As 4G Use Rises, T-Mobile Boosts Plans, Adds Discounts


Updated. Our insatiable appetite for speedy mobile broadband knows no bounds, and carriers are still adjusting to compensate. T-Mobile is the latest to do so by adding a 10 GB monthly data plan and tweaking the prices of its existing 5 GB and 200 MB offerings. Although fewer than five percent of current T-Mobile customers exceed 5 GB of data per month, the new plan provides an option for such mobile web users: prior to today, customers that exceeded 5 GB in a billing cycle could see their speeds slowed through the remainder of the month, so there was no option for greater data use at 4G speeds.

The two larger plans still follow the same no-cost overage approach as before. If a consumer hits their monthly limit on the 5 or 10 GB plan, bandwidth speeds may be reduced. On the 200 MB plan, however, there is an overage charge of $0.10 per each additional megabyte of data used. Given the $30 monthly charge for 200 MB, I suspect T-Mobile will find more customers choose, or later migrate to, the 5 GB plan at $50 per month. Heavy users that want full speeds on the HSPA+ network for their 10 GB will pay $85 per month.

All three of the new plans also include unlimited access to T-Mobile Wi-Fi hotspots around the country, which can help offload some of the data demand from T-Mobile’s cellular network. And the 10 GB plan is discounted by 20 percent for any existing T-Mobile voice customer, automatically dropping the monthly price to $67.99 when paired with a voice plan. That could entice folks who use either a data-centric tablet or USB dongle with a notebook computer to sign up for T-Mobile voice service, as the discount applies to the smaller plans too.

I suspect that while these plans help the carrier balance consumer demand for its wireless network, they’re only avoiding inevitable plan changes in the near future. Why? T-Mobile’s own network data from January of this year, when the network had 900,000 4G users, illustrates the challenge that it, and other carriers are facing:

  • Android is helping to move customers to T-Mobile’s data services: sales of Android devices were up 137 percent in 2010 from the prior year.
  • Video use on the network has jumped more than 300 percent in 2010.
  • The amount of data used by customers is doubling nearly every seven months. To help reduce bottlenecks due to greater demand, more than 70 percent of the data network backhaul has been improved through the use of fast fiber connections.

It’s not just the relative growth of connected devices, video usage and data amounts that tell the story; the problem is if the growth rate itself continues to accelerate. More than half the U.S. population still don’t have smartphones, although we should hit that number later this year. As more consumers purchase and use smartphones, new tablets with mobile broadband and other connected devices for smart homes, it’s becoming more difficult for carriers to keep up with our data hunger.

Update: Initially, T-Mobile indicated that the 20-percent data plan discount with voice service applies only to the 10 GB data plan. However, it applies to the 5 GB and 200 MB plans as well; the article reflects the new information.

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