T-Mobile wants to change how businesses buy phones and wireless services — two years after it changed how consumers do so in abolishing long-term contracts.
T-Mobile says its new business plans are about simplicity, with rates based on how many lines and how much data the company needs. Traditionally, these rates are negotiated case by case. T-Mobile says that puts smaller and medium-size businesses at a disadvantage. The company believes its new plans will be particularly attractive to them.
“Anybody can figure out the cost,” said John Legere, CEO of T-Mobile, the fourth-largest U.S. wireless company. “At the counter, on the phone, in two minutes we can tell you exactly how much it’s going to cost, how to get you over, what we can do for your family.”
T-Mobile is also offering new deals for families of employees, along with a pledge to pay the balance of phone installment plans for those switching from other rivals. Many carriers offer discounts for families of employees, but T-Mobile says that’s typically done as a percentage off the most expensive rate for the first phone. Legere said the company will offer steeper discounts by applying cheaper, multiple-line rates more quickly.
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Two years ago this month, T-Mobile shattered a long-standing industry practice of tying consumers to two-year service contracts in exchange for phone discounts. Customers now pay full price for phones in installments, and the company no longer inflates rates for voice, text and data services to make up for those phone discounts. Verizon, AT&T and Sprint soon followed with their own no-contract plans.
Since then, T-Mobile also has introduced free data roaming abroad and programs for upgrading phones more frequently.
The programs have helped T-Mobile gain more than 4 million phone customers in the lucrative “postpaid” plans last year and get closer to the subscriber count of Sprint, the No. 3 wireless carrier.
Sprint, based in Overland Park, on Monday offered its own new small-business service bundle of high-speed Internet, Wi-Fi, and landline and mobile calling. It starts at $200 a month per employee with an optional $40 a month for unlimited wireless texting, calling and data, about $10 less than rival plans, a Sprint official said.
Because the Sprint bundle includes more than wireless service, it’s difficult to compare it with the T-Mobile offers.
By T-Mobile’s own admission, the company doesn’t have a lot of business customers today, in part because its network has historically trailed those of Verizon and AT&T. T-Mobile’s network is improving, and the company believes it can draw many of those business customers with simplified plans.
The first 19 lines are $16 each, and there’s a 10-line minimum. Those needing 20 to 1,000 pay $15 each for all lines, including the first 19. Those needing more pay $10 per line on their entire plan.
Each line gets unlimited voice and text and 1 gigabyte of data. Companies can buy more data per line or as a pool that can be shared, or any combination of the two. T-Mobile won’t charge overage fees, so companies can pay only for what they need and use, though there are some minimums.
T-Mobile also said businesses that bought extra data would get a free domain name and website from GoDaddy, a domain registration and Web hosting company.