U.S. prepaid MVNO US Mobile has launched LTE services with a new range of unlimited plans. To mark its launch, it will offer new customers US $200.00 credit on the purchase of an Apple iPhone X.
The unlimited plans start at US $35.00 per month for up to 1 Mbps and 100 minutes and SMS (“Standard”). For speeds up to 5 Mbps and the same minutes and texts, the cost is US $45.00 per month (“Fast”), and for speeds up to 150 Mbps, customers pay US $65.00 per month (“Ludicrous”). With unlimited calls and SMS, the suite of plans cost from US $42.00 per month for up to 1 Mbps to US $70.00 for 150 Mbps, and US $47.00 to US $75.00 for 150 Mbps with hotspot usage.
US Mobile also offers build-your-own plans, either GSM or LTE, by which customers can buy bundles of calls, texts and/or data, to their own specification. Data is available from 100 MB for US $2.00 per month to US $26.00 for 5 GB per month, and voice services start at US $2.50 for 40 minutes and range up to US $15.00 for 5,000 minutes per month.
US Mobile, founded in 2015, is a budget MVNO that initially targeted college students and then seniors with low rates for 2G/3G service in the United States. According to reports, it ran over the T-Mobile network for its GSM service but now has expanded to the Verizon network for LTE (although the MVNO does not specify the carriers, only calling them “the two best networks in America” on its website). Last fall, founder and CEO Ahmed Khattak stated that US Mobile had a subscriber base of 20,000, and now aims to reach 150,000 by the end of 2018.
US Mobile is clearly responding to the broad-based consumer need for flexibility in plan offerings, and its offering of a mix-and-match menu for voice, SMS, and data in its non-unlimited offerings should meet that need very well. In the unlimited suite of plans, though, the main differentiator is data speed, which seems to us less likely to be appealing. The logic of it, according to the company, is that “by lower data speeds, the total data usage will be lower.” That is certainly true, and in theory it provides a way for users to save on data use without having to actively regulate or watch their consumption levels, or to worry about ever running out of data. For those users whose data habits do not include streaming entertainment content, for example, it could work well. However, considering the overall growth in services that require high speed for functionality, lower speeds could end up leaving subscribers frustrated. Users of the new high-end iPhone X, which the MVNO is promoting with a discount on these plans, would most likely be particularly frustrated.
In addition, plans with lower speeds may simply be harder to sell, because consumers may not feel comfortable with an offering that seems to be of lower quality. Differentiating by quantity rather than quality may be a better idea, at least form a consumer psychology point of view, in that it does not raise the issue of invidious comparison. But we will have to wait and see how well US Mobile’s strategy answers the needs of its current and prospective subscribers, now that it is offering LTE.