T-Mobile Intros Pay as You Go Plan With Flat 10-Cent Rate

Budget-conscious consumers have helped make T-Mobile the nation's leading prepaid carrier. Its newest plan caters to the same crowd.


T-Mobile continues to emphasize the wireless industry's need for simpler, more affordable wireless service plans. Its latest effort to address this need is a flat-rate Pay as You Go plan.

Pay-as-you-go plans have historically been tricky to keep up with, since varying per-minute and per-text pricing made it unclear whether it was time to "reload" or not, T-Mobile said in an Aug. 11 statement. Plus, such plans have been minute-based, without the option to add data.

"Now that's all changing," said T-Mobile. Its Pay as You Go plan features a 10-cent-per-minute rate for talking and texting, which the company said is the lowest rate in the industry.

The plan has a $3 monthly minimum—good for 30 minutes or talking or texting or some combination of the two.

It also requires no credit check, no deposit and no contract.

The data component comes in the form of daily or weekly passes to T-Mobile's 4G Long Term Evolution (LTE) network. Pay as You Go customers can purchase one-day, $5 passes, good for 500MB of LTE data; or seven-day, $10 passes, good for 1GB of LTE data.

The plan is ideal for customers who don't need unlimited plans—international travelers who want a number while in the United States, parents who want to give a child a phone for emergency calls, or simply the budget-conscious, the company said.

Budget-Conscious Consumers

T-Mobile's 2012 acquisition of MetroPCS was finalized as the prepaid market was hitting its stride, and prepaid—which particularly caters to those keen to budget their costs, avoid contracts or who don't have credit cards—has been a sweet spot for T-Mobile. On Aug. 7, T-Mobile announced that it had overtaken Sprint and is now the nation's leading prepaid wireless provider.

According to the most recent figures, T-Mobile said in a statement, AT&T has 11.34 million prepaid customers, Verizon Wireless has 6.04 million, Sprint has 15.19 million and T-Mobile now has 15.64 million—and counting.

"With over 1.2 million new customers since this time last year," said T-Mobile, "MetroPCS has been adding customers at a rate of one customer every 27 seconds."

During the second quarter of the year, T-Mobile led the industry in overall new customer additions, adding 1.5 million, as well as in total revenue growth, which was 8 percent year over year.

During a July 31 earnings call, CEO John Legere and CMO Michael Sievert insisted that analysts can expect to see a continuation in T-Mobile's growth, its cost-cutting strategies, and its proving that cost-cuts and profits can go hand-in-hand.

"What everybody needs to realize is our competitors are in full-on response and compete mode, and yet we're outpacing the industry—not only on customer acquisition but this quarter on sequential [earnings before interest, taxes, depreciation and amortization] growth," said Sievert. "We think there's a strong opportunity for us to continue to monetize that going forward into next year."