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Summary:

T-Mobile today said it would eliminate its 5 gigabyte per month cap on its mobile broadband service. So is real competition coming to the wireless industry, or is this the end of flat-rate mobile broadband? Both.

T-Mobile has announced that it will pull the 5 gigabyte-per-month cap on its mobile broadband service, part of an effort to push its HSPA+ network, which can deliver data speeds of up to 21 Mbps down. So is real competition coming to the wireless industry, or is this the end of flat-rate mobile broadband? I think it’s both.

T-Mobile has changed its mobile data pricing plan to cut overage charges for customers of its 200 MB plan in half, and remove them entirely for customers who pay $59.99 per month (or $49.99 per month without a contract) for the 5 GB plan.

    The move is aimed at signing up customers in an increasingly competitive mobile broadband market. After all, Clearwire, Sprint and the cable companies are already selling WiMAX, which can deliver up to 6 Mbps down and 1 Mbps up, and Verizon is prepping for the launch of its LTE service during the fourth quarter of this year. AT&T will follow with LTE in 2011.

    All of which is good for consumers, but at least as far as T-Mobile’s lifting of its 5 GB-per-month cap, there’s a catch: go past that limit, and download speeds will slow. T-Mobile tries to play down such a caveat, however, saying: “When used as a mobile broadband solution in conjunction with an existing home broadband service, only a very small number of customers use more than 5GB per month.”

    But going forward, that number will only rise, as consumers are downloading ever more data, especially to watch video. So wireless providers, which have limited spectrum and a demand curve that resembles a steep uphill climb, are re-evaluating how they charge for mobile broadband (GigaOM Pro, sub req’d). The end of the flat-rate pricing is coming (GigaOM Pro) and the jury is still out as to how carriers will implement new options (GigaOM Pro).

    T-Mobile’s decision to slow speeds after a user hits 5GB per month is likely an answer to Clearwire’s unlimited mobile broadband offering, while also protecting the carrier for overloading its cellular network with a corresponding policy change. And as the next generation of wireless networks hit the market, such plans will become increasingly common.

    This article also appeared on BusinessWeek.com

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    1. Stacey, do you have a link for Tmobile’s announcement? Maybe I’m missing it in the post.

    2. Timothy Meade Tuesday, April 27, 2010

      And when will GPRS/EDGE be 20USD/month? T-Mobile could really exploit a niche here.

      1. No one said that GPRS/EDGE would be 20USD/month.

    3. onecallednick Tuesday, April 27, 2010

      More evidence that T-Mobile is the true innovator in the US mobile industry. My big question is how much does it slow after that 5 GB cap? I could see having an option to add more full-speed data to the plan having a possible market. I believe European carriers treat data in a similar manner.

    4. regularpcuser Tuesday, April 27, 2010

      I wish they had a tower less than a half hour from my house.

    5. Kevin C. Tofel Wednesday, April 28, 2010

      I wish T-Mobile’s HSPA+ coverage reached my home…. it’s close, but not quite close enough.

    6. I have 2 T-Mobile accounts, an AT&T account, a Sprint account and one with Cricket. Most are for broadband only.

      Honestly, Cricket is cheap ($40) and not that fast, but they’ve ALWAYS slowed me down around the 5GB mark. Sprint once hit me with a $300 or so bill (ridiculous), so they’re canned in a few months at contract end. AT&T has hit me a few times, too.

      I like this way better and will stick to T-Mo and Cricket from that point forward.

    7. T-Mobile Drops 5GB Data Cap…But There’s a Catch | RPad.TV — Raymond Padilla & friends talk games and geek culture Wednesday, April 28, 2010

      [...] in fear of data overage charges, but they will have to live in fear of something else. According to GigaOm: There’s a catch: go past that limit, and download speeds will slow. T-Mobile tries to play down [...]

    8. The problem with all these plans isn’t the gb limit. its bandwith. if i listen to pandora on my phone only from midnight to 6am I am not straining the network. but will very quickly eat up 5 gb. at least Tmobile isn’t charging you anymore. Overage charges are ridiculous. It’s likw driving in traffic. If you drive at rush hour expect traffic. but you dont get punished if drive at night and go over some magical mileage number.

    9. T-Mobile Does Away with Overage Charges on 5GB Data Plan « Techknology's Blog Monday, May 3, 2010

      [...] a welcome move, T-Mobile has decided to move beyond this practice. It has done away with overage charges beyond the 5GB limit. However, the number still retains a bit of its past significance as users will now have to put up [...]

    10. T-Mobile Expands HSPA+ Coverage Areas With “4G Speeds” Monday, May 24, 2010

      [...] EVO on a WiMAX network — and that’s without a premium data charge. In fact, T-Mobile recently eliminated overage charges on its data plans and instead reserves the right to throttle down service after users consume more than 5GB of [...]

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