T-Mobile Announces Truly Unlimited Data Plans

Most phone carriers these days are doing everything they can to hop off the unlimited data bandwagon. Both AT&T and Verizon have rolled out penalties for refusing to upgrade to their new shared plans; AT&T won't let you use FaceTime unless you've got a shared data plan, while Verizon is forcing customers to switch over if they want to keep their discounted phone upgrades. Now here comes T-Mobile -- moving in exactly the opposite direction.

Starting next month, T-Mobile will offer Unlimited data plans, as opposed to Unlimited* data plans. The asterisk denotes the invisible limitations on these services. In T-Mobile's case, the existing restrictions are actually pretty good -- the company soft-throttles when you cross the 2GB/5GB or 10GB mark depending on the plan you choose. User reports indicate that the company may toss you off the 3G network and leave you on Edge (2G) for the remainder of your billing cycle.

Even that clause is going away. Company reps have stated that the new plans are "truly unlimited," meaning no caps on data usage, period. The new plan will augment the company's existing services, meaning no one has to switch if you're happy with what you've got right now. The cost for subsidized users is $30/month, unsubsidized users, or those who bought their phones from a third party, will pay $20/month. These are figures for customers who also purchase voice/text service, which means the base price for truly unlimited data is $90 -- $5 cheaper than the company's current $95/5GB option.

T-Mobile's plan to repurpose its existing antennas for LTE service

T-Mobile's marketing VP, Kevin McLaughlin, is explicitly banking on his company's out-of-sync maneuver to boost earnings and attract new customers. "They’re confusing," Mr. McLaughlin said of the competitors’ plans. "They’re making people find out how many megabytes they want when they don’t even know what a megabyte is."

The big difference between the new Unlimited plan and the current Unlimited* option is that the Unlimited* plans allow users to share their phones Internet connection with other devices. That's a knock against the new service, but unlike some of the restrictions AT&T and Verizon have imposed, it's a fair one. Laptops and desktops can be enormous data hogs, and a handful of users with exorbitant usage really could hurt the company's ability to deliver good service to other customers in the same geographical area.

This Is Why Competition Matters

We couldn't ask for a better example of why the FTC was right to deny AT&T's bid to buy T-Mobile. Had it approved the merger, we'd be down to three mobile carriers -- AT&T, Verizon, and Sprint. The latter two are actively trying to force heavy users to pay more money for less data, and Sprint hasn't stepped up to say it stands by unlimited service. Unless AT&T and Verizon see pushback from their "Share Everything" users, Sprint would have zero reason not to follow suit.

We're not suggesting you should pick a wireless carrier based on its spokesperson. That would be stupid. But she sure doesn't hurt.

Granted, it's not clear that T-Mobile's decision to offer truly unlimited service will boost company revenues or attract new customers. The company's road forward if this plan doesn't work is far from clear; upgrading from existing 2G/3G systems to new 4G LTE equipment is expensive. T-Mobile doesn't have the cash reserves that Verizon or AT&T do, and its parent company, Deutsche Telekom, was clearly more interested in getting rid of it than continuing to operate.  

Nevertheless, this announcement caught my eye and personal interest. I've been an AT&T customer for almost a decade, but this decision could be a reason to switch. T-Mobile may be looking to raise revenue, but it's doing so by offering a new option at a highly competitive price. AT&T and Verizon, in contrast, are punishing users with the audacity to use what they pay for by yanking privileges and sneering at the principle of net neutrality.

That's a noteworthy difference. Hopefully consumers are paying attention. If T-Mobile delivers what it promises, this could be an extremely attractive deal for heavy data users.