T-Mobile USA Inc. threw down the gauntlet over the weekend, revamping its pricing plans with a strong emphasis on attracting customers looking to get away from contracts.
The carrier, which over the past year has become increasingly dependent on prepaid customers with 80% of net customer additions during the second quarter signing on without a contract, has seen increased competition it the prepaid space from its larger rivals as well as a handful of smaller carriers offering unlimited calling plans for $50 per month or less.
T-Mobile USA’s no-contract options are grouped under its Even More Plus label. The plans have three tiers, with 500 anytime minutes, unlimited night and weekend calling and free on-network calling available for $30 per month, 1,000 minutes with the same extras for $40 per month and unlimited calling for $50 per month. Customers can add unlimited messaging to each plan for $10 per month or unlimited messaging and mobile Internet usage for $30 per month. According to T-Mobile USA’s Web site, customers are charged an additional $10 per month for data services if they select a smartphone.
These plans are slightly higher than the current least expensive no-contract plans offered by the likes of Sprint Nextel Corp.’s Boost Mobile division and Tracfone Wireless Inc.’s StraightTalk service, but in line with AT&T Mobility’s recently updated GoPhone offering.
The more interesting feature of the Even More Plus plans is that while customers do not have to sign a contract, they will have to pay full price if they want a new mobile device. For instance, the carrier’s myTouch 3G device is available for $500 without a contract instead of the $150 subsidized price associated with a two-year contract. T-Mobile USA does offer a handful of unsubsidized devices for less than $100 as well as the ability for customers to purchase just a SIM card for $7 to install in any unlocked GSM device.
T-Mobile USA customers looking for a new device, but who also to avoid a contract can select an option to make interest-free monthly payments on that device over a span of four to 20 months.
For those customers not afraid of a commitment, T-Mobile USA’s Even More plans offer subsidized handset pricing in return for a two-year commitment. Rate plans start at $40 per month for 500 anytime minutes, unlimited night and weekend and unlimited on-network calling. An unlimited option is available for $60 per month. Unlimited messaging is available for the Even More plans for $10 per month while unlimited mobile Internet services are available for between $10 and $30 per month depending on the device.
T-Mobile USA also offers family plan options for both its contract and no-contract offerings.
William Ho, research director of wireless services at Current Analysis Inc., noted the new plans could have a greater impact on Sprint Nextel as their customer demographics have the most overlap. Less of an impact is expected on AT&T Mobility and Verizon Wireless. During its third quarter earnings call today, Verizon Communications Inc. CFO John Killian said the company was underwhelmed with the new plans from T-Mobile USA and that it did not see “a need to respond to that.”
The new plans also eliminate T-Mobile USA’s once-popular MyFaves plans that allowed customers to select up to five numbers for unlimited calling. Current MyFaves customers will be allowed to continue with those plans.