Blog Post

T-Mobile’s $30 monthly plan favors data over voice minutes

T-Mobile announced Monday that it would begin to sell $30 monthly unlimited text and data plans in a partnership with Walmart(s wmt), beginning Oct. 16. The plans will be sold exclusively at Walmart’s 2,200 retail locations and online at T-Mobile’s website. The no-contract plans focus heavily on the data services with up to 5 GB of mobile broadband service at 4G speeds and no limit to messages.

Customers who tap T-Mobile’s network for 5 GB of data in a month will see mobile broadband speeds reduced after that. The plan also includes voice minutes, but only 100 per month; each minute after the allotment will cost $0.10. After a few years of nearly unlimited voice minutes and offers such as free calls from one mobile to another, the 100 minutes of voice sounds low.

For some, however, 100 minutes may be enough. The usage trend and average revenue of voice minutes are down, being replaced by heavy growth of messaging and data services. T-Mobile’s CMO, Cole Brodman, recently told us that data demand was doubling on the network every six months. Eventually, as operators migrate to all-IP networks such as LTE, voice will simply become another type of data activity, no different than video, music or web surfing, for example.

While heavy voice users won’t be interested in the new $30 monthly plan, it could provide a subscriber boost to T-Mobile, the No. 4 operator in the U.S. Given the pace of technology changes, two-year carrier contracts are out of sync with smartphone advances — now on a nine- to 15-month cycle or less — so a contract-free plan may appeal. Additionally, those who rely on their handsets far more for data services can do so for far less than a traditional voice and data plan that can run between $50 and $80 per month. The monthly savings could make it easier to save for a phone upgrade.

If the take-up rate for the new T-Mobile plan is strong, I wonder if any other U.S. carriers will quietly follow suit with less expensive plans that focus more on data instead of voice. It has to happen at some point: Consumers are finding more services and options to replace traditional voice calls with richer or alternative forms of communication, such as text messages, video calls and VoIP solutions. All of these use data, not voice minutes, of course.

My own smartphone usage is heavily skewed towards data, and there are now many times where I carry a 3G tablet but no phone at all. Voice calls can be forwarded to my Skype In(s msft) number or callers can leave a voicemail on my Google Voice(s goog) line, for example. I can send or receive text messages at will.

And although we have no landline in our house, I still rarely use my smartphone for voice calls while home. Calling phones from my computer using Google Talk’s voice calling feature in Gmail is a solution I use daily. Maybe it’s time for me to consider T-Mobile’s new data-centric plan. More importantly: Will a plan like this work for you?

11 Responses to “T-Mobile’s $30 monthly plan favors data over voice minutes”

  1. I’m an existing T-Mobile prepaid customer who tried to switch to this new plan. I was told I couldn’t, that it’s for new activations only (and only at WalMart, which clearly contradicts the T-Mobile website). I have seen complaints at the T-Mobile support forum, and I assume I’ll see more. It’s become trite to bash cell providers, but they really do seem clueless about keeping their customers happy.

  2. Well, VoIP is great, I use it from home, but IME it can be choppy over 3G/4G – works great when you have all bars, but can drop calls when less than perfect. Many rural areas still only have “G” at best, while voice signal is nice and strong (freeways between cities). I am on T-Mobile with G2.

  3. I think this looks like a great plan for a lot of people, but I think the key is whether the devices will be the best devices available and how much they cost.

    Virgin already offers a very similar plan and it looks like they have having a decent amount of success with nice, but not leading edge android phones. For a large part of the smartphone crowd, probably the type of person who frequents this site, 2nd tier phones are nice, but probably won’t attract them as customers.

    The price of the device is the other factor. It seems that $200 or below is the magic price level for gaining mass adoption. Most people won’t consider paying $500 for a new device when they can get one subsidized for much cheaper.

    I think it’s great that T-Mobile and WalMart will offer this plan, but until the devices improve and offer compelling economics to me as a subscriber, I probably will stick to postpaid offerings.

    • I don’t disagree with on consumer’s mindsets, RE: cheaper, subsidized hardware. But I wonder what the average smartphone monthly plan is right now. I’m paying $80 a month and think that’s a reasonable guess on the average. With the new $30 plan, I’d save $50 a month, i.e.: in 10-12 months I could buy brand new hardware with the $500 to $600 saved on the monthly plan. I may make the switch, but it’s a little easier for me as I bought my Nexus One outright in January of 2010 for $530 and will likely buy my next phone at full price as well. I’d prefer the option of upgrading my hardware when I want to, not when my 2 year contract is up. I realize that I’m an outlier, though… most folks are in the situation you described.

      • If my grandfathered plan were to change I would go for this as I use the VOIP for 90% of my calls. I also would be like you and be willing to “buy” the phone when I wish and not be “held hostage” for two years to save on the phone.

      • HongCho

        In the same situation / plan with Kevin… My non-subsidized Nexus One is waiting to be upgraded by another non-subsidized Nexus phone. This $30 plan sound interesting since my voice monthly history shows that I am using about 90~110 minutes per month. The only thing is that this is marked as “pre-paid” by T-Mobile. I am unclear how it’s customer experience would be different (or not) from the current Even More Plus (no contract plan).

      • Odd you didn’t include T-Mobile’s ToGo in the analysis. $100 for 1000 minutes, often cheaper because of sales-tax free discounting at sites like eBay. For data I use the Web DayPass, 24 hours of unlimited data that costs 1.5 minutes. I’ve set it up so I can purchase the DayPass when needed with a single button press. Once you reach ToGo “Golden” status, one $100 purchase, the minutes don’t expire as long as you add minutes in a one-year period. ToGo works with any smartphone that will take a T-Mobile SIM. The only limitation there is compatibility with T-Mobile’s data network.

        I get voice, data, and text usually for less than $200 a year; tax, fee, and contract free. Compared to that, Wal*Mart’s plan seems very expensive.

      • Ray, how does that work? do you only use your phone for half of the year or every other day? I use my phone everyday and if i had to pay 1.5 minutes for a 24 hour pass, that would be 365 days X 1.5 minutes = 547.5 minutes / 12 months = $45.625 dollars per month – assuming i never use voice minutes for calls — that is more than the $30 per month plan…