T-Mobile prides itself on taking steps to eliminate customer pain points, but its latest move may hurt more than it helps.
T-Mobile last week unveiled plans to move to a single $70 per month unlimited offering – dubbed T-Mobile ONE – as part of its Un-carrier 12 initiative. But for the first time, it seems customers are less than thrilled about the change.
Un-carrier customers have taken to Reddit in droves to express their displeasure, alternatively calling the new plan “evil” and “disgraceful.” One thread with more than 300 comments even called for users to petition T-Mobile to cancel its Un-carrier 12 move.
“Now, everyone will be forced to pay more for less,” user MrBamHam wrote. “We need to petition T-Mobile, and we need to file complaints with the FCC, FTC, and BBB.”
“I’m currently a happy T-Mobile customer. The day they make me switch to this piece of shit plan is the day I switch carriers,” user Ectospheno said.
T-Mobile has said it is not forcing existing customers to switch plans once T-Mobile ONE is launched on September 6. However, the new plan will be the main offering for new customers.
T-Mobile supporters also voiced their ire on Twitter, including DreamHost’s vice president of Cloud Jonathan LaCour, who called T-Mobile ONE an “awful, hostile shift.”
Among customers’ chief complaints about the plan were the price increase for single line customers, the addition of charges for users who want high-definition video and the restriction of unlimited tethering to 2G speeds.
Many customers also questioned whether and how long they would be able to keep their current plans while others raised concerns about the legality of charging for an improved video stream under the FCC’s net neutrality rules.
The latter echoed comments from the Electronic Frontier Foundation, which on Monday said the video and tethering restrictions in T-Mobile’s new plan are clearly banned in the FCC’s Open Internet Order.
“Limiting the speed of tethered traffic and throttling video are both practices that violate the FCC’s rule against throttling and the principle of net neutrality,” EFF Staff Attorney Kit Walsh said in a statement.
T-Mobile argued its new offering and others like it “create more innovation and competition in the wireless industry, which is good for customers.”
Is the pushback really a shock?
For a company that has prided itself on giving its customers the choice and options other U.S. wireless carriers won’t, the backlash is perhaps unsurprising.
As pointed out by Recon Analytics’s Roger Entner, the move will make T-Mobile’s entry level price point the most expensive in the industry – particularly for single line customers. This, along with the limitations on included tethering and video quality, is proving to be a deterrent among Redditors who were thinking of switching carriers.
But the change is also galling to existing T-Mobile customers, many of whom have firmly stated their intent to remain on their current plans.
Thanks to previous offerings like Binge On, Music Freedom, roll over data and overage elimination and to the fact that T-Mobile itself admitted most customers on its 6 GB plan were not hitting their data caps, Un-carrier customers essentially already had unlimited. And the cost of that 6 GB plan is $5 cheaper than the new unlimited plan, and included the ability to turn off Binge On and stream HD video at no extra cost.
On the other end of the spectrum are T-Mobile’s current unlimited users, who pay $95 per month but receive 14 GB of LTE tethering included in that cost. The new unlimited plan only includes unlimited 2G tethering with LTE tethering available at 5 GB for $15.
Feeling the heat
For T-Mobile, the upside to all this is that a high take rate for the new plan could help drive up ARPU.
But according to BTIG’s Walter Piecyk, there is a possibility these complaints and concerns could manifest in the form of dipping gross additions in future T-Mobile earnings reports.
“It’s more surprising for T-Mobile to ‘eliminate’ lower price plans as their 3 million+ post-paid phone net additions are still a key component of the growth story and the 6GB plan seemed to be a key driver of that growth,” Piecyk wrote in a Monday research note. “We believe the elimination of entry-level rate plans could negatively impact gross additions even though T-Mobile might not be truly eliminating those plans.”
Though T-Mobile said unlimited data was the number one customer request, it’s possible the Un-carrier might rethink its singular plan strategy if the numbers don’t add up.
What do you think? Will T-Mobile walk back its unlimited-only stance? Should they?
Filed Under: Carriers
