launched its "Mobile without Borders" offer, under which T-Mobile will let customers make calls, texts and use data as they do in the U.S. when they travel to Mexico and Canada. The new plan is designed for customers who had been on previous promotional offerings so they could get the no-roaming feature added.
T-Mobile had a limited-time offer of two lines with unlimited data for $100 per month, with each line costing $40 per month per line. T-Mobile also had offered lines for $100 for 2.5 GB per line. The T-Mobile spokesman confirmed those plans are ending today. Yet customers on those promotional plans can keep them as long as they like or add $10 more to add Mobile without Borders, or for $20 more switch to the new plan and get the 10 GB of data per line and Mobile without Borders.
"The unlimited promotional plan required everyone on the plan to have unlimited data, so at three lines it was more expensive than what we are announcing today and most customers were using under 10 GB per month," the spokesman said. "We designed this new offer to lower costs for our customers, give everyone who wants it the option to get Mobile without Borders, and avoid customers overbuying on data."
As CNET notes, the $20 per month cost to add a line under T-Mobile's new plan is double the cost of its previous family plan. Yet customers are getting more data per month than before (1 GB typically and 2.5 GB under a promotion T-Mobile launched last year and extended). In that way, T-Mobile is emulating competitors who have offered large data buckets. T-Mobile counters, though, that it lets customers roll over unused data with its "Data Stash" program.
"While this offer will likely be dilutive to ARPU (average revenue per user), family plans tend to have lower acquisition costs and higher retention," Wells Fargo analyst Jennifer Fritzsche wrote in a research note. "TMUS had signaled in recent months that it was increasing focus on family plan customers, and this offer is consistent with that messaging."
In a series of tweets, T-Mobile CEO John Legere knocked Verizon Wireless' (NYSE: VZ) comparable 10 GB More Everything shared data plan, which costs $80 per month through July 23. "What they don't tell you is that you can't access that 10GB of data you just bought until you pay an additional 'line access fee'!!," Legere wrote.
Under Verizon's Edge equipment installment program, Verizon charges $15 per smartphone per month in access charges, raising the cost to $140 for four people, compared to T-Mobile's $120. Additionally, Verizon customers on Edge would need to pay monthly device costs.
However, T-Mobile's plans also do not include monthly device costs, which can be as much as $25 to $32 per month per device, depending on the smartphone. Yet T-Mobile also points out that each customer under the new plan would get 10 GB of data per line, not 10 GB to share with others.
AT&T Mobility's (NYSE: T) Mobile Share shared data plans offer 10 GB for $100 per month, and smartphones cost $15 per month in access charges if they are bought under AT&T's Next program, bringing the monthly cost for four lines to $160. Then, customers must pay monthly device payments on top of that if they have not brought their phones.
Sprint (NYSE: S) does not have a comparable 10 GB shared data plan, but under its Family Share Pack plans, but for a limited time Sprint offers 8 GB of shared data for $70 per month and 12 GB of data for $90, plus a $15 cost of per smartphone in access charges (so a total cost for four lines of $130 for 8 GB and $150 for 12 GB). Customers must pay then monthly device payments through leasing or an installment plan on top of that if they have not brought their phones.
- see this release
- see this T-Mobile website
- see this CNET article
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Correction, July 14, 2015: This article incorrectly stated that T-Mobile's plans generally are about $20 cheaper than Verizon's, which was based on an inaccurate comparison between the company's plans.