T-Mobile and MetroPCS Expand Unlimited Data; Verizon Wireless Shared Data Plans Doing Well, Analyst Says
Two mobile carriers are set to expand their use of unlimited data plans, even as a new analysis shows Verizon Wireless’s shared data plans are doing well and AT&T is set to begin offering plans of its own. T-Mobile announced Wednesday that it will begin offering a new unlimited data plan option starting Sept. 5 that eliminates connection throttling. Meanwhile, MetroPCS announced late Tuesday it’s offering a new promotional rate on its existing unlimited data plan.
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The new T-Mobile plans will cost a subscriber an additional fee on top of its existing plans -- $20 per line on the “Value” voice and text plan or an additional $30 per line on the “Classic” plan. In other words, the new unlimited data added to the value plan would cost $69.99 and the classic plan would cost $89.99, T-Mobile said (http://xrl.us/bnms4c). MetroPCS is offering what it says is a limited-time rate on its unlimited voice, text and data plan -- $55 a month for a single line and $50 for each additional line. MetroPCS’s unlimited plan previously cost $70 per month, the carrier said (http://xrl.us/bnmop2).
T-Mobile is introducing its “truly Unlimited” plan because that is a product consumers want, said Kevin McLaughlin, T-Mobile’s vice president for marketing. “Consumers want the freedom of unlimited 4G data,” McLaughlin said in a news release. T-Mobile lost a net 205,000 subscribers total in Q2 and saw the number of contract-based subscribers plunge by 557,000 -- losses that were up year-over-year from 2011. The carrier was also the only one of the Big Four that had a year-over-year drop in monthly fees from contract subscriptions during the quarter.
The T-Mobile plan announcement is a “true shot across the bow” at Sprint Nextel, said Wells Fargo analyst Jennifer Fritzsche. Sprint has long marketed its own “Simply Unlimited” plan. T-Mobile remains the only Big Four carrier not to carry the iPhone, and that will put it at a disadvantage, Fritzsche said in a report to investors. “Obviously this could change with the upcoming iPhone refresh (which is strongly believe to support the AWS band),” she said in the report. “Even if it gets the iPhone, we still believe T-Mobile has much work to do. While we never like to see directional downward pricing moves in the industry, we believe T-Mobile felt the need to make some change in order to attract attention.” T-Mobile remains on the slower 4G HSPA+, though the carrier claims the connection speed can reach 42 Mbps in some markets. T-Mobile plans to start offering 4G LTE in 2013.
T-Mobile took a swipe at competitors Verizon Wireless and AT&T in its announcement for its “truly Unlimited” plan. “We're big believers in customer-driven innovation, and our Unlimited Nationwide 4G Data plan is the answer to customers who are frustrated by the cost, complexity and congested networks of our competitors,” said McLaughlin. Verizon began offering its “Share Everything” shared data plans June 28, while AT&T is to begin offering its similarly structured “Mobile Share” plans Thursday. The Verizon Wireless and AT&T plans have drawn criticism in the past from competitors and public interest groups over pricing and concerns about a perceived lack of competition (WID July 19 p5).
Verizon Wireless plans are doing well thus far, said another new Wells Fargo report released Wednesday. Fritzsche and fellow Wells Fargo analyst Andrew Spinola did checks at Verizon stores and dealers, the report said. “These checks lead us to believe VZ has seen a very solid take rate from its Share Everything Plans,” Fritzsche said in a report to investors. “Our checks show VZ has seen solid momentum since the late June launch of the Share Everything Plans. Reps we spoke with said acceptance of the plans has been greater than expected. We believe this has resulted in better gross add trends during July and thus far (in the typically slow) August. Growth has come in two ways -- both as families add more devices (namely smartphones) to their respective account and through new gross adds from non-VZ users.” Those gains are coming at the expense of the other top national carriers, the report said. “It is our sense that trends vs. VZ have become harder for the likes of AT&T, Sprint and TMobile,” Fritzsche said in the report. “While AT&T will be rolling out its own version of shared data plans later this week (on 8/23), we believe VZ has had a first mover advantage during this 2 month window before AT&T goes live.” That advantage came in part because of Verizon’s advantage in LTE deployment -- the carrier had LTE live in 337 markets by the end of Q2, covering nearly 75 percent of the U.S. population, the report said.