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T-Mobile strikes a nerve with move to single unlimited data plan

Fans are turning their backs on the latest Uncarrier move. T-Mobile says it's shaking up the industry, and change can be scary.

Josh MIller/CNET

T-Mobile CEO John Legere speaking at the Uncarrier 11 webcast. Uncarrier 12 didn't go over as well as T-Mobile Tuesdays.

Claudia Cruz/CNET

Has T-Mobile finally jumped the shark with its latest "Uncarrier" move?

The wireless carrier's industry-shaking announcements, such as eliminating phone subsidies and offering free international data roaming, helped it amass a legion of followers over the last three years.

But the backlash was swift and harsh for T-Mobile's Uncarrier 12, which scraps its lineup of wireless plans in lieu of a single unlimited option. Within hours, critics took to the T-Mobile Reddit thread to rant about the changes (they've since been consolidated into one "megathread"). What really ticked people off is that customers who'd prefer a cheaper, limited option have to pay up for the new plan.

This marks the first time consumers have so strenuously pushed back at T-Mobile. Prior to Thursday's announcement, the Uncarrier moves have generally won praise from customers. Thanks to the campaign, T-Mobile was able to reverse its subscriber losses and force competitors to follow its lead. It remains to be seen whether Uncarrier 12 will have the same impact.

"This seems like the first negative step T-Mobile has taken in a while," Reddit user raney150 said in the thread.

For once, it opened T-Mobile up to a shot from Verizon. "A so-called 'unlimited' plan on such a limited network is no value at all," said a spokesman for the carrier.

T-Mobile argues that it is trying to move the industry away from counting gigabytes.

"This is a big, industry-shaping, seismic move, and change and innovation on this scale can be scary to some," T-Mobile Chief Operating Officer Mike Sievert said in an emailed statement on Friday.

'Seismic move'

So is this an industry game changer or a pain for bargain-seeking consumers? It could be a little of both.

T-Mobile has played the long game before, and pushing the industry to go back to unlimited data plans could ultimately benefit consumers.

It's happened before. T-Mobile was the first to kill off phone contracts and subsidies. Two years later, Verizon followed suit. AT&T did it in January. In the last two months Verizon and AT&T finally began eliminating overage fees for customers who go over their limit; T-Mobile CEO John Legere kicked off a campaign urging the two to do so more than two years ago.

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"The era of data plans and data buckets is over," Sievert said on Friday.

He may be jumping the gun. The industry is not moving away from tiered options that define how much a person can consume each month. Remember, the move to this capped structure is a relatively new revolution of its own.

It was only six years ago that AT&T killed off its unlimited plan for the first time, with Verizon following suit a year later. It's taken years of relentless marketing to make us forget that we used to get unlimited data as a default, and picked the number of voice minutes and text messages we wanted each month.

Sure, smaller rivals like Sprint offered fully unlimited plans. Sprint also unveiled its own similar unlimited plan on Thursday, although it is keeping the rest of its options.

Most consumers, however, switched to these tiered plans and adjusted their usage accordingly. In fact, most people rarely hit their limits. It wasn't until the rise of streaming video and live streams that people began to eat up their data in a significant way.

Now T-Mobile wants to go back.

T-Mobile's Binge On program cuts your video quality down to ease the burden off of its network. The new unlimited plan will require Binge On, with high-definition video a $25 add-on.

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Still a pain

In the short term, customers looking to sign up for T-Mobile will eventually be forced into this new plan, which is $20 more than the company's current low-end plan, which starts at $50 a month for 2 gigabytes of data. The company hasn't said when they will disappear.

While the changes are a boon to customers on higher-end plans who can switch down to the new unlimited option, it's the budget-conscious crowd that will feel the squeeze. T-Mobile said customers can look to its MetroPCS prepaid service for a cheaper alternative.

"Unlimited data implicitly means that lower-usage customers subsidize higher-usage customers," said Roger Entner, a consultant for Recon Analytics.

Reddit users also complained about other tweaks like the removal of free high-speed data tethering and the requirement to reduce the quality of video streams. (High-definition video is available for $25 extra, while data tethering costs another $15.)

T-Mobile said customers could keep their existing plans and terms. "We won't change your rate plan -- only you can," Sievert said.

And while T-Mobile is set to phase out its existing plans, perhaps enough vocal opposition can get the company to change its tune.

"If we've proven anything, it's that we listen and respond and continually deliver what customers ask for," he said.