T-Mobile USA, MetroPCS Cut Rates on Unlimited Plans in Price War

T-Mobile USA Inc., the fourth- largest U.S. wireless carrier, is countering the industry’s shift to tiered data pricing by rolling out a new unlimited plan on Sept. 5.

The program provides unrestricted talk, text and data for $89.99 a month, T-Mobile said today in a statement. The move comes a day after MetroPCS Communications Inc. (PCS), a pay-as-you-go carrier, introduced a promotional $55 unlimited plan.

Verizon Wireless and AT&T Inc., the two largest U.S. carriers, are moving in the opposite direction. The companies, which have the benefit of speedier, next-generation networks over larger portions of the U.S., have abandoned unlimited data plans in favor of variable rates and tiered pricing.

“We believe T-Mobile felt the need to make some change in order to attract attention,” Jennifer Fritzsche, an analyst at Wells Fargo & Co. in Chicago, said today in a note to clients.

Sprint (S) Nextel Corp., the third-largest carrier, still offers an unlimited data plan, and T-Mobile’s move may be more directed at that company’s customers. T-Mobile’s $89.99 price is about $20 less than the comparable plan offered by Sprint.

The price cut is “a true shot across the bow to Sprint,” Fritzsche said.

Carriers are taking the different approaches in response to a saturated U.S. market, where it’s harder to find new customers. Verizon Wireless and AT&T are promoting shared data plans, which allow users to include multiple devices under one monthly payment.

Deutsche Telekom AG (DTE), the owner of Bellevue, Washington- based T-Mobile USA, has discussed the idea of merging its U.S. business with MetroPCS, people familiar with those talks said in May. MetroPCS is based in Richardson, Texas.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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