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T-Mobile US Raises Unlimited Data Plan Price - What's Next?
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T-Mobile US Inc. (TMUS - Free Report) , the third-largest national wireless operator in the U.S., recently raised the price of its best unlimited data plan -- One Plus. Management raised the price from $5 to $10 a month in addition to the monthly fee it charges for its basic T-Mobile One plan. A single line of T-Mobile One Plus now costs $80 a month, while four lines cost a total of $200.
The company called it the end of promo program. However, all additional features will remain the same. The One Plus plan includes HD video, a free digits line, which enables users to move phone numbers between devices and use multiple numbers on a single device, and unlimited Gogo in-flight Wi-Fi service.
Unlimited Data Plan War
Wireless consumers pay millions extra in the form of added surcharges, taxes, monthly fees and carrier price hikes every year. The practice seems to have reached its peak and carriers are still looking for new ways to fetch more from their customers. Several consumer groups have criticized extra fees because these are easily overlooked and lead to higher-than-advertised price payments.
As a reverse action to such moves, the decision by T-Mobile US to remove additional fees and taxes is an exceptional step. It seems that the company is consumer-friendly and thinks about their benefits and facilities.
Verizon Communications Inc. (VZ - Free Report) offers a single line of unlimited data for $80 a month with a second line for $60. AT&T Inc.'s (T - Free Report) unlimited plan starts at $100 a month, but it doesn’t include monthly taxes and fees, consequently raising the final cost. Notably, Verizon and AT&T do not include those fees in their advertised rates, either. However, T-Mobile US does.
Sprint Corp. (S - Free Report) also upgraded its unlimited data plan. Now, new customers can buy a single line on Sprint’s unlimited plan for $50 and two to five lines for $90, per month. Any extra line will cost $40 each. These rates will remain effective till Mar 31, 2018. After that, the company will raise the prices back to normal rates, per which, one line will cost $60 a month, two lines will cost $100 and every line beyond that will cost an additional $30.
The wireless service business model of T-Mobile US hinges on its “Un-Carrier” value proposition and its strategic marketing efforts. The U.S. wireless market is highly competitive with the presence of mobile behemoths such as Verizon, AT&T and Sprint.
Despite this, T-Mobile US’s “Un-Carrier” service helped the company establish a strong foothold. The service was launched in Mar 2013 to offer a series of price concessions like no annual service contract, equipment instalment facility and free international data roaming. Offers like unlimited data download and international roaming facility, coupled with no annual service contract, garnered significant market traction.
However, the recent price rise will make the company’s unlimited data plan less attractive compared with Verizon. For T-Mobile US, four lines will now cost $200 per month while for Verizon it will be $180.
In order to lure customers from competitors, T-Mobile US recently launched several low-priced service plans for individual consumers as well as small business entities. Although the company has increased its top line by adding customers, it is yet to improve its bottom line. At this juncture, a less attractive plan may dent the company’s top line and damage the overall financial results.
Price Performance of T-Mobile US
Year to date, the stock price of T-Mobile US has gained 3.37%. This figure is better than the Zacks categorized U.S National Wireless industry, which declined 11.28% in the same time period.
The U.S. wireless market is highly competitive and almost saturated. Success in the wireless service business largely depends on technical superiority, quality of services and scalability. In all three areas, T-Mobile US is far behind its peers, Verizon Communications and AT&T. Also, Sprint is extensively restructuring its business model and leaving no stone unturned to gain back the third largest position from T-Mobile US. The stock is currently carrying a Zacks Rank #4 (Sell).
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T-Mobile US Raises Unlimited Data Plan Price - What's Next?
T-Mobile US Inc. (TMUS - Free Report) , the third-largest national wireless operator in the U.S., recently raised the price of its best unlimited data plan -- One Plus. Management raised the price from $5 to $10 a month in addition to the monthly fee it charges for its basic T-Mobile One plan. A single line of T-Mobile One Plus now costs $80 a month, while four lines cost a total of $200.
The company called it the end of promo program. However, all additional features will remain the same. The One Plus plan includes HD video, a free digits line, which enables users to move phone numbers between devices and use multiple numbers on a single device, and unlimited Gogo in-flight Wi-Fi service.
Unlimited Data Plan War
Wireless consumers pay millions extra in the form of added surcharges, taxes, monthly fees and carrier price hikes every year. The practice seems to have reached its peak and carriers are still looking for new ways to fetch more from their customers. Several consumer groups have criticized extra fees because these are easily overlooked and lead to higher-than-advertised price payments.
As a reverse action to such moves, the decision by T-Mobile US to remove additional fees and taxes is an exceptional step. It seems that the company is consumer-friendly and thinks about their benefits and facilities.
Verizon Communications Inc. (VZ - Free Report) offers a single line of unlimited data for $80 a month with a second line for $60. AT&T Inc.'s (T - Free Report) unlimited plan starts at $100 a month, but it doesn’t include monthly taxes and fees, consequently raising the final cost. Notably, Verizon and AT&T do not include those fees in their advertised rates, either. However, T-Mobile US does.
Sprint Corp. (S - Free Report) also upgraded its unlimited data plan. Now, new customers can buy a single line on Sprint’s unlimited plan for $50 and two to five lines for $90, per month. Any extra line will cost $40 each. These rates will remain effective till Mar 31, 2018. After that, the company will raise the prices back to normal rates, per which, one line will cost $60 a month, two lines will cost $100 and every line beyond that will cost an additional $30.
Verizon, AT&T and Sprint currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Will T-Mobile US Lose Competitiveness?
The wireless service business model of T-Mobile US hinges on its “Un-Carrier” value proposition and its strategic marketing efforts. The U.S. wireless market is highly competitive with the presence of mobile behemoths such as Verizon, AT&T and Sprint.
Despite this, T-Mobile US’s “Un-Carrier” service helped the company establish a strong foothold. The service was launched in Mar 2013 to offer a series of price concessions like no annual service contract, equipment instalment facility and free international data roaming. Offers like unlimited data download and international roaming facility, coupled with no annual service contract, garnered significant market traction.
However, the recent price rise will make the company’s unlimited data plan less attractive compared with Verizon. For T-Mobile US, four lines will now cost $200 per month while for Verizon it will be $180.
In order to lure customers from competitors, T-Mobile US recently launched several low-priced service plans for individual consumers as well as small business entities. Although the company has increased its top line by adding customers, it is yet to improve its bottom line. At this juncture, a less attractive plan may dent the company’s top line and damage the overall financial results.
Price Performance of T-Mobile US
Year to date, the stock price of T-Mobile US has gained 3.37%. This figure is better than the Zacks categorized U.S National Wireless industry, which declined 11.28% in the same time period.
The U.S. wireless market is highly competitive and almost saturated. Success in the wireless service business largely depends on technical superiority, quality of services and scalability. In all three areas, T-Mobile US is far behind its peers, Verizon Communications and AT&T. Also, Sprint is extensively restructuring its business model and leaving no stone unturned to gain back the third largest position from T-Mobile US. The stock is currently carrying a Zacks Rank #4 (Sell).
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>