T-Mobile to drop domestic overages for all plans, calls on AT&T, Verizon and Sprint to follow suit

T-Mobile US (NYSE:TMUS) will drop its overage fees for all of its domestic plans and is launching a petition to get Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and Sprint (NYSE:S) to do the same thing.

"Charging overage fees is a greedy, predatory practice that needs to go," T-Mobile CEO John Legere said in a statement. "Starting in May for bills arriving in June--regardless of whether you're on Simple Choice, Simple Starter or an older plan, we're abolishing overages for good. Period." Legere said he has started an online petition at Change.org/AbolishOverages calling on AT&T, Verizon and Sprint to follow T-Mobile and end overages.

Representatives from Verizon and AT&T did not immediately respond to requests for comment.

"Customers can sign T-Mobile's petition or they and their friends and family can sign-up for the Sprint Framily Plan with unlimited data and don't have to worry about overages or running out of data and having to purchase more during the month," Sprint said in a statement. "For as little as $45 a month, Sprint customers can get worry-free, unlimited talk, text and data on the Sprint Framily Plan while on the Sprint network."

T-Mobile already doesn't charge overages on its no-contract "Simple Choice" plans; instead, the carrier throttles the data speeds of customers on the Simple Choice plans down to 2G speeds for the remainder of their billing cycle when they exceed their data allotments. Today, the carrier is expanding that practice to the rest of its plans: Once the changes go into effect, customers on other T-Mobile plans who exceed their data allotments will have their speeds throttled down to 2G speeds for the remainder of their billing cycle.

At the end of last year, 69 percent of T-Mobile's customers were on the carrier's Value or Simple Choice plans; T-Mobile expects that number to hit 85 percent to 90 percent by the end of this year.

Despite T-Mobile's aim to end overages, there are still going to be instances where customers will need to pay more to get more data than their initial allotment. For example, T-Mobile's "Simple Starter" plan, which the carrier introduced last week, includes unlimited voice, texting and 500 MB of LTE data. Once a user reaches the 500 MB of high-speed data, the service is suspended, and customers would need to buy either a 1-day on-network data pass of 500 MB for $5 or a 7-day on-network data pass of 1 GB for $10.

The difference, though, is that other carriers automatically charge users overage fees if they use more data than they have been allotted, whereas T-Mobile customers will be able to choose whether they want to pay more.

"There are some scenarios which could still require customers to opt into additional services beyond their monthly service plans and incur additional fees such as the ones you noted in your questions," a T-Mobile spokeswoman told FierceWireless. "T-Mobile already doesn't charge overage fees for customers on our Simple Choice plan, but they are now extending that freedom from overages to customers on older, legacy T-Mobile plans for domestic calls, text messages and data usage."

T-Mobile's move won't apply to its international plans. International fees still apply, as do other fees--but T-Mobile does not classify these as overages (they include things like domestic toll calling, international toll calling, international roaming, etc.).

The overage fees other carriers charge varies by the plan. For Verizon's More Everything shared data plans, which come with unlimited voice and messaging, data overages are $15 per 200 MB on a 250 MB plan, $15 per 500 MB on the 500 MB plan and $15 per 1 GB for plans with 1 GB or more.

On AT&T's Mobile Share Value plans, which also come with unlimited voice and messaging, overages are $20 per 300 MB on the 300 MB plan, $20 per 500 MB on the 1 GB plan and $15 per 1 GB on all other plans.

AT&T, like other carriers, has tools on its website to help customers estimate their data usage so they can pick the best plan. AT&T, also like other carriers, gives customers several alerts as they near their allotments, and customers can change their data plans as often as they want to.

On Sprint's Framily plans that do not include unlimited data, Sprint charges 1.5 cents per MB above data thresholds, which are either 1 GB or 3 GB.

For more:
- see this release
- see this T-Mobile blog post
- see this CNET article

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