T-Mobile's next act: Attracting tablet buyers with free data
The company will let new and existing postpaid customers add an LTE slate to their existing plans and get nearly 1.2GB of free data through the end of the year.
In part two of his three-part plan to "revolutionize a broken, arrogant, and stupid wireless industry," T-Mobile USA CEO John Legere announced Thursday that tablet owners will soon find a cheaper option for wireless data through his company.
Starting Saturday, current and new postpaid T-Mobile subscribers can add an LTE tablet to their existing plans at no charge, Legere said. In addition, T-Mobile will give about 1.2GB of monthly data to those customers at no charge through the end of the year (the 1 GB promotion and the 200 MB that comes with tablets linked to a phone plan). Starting in 2015, they'll pay $10 per month for access to that data.
T-Mobile is in the middle of a new campaign to launch salvos at its competitors in the wireless industry. On Wednesday, T-Mobile announced its Simple Starter plan, a bundled offering that includes unlimited talk and text and up to 500MB of data for $40 per month. Legere said that he'll be offering hints at the third part of the plan on his Twitter feed.
To sweeten the pot a bit more, T-Mobile is slashing prices on LTE tablets to match their Wi-Fi-only counterparts. So, in the case of the iPad Air, for example, T-Mobile will sell the LTE version, which typically starts at $629, for the same $499 price the comparable Wi-Fi-only version is sold at.
Chief Marketing Officer Mike Sievert told CNET that the company was eating the cost and making an investment in people using their connected tablets more often.
"It's a pretty big statement on our part," he said. "We think customers will see the lifestyle benefits."
T-Mobile is calling the offering "Operation Tablet Freedom."
He cited an internal estimate that 10 percent of tablets actually use the cellular network. Sievert said he wants to remove the barriers of adoption for cellular-connected tablets.
T-Mobile originally planned to make its third announcement tomorrow, but has delayed it until Monday to make way for the Galaxy S5 launch.
T-Mobile has taken a hard-line stance in the wireless business. Legere has made clear that he believes "Big Blue (AT&T), Bad Red (Verizon), and Bumbling Yellow (Sprint)" are not acting in the best interests of consumers, and he's trying to be the savior.
Legere's comments and his recent moves have made headlines, but whether they will translate to increased market share remains to be seen. T-Mobile is still the smallest carrier in the US wireless industry, and recent reports have suggested that Sprint majority owner SoftBank is considering putting a package together to acquire T-Mobile and consolidate the brands to take on AT&T and Verizon.
For its part, T-Mobile has said that it's not interested in a buyout, and continues to say that 2014 will be a crucial year for it as it attempts to expand its customer base. But expanding its customer base is just one concern. It's not clear how the freebies and the discounts will impact T-Mobile's bottom line if these programs succeed in attracting new customers.
It didn't take long after T-Mobile's announcement for Verizon to chime in on Operation Tablet Freedom. In an e-mailed statement to CNET, a Verizon spokeswoman pointed to that carrier's own, similar offer, which gives customers 1GB of additional data at no charge when a tablet is added to More Everything plans. That deal is available as long as the tablet is on the customer's plan. Adding a tablet to More Everything, however, costs $10 per month.
T-Mobile shares were down 37 cents, or 1.2 percent, to $31.32, following the Operation Tablet Freedom announcement.
Updated 9:47 a.m. PT: To include a comment from a T-Mobile executive.