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T-Mobile goes off-brand with new prepaid service GoSmart

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T-Mobile USA has launched a new prepaid service for the highly budget-minded, and in the process it’s taken a page from Sprint’s(s s) book. Instead of making the new plans part of its regular magenta-tinged T-Mobile portfolio, the carrier has created a whole new brand: GoSmart Mobile.

GoSmart plans start at $30 a month, including unlimited talk and text. For $5 more a month, you can get unlimited Web access, but only on T-Mobile’s 2G GPRS and EDGE networks. For $45 a month, you can upgrade to the 3G HSPA network and get 5 GB of data, after which you’ll be throttled down to 2G speeds. It’s important to note T-Mo is specifically saying 3G here even though its marketing its HSPA+ network as 4G. The implication is that even GoSmart users on the $45 plan won’t get access to the full bandwidth available over its data networks.

GoSmart is offering only two devices without subsidies, a $50 Alcatel feature phone and a $100 ZTE Android 2.3 device, which is a pretty good bargain for a smartphone. GoSmart’s main go-to-market package appears to be a SIM kit that allows a customer to activate any GSM device they bring to the network. That strategy seems to replicate the SIM services that have proven so successful for Tracfone(s amex) and other mobile virtual network operators.

But why is T-Mobile creating an entirely new brand for prepaid when it already sells a lot of contract-free plans under the official T-Mobile? The carrier is probably trying to create two distinct classes of prepaid of service so it can tailor its marketing for each. T-Mobile’s branded prepaid emphasizes T-Mobile HSPA+ data network, bigger and faster data plans and higher-end devices.

Meanwhile, GoSmart is clearly targeted at the more voice-centric budget user. Sprint follows the same approach, though its segmented its prepaid services into numerous brands, including Virgin Mobile, Boost Mobile and Assurance Wireless.

6 Responses to “T-Mobile goes off-brand with new prepaid service GoSmart”

  1. Edward J Willey III

    I suspect that customers needing what’s becoming “enterprise grade” mobile data will tend to remain with the big carriers, which have the dominant position in 4G. This includes some pretty serious HSPA+ speeds on T-Mobile and AT&T. I’m not sure if there’s really a huge differentiator as between the big carriers and the MVNO in the view of voice-centric and budget-conscious consumers – assuming that prices for lower-bandwidth and voice-centric plans ultimately flatten out. It’s like selling non-fresh baked bread in the grocery store. At some level, you just aren’t expecting the superior quality. And that’s ok. What would be a serious game changer is a smaller carrier or MVNO offering “enterprise grade” services at a much better value, or perhaps such a small player offering unique services. It’s definitely an interesting time to be in this industry.

  2. Kevin Fitchard

    Hi Horton,

    I suspect the MVNO factor won’t be that big just yet since almost every independent MVNO save TracFone has a pretty small customer base. The number of connections the carriers have an LTE is still relatively small, but as evidenced by Verizon’s numbers the most hard-core data users are moving to 4G. It seems the carriers are preparing an eventually mass exodus from 3G though. Verizon has already designated its 3G network a prepaid network for all practical purposes. There’s also the issue of spectrum refarming. T-Mobile is already shutting down most of its 2G network and portions of HSPA+ to make room for LTE. All of the carriers will eventually do the same.

  3. Thanks for the link. I am completely a price-sensitive shopper and this seems very good.

    The question for me is if this and just about every other MNVO provide 3G data, will the 3G networks become congested (if they sign up tons of customers)? Or will people upgrading to 4G radios offload enough connections from the existing 3G networks?

  4. brucebolton

    I wonder how long plans that are $70+ offered by brand name providers (ATT, Verizon, Sprint, Tmobile) can survive when they are offering a “good enough” unlimited service for $50 or less? Other than business users will people pay more than a $20 premium?