T-Mobile US Inc. is dropping lower-priced monthly data plans and replacing them with a higher-priced service offering unlimited data.

The No. 3 wireless carrier said Thursday its new T-Mobile One plan does away with its old model, which sells subscribers a certain amount of data each month before data download speeds are slowed.

"This is going to be our rate plan," Chief Executive John Legere said during a conference call. "This is going to be very difficult for AT&T and Verizon to do."

The new T-Mobile plan costs $70 a month for a single line, up from $65 a month for six gigabytes of data or $50 for 2 gigabytes under the previous plan.

Mr. Legere acknowledged the new plans could raise prices for customers of the lowest-tier plans, but said customers looking for cheaper plans can still buy less-expensive prepaid service or opt for the company's MetroPCS brand.

In the new plan, a family with four phones would pay $160 a month. T-Mobile said it most popular family package previously offered four lines for $120 a month with speeds slowed after six gigabytes of use per device. An unlimited monthly plan for four phones previously cost $220.

The new plan will be available Sept. 6, at which point previous plans will be phased out. Existing T-Mobile customers can keep their current plans.

The move is the latest by wireless carriers that increases the monthly cost for consumers while offering more data for a higher price, a major shift away from the aggressive promotions and price cuts in recent years. AT&T Inc. Wednesday outlined a new set of plans that raised prices on the lowest-tier data plans, dropped overage fees while lowering rates for the biggest data users.

T-Mobile already offers video and music services that don't count against their customers' data plans.

The new T-Mobile offer comes with caveats. All video is typically streamed in a standard-definition format. As with earlier plans, T-Mobile plans to restrict users who use the most data—about 26 gigabytes a month—by shifting their wireless traffic to the lowest priority when the network is congested. A subscribers who use a smartphone as a wireless hot spot to beam internet service to a computer will see bandwidth slowed to second-generation speeds.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

 

(END) Dow Jones Newswires

August 18, 2016 11:05 ET (15:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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