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T-Mobile vastly increased the amount of high-speed 4G and 5G data it’s letting most customers use monthly, including introducing a truly unlimited data plan for the first time in years, without raising prices.
Under T-Mobile’s existing plans, and those across the wireless industry, customers can use as much data as they want every month but get slower download speeds if they exceed certain thresholds.
For example, under T-Mobile’s current Magenta plan, which starts at $70 per month for one line, a customer’s 4G and 5G downloads can slow to old 3G speeds after they use 50GB of data in one month.
Under the revised offerings, the Magenta plan, which includes 4G and 5G, will come with 100GB of high-speed data before being slowed. A new Magenta Max plan, which starts at $85 monthly with one line that also includes both 4G and 5G, won’t slow phone download speeds at all (there will still be a limit on tethering a phone connection to a laptop or other device). The max plan is the same price as T-Mobile’s old Magenta Plus plan that it replaced.
The speed differences between 3G, 4G, and 5G can be dramatic. A phone that can download an entire movie in under a minute on 5G and an entire music album in under a minute on 4G might struggle to download a single song in a minute on 3G. All of the major carriers are in the process of adding 5G capability to their networks, but T-Mobile currently has the widest availability of fast 5G.
T-Mobile said, as it had promised while merging with Sprint, that rolling out 5G technology added capacity to its network so it could allow customers to use more data. “Magenta Max is just a first taste of what our network capacity allows us to do,” T-Mobile CEO Mike Sievert said in a statement. “When you’re a heavy data user with a superfast 5G smartphone, you don’t want to be hit with speed bumps. It’s like having a Ferrari and being forced to drive it in the school zone.”
T-Mobile also announced on Monday promotional pricing for multiline unlimited accounts and a new program to woo switchers with more discounts. For example, a three-line plan on the Magenta Max plan will cost $140 per month, the same price as having two lines and $30 less than usual. And for switchers, T-Mobile will pay up to $650 per line to cover the cost of paying off a customer’s old phone.
Wall Street investors may be afraid of how much the move will cost T-Mobile. Its stock price slipped 2% at midday on Monday, while Verizon was nearly unchanged, and AT&T’s stock gained 1%.
T-Mobile’s move is the latest evolution of how wireless carriers charge customers based on usage and could prompt rivals AT&T and Verizon to follow suit.
The industry had long charged customers more for making more calls and sending more texts, adding overage charges if customers exceeded their monthly plan’s allowances. When AT&T first introduced the iPhone in 2007, it created unlimited data plans. But after a few years, with its network overwhelmed by the new smartphones, it curbed the practice and added data allowance limits to most plans.
Then, in 2016, Sprint and T-Mobile eliminated data overage charges and shifted to “unlimited” plans that let customers use as much data as they wanted but slowed download speeds after a preset limit was reached. AT&T and Verizon followed suit within a year. And the monthly data limits have risen in recent years, but remained in some form or another until T-Mobile’s latest shift.
