T-Mobile rolls out cheaper tier of unlimited service

T-Mobile store
T-Mobile now offers a less expensive unlimited plan. (Mike Mozart / CC BY 2.0)

T-Mobile introduced a less expensive version of its unlimited plan, offering four lines of no-frills service for $120. The plan essentially is the least expensive of T-Mobile’s three unlimited options, and the launch of the offering comes amid similar tiered-pricing strategies from the rest of the nation’s wireless operators.

T-Mobile Essentials “is designed for those who say they just want the basics: unlimited talk, text and smartphone data in the U.S.,” T-Mobile said. The plan will be available Friday and costs $60 for a single line, $30 for the second line and $15 per line for lines 3-6, plus taxes and fees with autopay. Interestingly, T-Mobile said it will throttle Essential customers during times and in places with heavy network demand.

T-Mobile’s Essential plan sits below the carrier’s “One” plan that includes a Netflix subscription with two or more lines of service, Gogo in-flight Wi-Fi, international roaming and other goodies. T-Mobile’s most expensive plan is its “One Plus” that includes all that plus more hotspot data, HD streaming, caller ID and more.

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T-Mobile’s move to a tiered pricing structure for its unlimited options follows similar moves by the rest of the nation’s wireless operators. However, Sprint, AT&T and Verizon essentially moved in the opposite direction by each adding a more expensive tier of service.

For a single line of service, T-Mobile’s new Essentials unlimited plan sits just above the carrier’s cheapest MetroPCS prepaid plan, which goes for $50 for the first line. For one line of service, Sprint’s cheapest unlimited option, Unlimited Basic, costs $60 for one line. AT&T’s cheapest unlimited option, called Unlimited &More, costs $70 for one line of service. And Verizon charges $80 for the first line of service on its cheapest “gounlimited” plan.

T-Mobile's new plan may serve to continue to drag down the carrier's average revenue per user. The carrier's branded postpaid phone ARPU was $46.52 in the second quarter, a decrease of 0.3% from the first quarter and 1.2% from the same quarter a year ago.

The release of T-Mobile’s new plan also comes just a few days after the carrier said it now expects to acquire more new customers during the course of 2018 than it previously expected. Specifically, the company said it now expects to gain branded postpaid net customer additions of between 3 million and 3.6 million—figures up from the 2.6 million to 3.3 million guidance that the company released earlier this year.

T-Mobile released its new guidance with its second quarter earnings, showing a gain of 686,000 branded postpaid phone net customers during the quarter—a figure higher than most analyst expectations and well beyond what T-Mobile’s rivals reported during the second quarter.