For the past year now T-Mobile has been rolling out offers that have forced the U.S. wireless industry into competition. Starting with its "JUMP!" plans and more recently with its offer to pay subscribers' early termination fees, T-Mobile has led larger carriers to offer lower prices and better terms.
T-Mobile this week announced yet another initiative meant to aggressively compete with its larger rivals. The company will now offer a less expensive "Simple Starter" plan for new customers.
The Simple Starter plan starts at $40 per month. For that price customers will get unlimited talk and text and 500GB of 4G LTE data access per month.
This new plan comes just one month after T-Mobile announced that it was raising data caps for its Simple Choice plans. The lowest-priced Simple Choice plan is now $50 per month and offers 1GB of 4G LTE data.
"Un-carrier is a movement, not a marketing strategy," said John Legere, CEO of T-Mobile. "We are freeing consumers from the predatory practices of traditional U.S. wireless companies and that includes these plans that start with a low price and a low data limit, but then hit you with insane fees if you send one too many emails. It's wrong! And I personally want to drive those ridiculous schemes out of this industry. We will continue to be relentless and bring this forced march of change to the market every day so consumers can be creative with and enjoy the true benefits of wireless. I know we have it right and when we all are done reporting results from the first quarter - I think you'll share my conviction."
In addition to the Simple Starter plan's lower price, T-Mobile is touting the plan's lack of overage fees, which mirrors the policy of its other, more expensive, plans. However, with the Simple Starter plan there is a big difference in how data overages are handled.
For T-Mobile's Simple Choice plans, customers who reach their data cap are simply throttled down to the company's very slow EDGE network. According to a BGR report T-Mobile's new Simple Starter plan will cut customers off from T-Mobile's data networks entirely once they reach their monthly allotment. Customers may purchase a one-day, 500MB chunk of data for $5 or a one-week, 1GB pass for $10. While this situation does mean the new Simple Starter plan does not offer truly unlimited data, it does still differentiate itself from other carriers by not automatically charging customers who reach their data caps.