Some thoughts on T-Mobile’s UN-carrier Makeover

T-Mobile is branding themselves as the UN-carrier. The core of their strategy is to move away from contracts, away from subsidized phones, with lower, simplified pricing.

I am a long-time Tmo customer and, as the low-cost and most disruptive of the 4 big U.S. carriers, I have always wished them well, but mostly in vain. I really hope they get some traction with this new approach, but I have some skepticism about whether they have the marketing skills and deep pockets enough to carry it off. Here’s hoping…

Where the new pricing really shines is Family plans. 3rd, 4th, 5th lines are only $10 each, and they come with 500 Mb of data. 500 Mb is not bad, if you are just reasonably careful you can mkae it through the month, and if you do go over, for just $10 more you get 2 Gb additional data. So there is no horrible cliff you fall off when you exceed your cap. 

For those in the know, what makes the value plan approach especially appealing is the ability to buy a top-of-the-line, Nexus phone for $299. That is an amazing price. When you add in the carrier’s upgrade fee, it isn’t all that much more than the price of a subsidized phone.

The question I have: is the low Nexus pricing going to be sustained? Or will it creep upward over time? If sustained, the Value Plan case is compelling. If not, it is still a good case, but a much harder sell.

But back to Marketing. I would really like to have seen Tmobile and Google do some cooperative advertising. But probably that would have alienated both the other Carriers, and the Handset manufacturers. Not to mention Tmo’s new friend, Apple.

There is a strategic problem for Tmo. In a sense, they have engaged in “unilateral disarmament”. If it were easy for Verizon customers to switch to TMobile, then TMo’s value proposition might gain a lot of switchers. The problem is that it is not easy for contract customers to switch, even if they would be interested. But in the meantime, Tmobile has made it easy for their customers to leave without a moment’s notice.

I have made my bet on Tmo. I am mid-way through a contract, so I need to wait a few months for the math of switching to work for me. But for my two recent phone purchases (family of 5), rather than use upgrades, I bought Nexus 4s. So good luck, Tmo.


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