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T-Mobile dangles $15 plan, 5G gains, big freebies to get Sprint deal done

Scoop: It says these incentives, including free home broadband to 10 million low-income families, won't come without the merger.

T-Mobile CEO John Legere

T-Mobile CEO John Legere is using his company's latest Un-carrier event to make his biggest argument yet for why the Sprint deal should happen.

James Martin/CNET

It's been more than a year and a half since T-Mobile and Sprint announced their $26.5 billion merger in a bid to revamp the US wireless industry. With the deal stuck in legal limbo, T-Mobile on Thursday used its latest Un-carrier event and the promise of a combined 5G network to make its most compelling case yet.
 
In addition to announcing that its new 5G network will cover 200 million people nationwide from Dec. 6, the carrier unveiled three new programs as part of its "New T-Mobile Un-carrier 1.0" event that will take advantage of the increased capacity created by the combination of T-Mobile's and Sprint's networks.

The first is a $15-a-month phone plan; the second a pledge to offer free 5G service to police, firefighters and emergency medical technicians for the next decade; and finally a program to offer home broadband access and a mobile hotspot for free to 10 million low-income households with children.

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But here's the catch: The company says that none of the programs will happen without T-Mobile and Sprint getting together. T-Mobile said this only works thanks to the extra capacity provided by Sprint.

"Everything we announced today is dependent on the massive capacity expansion that comes from the new T-Mobile," T-Mobile Chief Operating Officer Mike Sievert said in a call with reporters. He noted that the company has offerings similar to what it announced Thursday already in the market, but it needs the merger to take this next step.

"They're nothing compared to what we can do at a greater scale once we have the synergies and the combined network capacity of this new company," Sievert said.

"It's not that we're saying we won't," added CEO T-Mobile John Legere. "We couldn't, nobody could. But there's magic in putting these two networks together and that's why this is critically important."

These initiatives, which the company estimates represent billions of dollars in investment and savings, underscore the lengths that it will go to seal the Sprint deal. While federal regulators such as the Justice Department and the Federal Communications Commission have approved the deal, attorneys general from 15 states and Washington, DC -- led by New York and California -- continue to oppose it.

"Our litigation continues to move forward," a spokesperson for California Attorney General Xavier Becerra told CNET following the T-Mobile event. "Our bottom line remains: protecting consumers and competition."

A trial between the opposing states and T-Mobile is set for Dec. 9, with Legere saying in a call with investors last week that he expects the deal to be "permitted to close in early 2020."

The programs follow a number of incentives that T-Mobile has promised to get the deal done, including vows not to cut jobs and to keep customer service centers located in the US, as well as a promise not to raise prices for three years. T-Mobile and Sprint struck a deal with the Justice Department to help prop up Dish Network as a replacement fourth wireless carrier.

As the effort to close the deal drags on, T-Mobile and Sprint have been moving in opposite directions. Last week, T-Mobile said it added 1.7 million subscribers in the third quarter, once again leading the industry in growth. Sprint, meanwhile, reported on Monday that it lost $274 million and nearly 400,000 subscribers.
 
T-Mobile desperately wants Sprint's assets, and Sprint, well, needs a lifeline. Hence, an Un-carrier event, which the former company uses to unveil big initiatives and service changes, around the "new T-Mobile."
 
Here's a breakdown of the three programs:

A cheaper, but limited plan

T-Mobile will offer a new $15-a-month rate plan, which is half the cost of T-Mobile's cheapest existing plan. Under this plan, you'll get 2 gigabytes of data. For $25 a month, you'll get 5GB of data. But unlike other plans that will slow you down, once you blow through this allotment, you'll need to pay for more or switch to a higher data plan. 

The other new twist to this plan is that this option will get more lucrative over time. Each year, T-Mobile will add 500MB of data to the plan for up to five years. 

While the new price point looks attractive, even moderate data users will likely shy away, given that a 5G connection means you'll likely eat through the data in a short amount of time.  

Free service for first responders

In perhaps the boldest move, T-Mobile said it would commit to offering all first responders free service -- 4G or 5G depending on coverage area -- for the next 10 years under a program called "Connecting Heroes." The company will work with local police departments, fire departments and emergency medical technicians, and each individual would be offered a free line (the phone, however, isn't free). 

T-Mobile estimates that this will save local departments $7.7 billion.
 
The company also said the first responder plans sit at the highest priority tier regardless of the amount of data they consume.
 
The move is a shot across the bows of AT&T, which is building a dedicated network for first responders called FirstNet, as well as Verizon, which still has many contracts with local police, fire and medical departments.

In a response Thursday night, AT&T called T-Mobile's pledge a "marketing ploy." 

"The communications needs of first responders are not a bargaining chip – they are a critical lifesaving tool," an AT&T spokesperson told CNET. "FirstNet was born to provide the reliability, capability and accountability that the public safety community requires to carry out its life-saving missions." 

"To think that they can turn serving first responders into a marketing ploy, T-Mobile reveals how little they know about what public safety fought for."

Connecting the unconnected

Last, T-Mobile said it would give 10 million households with children free home internet access for five years through a mobile free hotspot and a tablet or laptop that will cost as little as $75. 

The program, dubbed Project 10 Million, offers households 100GB of data per year and the option to buy more data at affordable rates. 
 
The company said it would work with local programs to identify eligible households and students who don't have internet access outside of school.
 
The program follows an existing initiative from T-Mobile called EmpowerED, which gives off-campus devices and data plans to students in school districts with attributes like a higher dropout rate or a disproportionately high number of students receiving free lunches.

Originally published, 7 a.m. PT.
Updates, 9:29 a.m.: Adds additional comments from T-Mobile executives; 11:20 a.m.: Adds comment from California attorney general's office. 6:58 p.m.: Adds AT&T response.
Clarification, 9:55 a.m.: Project 10 Million will offer devices at a reduced cost.