T-Mobile US has announced a new low-cost unlimited plan, called T-Mobile Essentials. The plan reduces the price of the operator’s standard T-Mobile One plan while offering fewer extra features. Essentials starts at US $60.00 per month for one line and goes down to US $30.00 for four lines on the same account with auto-pay. That compares to US $70.00 down to US $40.00 per line on the One plan.
Subscribers to Essentials do not get LTE roaming, a Netflix subscription or GoGo in-flight Wi-Fi, which are available on the One plan. Like One subscribers, Essentials subscribers are subject to fair-use throttling in congested areas after reaching 50 GB of usage within a month; however, according to T-Mobile, in congested environments, Essentials customers will be throttled before One subscribers are. On the other hand, like One subscribers, Essentials subscribers do benefit from T-Mobile Tuesdays deals, unlimited 3G mobile hotspot data and unlimited calls, SMS and 2G data in Mexico and Canada, plus unlimited texting in other countries.
Tarifica’s Take
T-Mobile’s “unlimited” data plans have proved very persuasive to customers, despite the fact that, technically speaking, they are not really unlimited. Still, the 50 GB upper limit is high enough that for most users it feels unlimited, and even for the heaviest users, the issue of reduced speeds in congested areas likely does not arise often enough to be a deterrent. With that in mind, T-Mobile seems to be expanding the size of its target for unlimited data, voice and texting service. With Essentials, it is attempting to gain subscribers who use a lot of mobile data, have a lower budget, and do not need some of the frills that are offered under One. And given that the operator’s network has tripled in size within the past three years to cover almost the entire U.S., the pool of potential subscribers has grown greatly. Therefore, it is wise for T-Mobile to court more different kinds of customers, with different needs.
The need for large amounts of data has also grown within the market to include a much bigger cross-section of users than previously, including so-called “budget” or lower-end users. T-Mobile Essentials, with its much lower price (especially if multiple lines and auto-are involved) seems to be a very good fit for a big market segment. LTE roaming, in-flight Wi-Fi and Netflix is not a major sacrifice—if, indeed, any sacrifice at all—for many users, and that should help sell this plan.
On the other hand, the knowledge that one will be the first to be throttled—even if one is very unlikely to reach the usage limit—may well be off-putting to some potential customers. And while the cost savings are significant, they are not exactly huge, so it is not yet clear whether T-Mobile really needs this lower tier.
On that note, T-Mobile has also added a highest-tier plan, called One Plus, which offers higher quality video streaming, faster roaming and hotspot speeds, and unlimited in-flight Wi-Fi. One Plus costs an additional US $10.00 per line per month. In today’s increasingly diverse, choice-centered marketplace, perhaps a three-tier unlimited plan structure will fit the bill.