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March 19, 2015

T-Mobile's Carrier Freedom, Un-contract Shake Up Mobile Once More

Watching T-Mobile over the last few months puts me in mind of the old Avis car rental commercials that described how number two tries harder. Though T-Mobile may not be top dog in mobile service, it's certainly not for want of effort. To that end, T-Mobile recently brought out a set of new major moves to augment its position: the “Un-contract”, and “Carrier Freedom.”

The two new initiatives were introduced during an event that announced the Un-carrier 9.0, or Un-carrier for Business, plan. The Un-contract isn't a contract between the phone buyer and the company so much as it is a contract the company signs with the phone buyer. Under the terms of the Un-contract (so named because it focuses more on a promise from the company), the Simple Choice plan rate won't go up once the customer has kept a plan, with even unlimited 4G LTE customers getting a locked-in rate for at least two years.

This came about in response to news that almost half of businesses and consumers have seen what looks like a good deal turn into a nightmare after price hikes kicked in later on. Indeed, two out of three respondents in a recent study believed that, before the next two years were up, rates would likely be increased on current service. That's a move that T-Mobile is looking to head off with this development, and one that in turn should likely prove well-received.

Carrier Freedom, meanwhile, allows users to switch to T-Mobile with near impunity. One of the biggest points stopping users from making a switch is that a contract is still in force with another provider, and there are substantial penalties for early cancellation. T-Mobile, with the Carrier Freedom plan, will actually step in to pay off outstanding phone and tablet payments, up to a total of $650 per line.

This actually supplements an earlier program from T-Mobile known as Contract Freedom, where T-Mobile would pay off early termination fees (ETFs) to make the switch, a move that reportedly gave T-Mobile the edge in terms of growth. T-Mobile's growth rate became the fastest in the United States, and Carrier Freedom should only augment those gains.

Basically, T-Mobile has likely realized that most of those who want to get a mobile device with a plan have already done so, and the comparative handful who haven't either likely won't or represent such a comparatively small slice of the whole that it won't make too much difference. Thus, for T-Mobile to get ahead, it needs to break entrenched customers out of current plans and offer a better option at T-Mobile. That's a plan the company seems to be aggressively pursuing, and by all reports, it seems to be working to at least some degree. With two new initiatives in play, it may be enough to further push the company along.

Only time will tell just how well Un-contract and Carrier Freedom work in gaining new ground for T-Mobile, but if it works as well as the previous rounds have, there could be some big changes in the market to come.

Edited by Dominick Sorrentino

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