Business

August 22, 2012

Competing with bigger carriers, T-Mobile uncaps its data plan

Unlimited wireless data is back. After sliding off the menu of cellphone plans, data plans with no caps are making a comeback at smaller cellphone companies trying to compete with AT&T, Verizon, and Overland Park-based Sprint Nextel.

Unlimited wireless data is back. After sliding off the menu of cellphone plans, data plans with no caps are making a comeback at smaller cellphone companies trying to compete with AT, Verizon, and Sprint Nextel.

On Wednesday, T-Mobile USA said it would start selling an unlimited-data plan on Sept. 5. It stopped sales of its previous unlimited-data plans early last year.

T-Mobile USA is the country’s fourth-largest cellphone carrier, with 33.2 million subscribers.

On Tuesday, No. 5 carrier MetroPCS Communications Inc. cut the price of its unlimited-data plan from $70 to $55 a month, as a promotion for a limited time. The plan includes unlimited texting and calls.

No. 3 carrier Sprint Nextel, based in Overland Park, has an unlimited-data plan and credits it with helping it attract customers for its smartphones.

A Sprint spokeswoman offered no direct comment about the new price plans from T-Mobile and MetroPCS.

She called Sprint’s unlimited data plans “comprehensive,” given Sprint’s lineup of devices such as the iPhone, and award-winning customer service.

T-Mobile’s unlimited plan costs $20 a month when added to a regular calling and texting plan, and $30 when added to a cheaper “Value” plan offered to customers who bring their own phones.

Jennifer Fritzsche, an analyst at Wells Fargo Co. in Chicago, said, “We believe T-Mobile felt the need to make some change in order to attract attention.”

Fritzsche also called the price cut “a true shot across the bow to Sprint.”

The moves by T-Mobile USA and MetroPCS, neither of which sell the iPhone, come as the three larger carriers are thought to be gearing up to begin selling the iPhone 5 in a month or so.

No. 2 carrier AT stopped signing up customers for unlimited data plans two years ago. It was followed by No. 1 Verizon last year.

Both of the larger carriers have shifted toward lifting all limits on calls and texting, but limiting data usage. From a network management perspective, this makes sense, since calls and texts use very little network capacity. But video downloads and other data use can clog the network, slowing the service for everyone.

T-Mobile USA and MetroPCS may have spare capacity on their networks, giving them some leeway, at least for now, in offering unlimited data. T-Mobile has upgraded its network to higher speeds but is losing customers.

Mark Davis of The Star contributed to this story.

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