T-Mobile fired back at Sprint's aggressive new pricing on Monday by quadrupling the amount of data customers on its Simple Starter plan will get.
The new plan, which is geared toward individuals, will offer customers 2GB of data for $45 a month, starting September 3. Previously, the company offered 500MB of data for $40 a month. T-Mobile doesn't charge an overage for customers who exceed its data cap, but it does offer the option to add an additional 500MB of data for $5 for one day and 1GB of data for a week. Under the company's more expensive Simple Choice plans, T-Mobile simply slows data access from the top 4G LTE speeds after customers hit their threshold.
T-Mobile's update comes a week after Sprint began shaking things up with completely revamped pricing. A week ago today, Sprint abandoned its old "Framily" plan and introduced new pricing for its unlimited data service. Then on Thursday, Sprint introduced a $60 unlimited plan, designed to attach T-Mobile's unlimited offering.
T-Mobile immediately responded with a promotion that gives customers fleeing Sprint (as well as AT&T and Verizon) unlimited data at no additional charge for one year. It will also provide this promotion to any existing T-Mobile customers referring new customers to the service. The promotion starts August 29 and will be available for a limited time.
Sprint, which has been losing customers for several quarters, has suffered more than any of the other major wireless carriers from T-Mobile's "Uncarrier" strategy. T-Mobile began shaking things up 18 months ago when it announced the launch of "Uncarrier," a strategy that initially started with getting rid of carrier contracts and device subsidies. Since then, T-Mobile has announced free data roaming for international travel, reimbursement for early termination fees for people who switch from other carriers, and several other promotions.
Now it looks like T-Mobile, the smallest of the national carriers, is responding once again to Sprint.
While many are calling the back and forth between the carriers a "price war" the reality is that pricing hasn't changed much in the past week. What has changed is how much data carriers are offering customers for the same price or more. For instance, T-Mobile's new Simple Starter offer is actually $5 more a month than it had been. But what T-Mobile and Sprint are doing with their recent pricing changes is trying to add value to these plans. This means subscribers get more data capacity per month for the same price that they were already paying. The idea is that consumers, even if they pay a little more than they had previously, will feel like they are getting more bang for their buck from these deals.
It's a strategy that AT&T and Verizon have used in the past as they rejigger their own pricing plans to stay competitive.
While neither AT&T nor Verizon has responded directly to Sprint's or T-Mobile's most recent moves, last week AT&T announced that its prepaid brand Cricket will offer $100 credit to anyone switching to its service from T-Mobile or MetroPCS, T-Mobile's prepaid brand. AT&T closed its acquisition earlier this year of Leap Wireless, which owns the Cricket brand.
Verizon Wireless, which has always been the least likely to respond to new competitive pricing schemes, has also been tweaking its plans. Earlier this month, the company began offering a $60 a month plan that includes 2GB of data along with unlimited voice and text messaging service. For customers, who finance their handset instead of buying a device on contract, the price is reduced by $10 a month. Previously, Verizon charged about $90 for the same amount of data offered in this plan.