T-Mobile undercuts AT&T on 4-line, 10GB family plan

The wireless carrier unveils a promotion offering more than twice the high-speed data for a four-line family plan, though only through 2015.

T-Mobile CEO John Legere
T-Mobile CEO John Legere. T-Mobile

Just last month, T-Mobile started offering its customers more streaming music. Now -- just in time for the back-to-school shopping season -- the wireless carrier is following up with more data.

The company said starting Wednesday, customers can sign up for its four-line Simple Choice plan at $100 per month and get more than twice the high-speed data as before. It's now offering 10 gigabytes of 4G LTE data -- 2.5GB for each line -- up from just 1GB per line of high-speed data before.

The move represents yet another shot across the bow to T-Mobile's larger competitors, as the company continues to stay aggressive on pricing. Similar four-line plans with 10GB of high-speed data from rivals Verizon and AT&T cost $160. A difference between the plans, though, is that all 10GB are shared across the four lines in the Verizon and AT&T plans, while each T-Mobile line is portioned 2.5GB.

In a blog post introducing the promotion, T-Mobile CEO John Legere took the opportunity to take shots at AT&T, as he's done repeatedly before, saying it "infuriates" him that his rival is selling its plan for $60 more to "hardworking families who could use that money for more important things."

AT&T spokesman Mark Siegel said his company declined to comment about the post.

The promotion could help T-Mobile continue to capture more customers, especially amid the school-shopping frenzy. The carrier, the fourth-largest in the nation by subscriber base, has been aggressively working to increase its customer base through a handful of offers, such as paying for customers' early termination fees to get out of their cell phone contracts with rival carriers.

The efforts have been effective in bringing in new users, but have also been costly for the company. Other carriers have cut prices and shook up their plans to better compete with T-Mobile.

Customers can sign up for the new deal through September, and the boosted high-speed data lasts all the way until the end of 2015. The company said the promotion is available for both current and new customers.

"We know that this is one of the busiest shopping seasons in the year," Mike Katz, a T-Mobile vice president of marketing, told CNET last week, "and we expect that this is going to be a really, really popular, powerful option for customers in the market...We have really high expectations for this."

T-Mobile doesn't employ data caps on its plans, but it will slow down the connection speed once customers hit their high-speed limit. That limit became harder to reach when T-Mobile said last month it would no longer count streaming music data from the most popular services against its customers' cellular data limits.

Kevin Manning, an analyst for BMO Capital Markets, said in a note Monday that he thinks the promotion will have limited success in attracting new subscribers because the extra-data deal will eventually run out at the end of 2015. T-Mobile's other recent offers, such as the ETF-fee and music-streaming offers, were made permanent.

He added that the promotional plan is $40 less than the current most comparable T-Mobile offer, which provides 3GB per line on a four-line plan. Manning said the lower cost should cut into T-Mobile's average revenue per user.

Update, 3:20 p.m. PT: Adds analyst comments and additional details.

 

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