By Thomas Gryta
T-Mobile US Inc. is raising the price of its unlimited wireless
data plan by $10 to $80 a month, as increased usage and an upgrade
to faster wireless broadband increases the cost of providing that
service.
The move is an unusual one for the fourth-largest U.S. carrier
by customer base, which has reversed a long decline in its
subscriber base by doing away with carrier standbys like service
contracts and international data fees. Its low-priced unlimited
data option--something Verizon Wireless and AT&T Inc. don't
offer--has been a key to competing with the market's leaders.
The change will take hold later this month. T-Mobile is also
building in more tiered data options, in which subscribers pay for
fixed allotments of high-speed data that are cheaper than the
unlimited plan. The company is adding a new tier with 5 gigabytes
of data and boosting data allotments at other tiers. For example, a
$50 monthly plan that now offers 500 megabytes of high-speed data
will soon give subscribers a full gigabyte.
AT&T and Verizon Wireless stopped offering new customers
unlimited data years ago in favor if tiered plans where subscribers
would pay more for bigger allotments. With subscriber growth
slowing, the moves were aimed at positioning the carriers to
capitalize on growing wireless Internet use, particularly for
video.
T-Mobile Chief Marketing Officer Mike Sievert said the move to
raise prices for unlimited customers partly reflects the cost of
providing such plans. He noted unlimited-plan customers "aren't the
majority" for the carrier.
Customers under the old unlimited pricing won't have to pay more
unless they switch plans. Subscribers to T-Mobile's tiered plans
will automatically receive the increased data allotments.
Regulators have praised T-Mobile for making the U.S. market more
competitive. But others in the industry have questioned how long
the company can afford to keep up the pressure.
The carrier capped 2013 with a big increase in subscribers and
projected more gains this year. But the cost of winning that
business hurt its margins and widened its loss in the fourth
quarter.
T-Mobile executives have been at pains to say they aren't
planning a price war--particularly given the heavy cost of rolling
out faster network technology called LTE--and in fact are
collecting more money from subscribers.
"I don't think it's an environment that would result in an
all-out price war," T-Mobile finance chief Braxton Carter said in
an interview last month. "There wouldn't be adequate capital to
support the build out."
T-Mobile said data demand has been soaring under its existing
plans. Overall, the company said its subscribers use nearly 50%
more data now than they did a year ago. Monthly usage on unlimited
4G LTE plans has nearly doubled and tops 5 gigabytes.
Write to Thomas Gryta at thomas.gryta@wsj.com
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