T-Mobile is done with tiered data plans.
The Un-carrier on Thursday said it is scrapping all of its rate plans in favor of a single unlimited plan offering dubbed T-Mobile ONE. Rather than offering data in buckets, the new plan includes unlimited talk, text and unlimited 4G LTE data, T-Mobile said. Unlimited tethering at 2G speeds will also be thrown in.
“The era of the data plan is over,” T-Mobile John Legere said in a statement. “After Un-carrier 12, the wireless industry will never be the same again.”
The plan will come at a cost of $70 for the first line, $50 for the second line and $20 for each subsequent line up to eight lines. Additional lines beyond that can be added for $30 per month, T-Mobile said. Tablets can even be added to the mix for $20 per month.
T-Mobile said unlimited video will be offered in standard 480p definition as part of the plan, but users will be able to upgrade to HD video for an extra $25 per month per line. Though the plan is billed as unlimited, T-Mobile also noted customers who surpass 26 GB of data in a given month “may see their data traffic prioritized behind other users” and may experience slower speeds at specific times or in specific places with high network demand.
T-Mobile said the new plan will launch on September 6, at which time the Un-carrier will begin phasing out its Simple Choice Plans. Customers will not be forced off their existing Simple Choice plans, T-Mobile said.
As with all its Un-carrier moves, T-Mobile framed the change as a way to address another customer pain point. Unlimited data was the most requested item from customers, even after the roll out of unlimited video through Binge On and unlimited music streaming through Music Freedom, Legere said Thursday.
As pointed out by Recon Analytics’ Roger Entner on Twitter, the new plan will make T-Mobile the most expensive entry level price point for a single line. However, the new plan will drop the cost for families – a group Legere said Thursday makes up the majority of T-Mobile’s postpaid plans. A family of four will be able to get the plan for $160 per month, while a family of six would be able to lock down the unlimited offering for $200 per month.
Though T-Mobile COO Mike Sievert admitted during Thursday’s executive call the majority of customers were not hitting their data caps prior to the announcement, he and Legere said T-Mobile ONE was the natural next step in the Un-carrier’s unlimited push. The move, they said, builds on the work T-Mobile has done with Binge On and Music Freedom.
Legere said 99 percent of T-Mobile customers have opted to keep Binge On activated since its roll out in November.
On the capacity side, T-Mobile CTO Neville Ray said the Un-carrier has actually seen nearly a 15 percent network savings through video optimization in its Binge On offering. Those savings – as well as the experience gained from Binge On and Music Freedom – have allowed T-Mobile to reevaluate and rearrange its growth plan, he said. Ray said there was “very little to worry about” in terms of whether the Un-carrier network can handle extra traffic from the new offering.
“We have more spectrum per customer than AT&T and Verizon, we have a much denser network than those two guys and we’re less crowded,” Ray said. “So we have a lot of opportunity to expand capacity with MIMO, with carrier aggregation and with the spectrum resources we already have in hand…So we feel very confident with where we sit.”
Legere said T-Mobile’s LTE network, which was constructed starting in 2013, was “built for this kind of untethered usage.”
Legere on Thursday challenged the other Tier-1 carriers to follow T-Mobile’s lead on unlimited, but warned it won’t be easy for everyone.
“There’ll be responses, we want responses,” Legere said. “But when companies that have networks that can’t do this try, they will fail. When companies that have balance sheets and profitability problems try to do this, they will fail.”
That comment appeared to be aimed at Sprint, which on Thursday was game to take up T-Mobile’s challenge.
Just after T-Mobile’s release went live Thursday morning, Sprint CEO Marcelo Claure announce the roll out of a new $60 unlimited plan, dubbed “Unlimited Freedom.”
This story has been updated to include details about the prioritization data limit of T-Mobile’s unlimited plan.