It’s a Form of Cutting the Cord for Cellular Users
T-Mobile USA recently introduced a series of data-only plans aimed specifically at smartphone users who have no need for traditional voice minutes. Data-only plans have been available from network operators for several years for tablet users, but T-Mobile’s new plan is available for customers with smartphones. Originally, such plans were intended for deaf and hard-of-hearing subscribers who didn’t want or need voice services. The new plans aren’t offered online or actively marketed by T-Mobile; customers can switch to one by visiting the carrier’s stores or by calling and asking specifically for the plan.
These tariffs essentially unbundle data access from traditional voice services, not dissimilar from the concept of “naked broadband”, in which subscribers skip services like voice calls or pay-TV. Plans like T-Mobile’s are making a form of naked mobile possible, enabling subscribers to “cut the cord” on phone calls as they increasingly rely on third-party services such as Skype, WhatsApp and FaceTime.
The basic plan is priced at $20 a month for 2GB; other options are $35 for 6GB, $50 for 10GB, $65 for 14GB, $80 for 18GB and $95 for 22GB of LTE data. All the plans include unlimited texting. Although there is no voice calling, the tariffs do support emergency 911 calls. Sprint has a similar unlimited data-only plan priced at $40 a month, but its plan is available exclusively for deaf and hard-of-hearing customers. Verizon offers a plan for hearing-impaired users, at $55 for 2GB of data.
T-Mobile is cleverly preparing itself for the data-only trend, recognizing that a growing number of subscribers — particularly younger ones — are not worried about the technology used to connect with their friends, and rely on social media rather than phone numbers as identifiers.
While some network operators would be more concerned about becoming data “bit pipes”, as a market challenger T-Mobile has tended to confront established business models. Its Binge On promotion allows users to stream unlimited videos from Netflix, Hulu, HBO and other providers. The promotion comes at a time when many networks are shying away from unlimited offerings. T-Mobile’s “Un-carrier” approach has seen it add more than 1 million net customers each quarter for the past 11 quarters, bringing its subscriber total to more than 63 million.
As in most developed markets, the US is reaching 100% mobile penetration, so it will take fresh approaches to bring in new subscribers. Competitively-priced data-only plans could allow T-Mobile to take customers from AT&T and Verizon. Data-only plans could dilute the importance of voice-over-LTE services and highlight the need for Wi-Fi offloading. Interest in these plans will be an indicator of behavioural trends. For the Un-carrier, it could be an unusual route to success.
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