The tables are turning in the mobile industry, and in a bid for subscriber growth T-Mobile US Inc. (NYSE:TMUS) is introducing a new family plan that aims to undercut its rivals on prices.
T-Mobile's new Simple Choice family plan , announced Monday, provides a family of four unlimited talk, text and up to 10 gigabytes of data for $100 per month. Similar plans such as AT&T's Share Value, Verizon's More Everything and Sprint's Family plan cost about $60 more per month, leaving Sprint Corp.’s (NYSE:S) $60 per month Family plan as the cheapest option.
T-Mobile's limited time offer comes after AT&T Inc. (NYSE:T) said it had significant subscriber gains in its second quarter, and Verizon Communications Inc. (NYSE:VZ) recorded an increase in profit, propelled by a jump in tablet use. T-Mobile will report second-quarter results Thursday before the opening bell.
In his usual style, T-Mobile CEO John Legere took to his company's blog on Monday to take jabs at the network’s competition and advertise the new Simple Choice family plan option. In particular, Legere called AT&T’s “Best Ever" pricing for families a “joke.”
“It’s a competitive response," Roger Entner, founder of market research firm Recon Analytics, in Dedham, Massachusetts, told the International Business Times in July, about the ongoing price wars between carriers. "It shows how competitive the market is and if [a network] introduces a new offer the rivals are taking it seriously.”
Despite setting the tone for the rest of the mobile industry for more than a year, T-Mobile hasn't been immune to the pressure to cut its own prices in tow with rivals. Its limited time, special offer is good from July 30 through September, but read the fine print before signing up. The 10GB of data that comes with the plan isn't sharable, and each line on the plan is allotted 2.5GB of data. To upgrade to a new device, subscribers would have to pay an additional $10 per line, per month under T-Mobile’s Jump program. Other carriers include an early upgrade option within their family plans. The Simple Choice pricing for a family of four, with the data option, ends Jan. 2, 2016.
Kevin Manning, an analyst for BMO Capital Markets said in a note to investors Monday that it’s unlikely the Simple Choice plan for a family of four will be very successful, largely because the service won’t be offered permanently. T-Mobile offers other family options under its Simple Choice plan, for 2, 3 and 5 lines. These options are among the networks usual roster of services.