T-Mobile 'Unlimited' Monthly 4G Plans Will Challenge Verizon, Sprint

T-Mobile has introduced two new No Annual Contract plan for subscribers to its 4G network, as well as a suite of family and individual plans, proving again that it's working in earnest to boost its bottom line—despite the possibility of being folded into AT&T in a matter of months.

T-Mobile's "unlimited" Monthly 4G plans require no annual contract. The plans also offer unlimited talk, unlimited text and unlimited Web surfing, with the first 100MB of data at 4G speeds where available, for $50; or, for $70, unlimited talk, text and Web with the first 5GB of data at 4G speeds where available.

Instead of charging for data overages, as AT&T and Verizon do, T-Mobile's strategy—as with the Even More plans it introduced in April—is to knock the user off of 4G and onto a slower technology after the agreed-upon data allotment has been surpassed.

The plans—with which T-Mobile hopes to draw in first-time smartphone owners and families with teens texting as though their lives depended on it—are available across T-Mobile's entire portfolio, and so include its Android, Windows Phone and BlackBerry devices.

The new family and individual plans, also introduced May 23, offer single- and multiple-line options at various price points, with options for limited or unlimited talking, texting and data from 200MB to 10GB—after which, again, expect to head into the slow zone. Each includes unlimited T-Mobile to T-Mobile calling and unlimited night and weekend calling.

Family Plan options range from 1,000 minutes of talk time for $60 to unlimited texting and talking and high-speed data up to 10GB for $220. T-Mobile highlights a mid-range plan of unlimited talk and texting with 2GB of high-speed data for $140, describing it as offering a "savings of more than $350 per person, per year on a two-line annual plan, compared with similar smartphones plans from AT&T, Verizon and Sprint."

“Our new rate plans ... put us in an excellent position to capitalize on the 80 percent of wireless customers in America who want smartphones,” Cole Brodman, T-Mobile's chief marketing officer, said in a statement. “We’re providing customers with the 4G coverage they need, an exciting portfolio of 4G smartphones, and the value and flexibility to meet the diverse desires of their entire family.”

Whether T-Mobile is eventually purchased by AT&T, for its proposed bid of $39 billion, rests on whether the pair can prove that the deal is beneficial for American consumers, according to a Senate subcommittee investigating whether the deal would hurt competition and innovation in the wireless marketplace.

In written testimony presented to the subcommittee, T-Mobile CEO Philipp Humm said that T-Mobile, which has faced declining revenues for two consecutive years, is implementing "a new strategy that is aimed at leading the company back to growth." Though even if the business were to return to growth, he added, it wouldn't be enough to secure T-Mobile's future as a competitive player.

Humm continued:

As data usage continues to explode, spectrum is becoming a constraint to our business, with T-Mobile facing spectrum exhaust over the next couple of years in a number of significant markets. Moreover, our spectrum holdings will not allow us to launch LTE. T-Mobile also lacks the low band spectrum that would enable it to offer nationwide deep in-building coverage, particularly to reach homes in suburbs and in rural areas. In addition to these unsolved strategic issues, T-Mobile’s parent Deutsche Telekom is not in a position to finance the necessary large scale investments in the U.S. for T-Mobile to remain competitive.

Whether T-Mobile, the nation's fourth-largest carrier can remain competitive is arguably not as central to the debate as whether the combination of AT&T and T-Mobile, which would result in AT&T and Verizon controlling approximately 80 percent of the market, would prevent number-three carrier Sprint from effectively competing for customers.

Sprint CEO Dan Hesse has argued for the importance of a third major player with the example that Sprint's leadership in 4G has forces AT&T and Verizon to speed up their 4G rollout timetables—to the benefit of consumers.

"Sprint is pro-competitive," Hesse said during the carrier's April 28 earnings call, "and our investment thesis is that all boats will float higher in a vibrant and innovative industry—especially an industry that has the unbridled potential of wireless."