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T-Mobile tries out $50 unlimited wireless plan

Wireless operator is offering a new promotion to help retain customers and hopefully pick up some new ones, as it competes more on price.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
2 min read

T-Mobile USA, the fourth-largest cell phone operator in the U.S., is launching new service promotions in an effort to keep long-term customers and attract new ones.

The company plans to offer a special $50 per month unlimited voice plan to longtime customers in San Francisco, initially. It will also offer new customers who switch from a competitor a $135 rebate, Reuters reported Thursday.

T-Mobile's new plan will only be available to San Francisco customers who have used its service for 22 months or more, according to a T-Mobile representative who spoke to Reuters. An analyst told the wire service that the plan will likely go nationwide soon.

The promotions come as T-Mobile faces stiff competition from the three other major cell phone operators in the U.S. During the fourth quarter, AT&T and Verizon each added customers. AT&T added 2.1 million customers, including 1.9 million iPhone users. Verizon Wireless added 1.4 million new subscribers in the fourth quarter.

T-Mobile USA also added customers in the fourth quarter, but its figure was considerably lower at 621,000. It was also down from the previous quarter's figure of 670,000 new subscribers, and down considerably from a year earlier when it added 951,000 subscribers in the fourth quarter of 2007.

The bulk of T-Mobile's new subscribers came from prepaid accounts, as the total number of customers signing up for contracts slowed compared with previous quarters.

Meanwhile, Sprint Nextel, which reported fourth-quarter earnings Thursday, continued to lose customers, shedding 1.3 million customers during the fourth quarter.

The results from the four major carriers suggest that higher-value customers, who enter contracts and generally generate more revenue per month, are gravitating toward the two biggest carriers, rather than T-Mobile or Sprint.

T-Mobile and Sprint seem to be duking it out for value customers, which is where these new promotions from T-Mobile are targeted. In fact, it looks as if T-Mobile's marketing may be in response to a new plan that Sprint's prepaid brand, Boost Mobile, launched in January. Boost is offering an unlimited mobile plan for $50 a month. During Sprint's earnings conference call on Thursday, executives for Sprint said the service is off to a good start.