Feature Article

January 09, 2013

T- Mobile Morphs into the 'Uncarrier' with CES Announcement to Offer No Contract Unlimited Data Plans

Yesterday, at the 2013 Consumer Electronics Show (CES), T-Mobile USA took a firm step into what was once unfathomable by announcing what is clearly an industry first for the major carriers - that beginning today it will offer its Unlimited Nationwide 4G Data plan without the need for an annual contract. This new T-Mobile plan means that subscribers will have a true and worry-free experience with no data caps, overages or - we would expect - any bill shock.

We do wonder however if it doesn't also mean that T-Mobile is stepping fully into the abyss. If enough subscribers, and more importantly if enough "new" subscribers get on board, will T-Mobile's network be able to handle the potential strain? The open question is how far can T-Mobile go with this before it needs to begin throttling back speeds and access?

John Legere, president and chief executive officer of T-Mobile USA, already stated, back when the company announced that it would no longer subsidize the cost of mobile devices, that T-Mobile was going to become the industry's "value player." That wasn't enough for Legere, however. Now, he's come up with a new one: “As the ‘Uncarrier,’ we’re doing the unthinkable." The Uncarrier - you gotta love it! And yes, it is - or rather it now was - unthinkable. We will note, however, that Sprint has shown signs it may do something similar at the end of January 2013.

Legere goes on to say, "We’re directly confronting the frustrations of American consumers fed up with the cost, complexity and congested networks of our competitors. Our Unlimited 4G Data plan means 4G speeds, no caps and no overages on a smoking-fast, nationwide, 4G network. What this means is simply that T-Mobile customers are going to be able to enjoy everything a 4G smartphone is actually designed to do without limits and without a term contract.”

Beginning today (meaning it has already begun), T-Mobile’s Unlimited Nationwide 4G Data plan is now available without an annual contract for $70 per month. Consumers can score the deal for themselves either through T-Mobile's website, at T-Mobile retail stores or through select dealers and national retail stores. The offer doesn't stop there though. To kick off the new deal, T-Mobile is now also offering one of its newest smartphones - the LG Optimus L9, which provides a 4.5 inch display - for $199.99 with no annual contract.

In case it isn't clear, for $70 a month, subscribers can now use T-Mobile's 4G network to stream endless movies, search the Web non-stop 24 hours a day, and play online games with no fear of incurring data overages of any sort. You can make it happen right now.

Since T-Mobile introduced its Unlimited Nationwide 4G Data plan in September, the company claims that it has become by far the most popular plan choice among T-Mobile customers, with 46 percent of new subscribers opting for the new data plan in December 2012. There is no doubt that the plan will create new subscriber traffic for the company, and when one factors in that T-Mobile will support iPhones that subscribers can bring with them from competitors, it can spell a healthy run for T-Mobile's subscriber base. In total, T-Mobile customers are now streaming 32 million songs and visit Facebook 1.8 billion times per day. That should all increase dramatically.

Get a Laptop from T-Mobile and Get 200 MB of Wireless Data Free

Adding to Legere's Uncarrier promise, T-Mobile has also announced that anyone who purchases select new Windows 8 laptops through T-Mobile will also get free wireless data services. Dell and Hewlett-Packard have stepped up to the Uncarrier plate and have now partnered with T-Mobile to provide the laptops. Will this prove an effective sales strategy for Dell and HP? We're not sure.

Will it bring more subscribers to T-Mobile? The available plan offers 200 MB of free wireless service per month for two years - users gain access to T-Mobile's 4G Connect offering, so it’s the real deal on that wireless data. Of course a laptop can chew through 200 MB of wireless data in an hour, so user beware what you sign up for. Beyond the monthly 200 MB data allotment, subscribers can purchase additional data service starting at $10 for 1 GB of service. We suggest that potential users look at the deal as gaining access to 1.2 GB of wireless 4G data per month for $10 - that is still a pretty darn good deal!

T-Mobile’s new laptop partners will offer the Dell Inspiron 14z Ultrabook and the HP Pavilion dm1 laptop. A Qualcomm Gobi modem chip is necessary to enable the wireless connectivity. T-Mobile says it’s a “walk out working” type of service and simple to provision and enable. T-Mobile also expects the 4G Connect program to expand across a variety of other tablets and notebooks and will also include future Windows RT tablets and hybrids as well.

All in all T-Mobile looks to us to be positioning itself to truly deliver on its value network promise. As long as the 4G network is able to fully deliver a crisp and effective wireless experience and the network doesn't become routinely overloaded the company should do well. Clearly there will be some saturation point where we can anticipate T-Mobile needing to begin stepping back from its Uncarrier promises - but that point, given T-Mobile's existing subscriber base is likely years down the road.

It will be a very interesting ride.

Edited by Brooke Neuman

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