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T-Mobile's "radical" changes double-down on flat-rate data plan

John Cox | March 28, 2013
In a profane, foul-mouthed, ad-libbed presentation, T-Mobile CEO John Legere Tuesday trumpeted his company's previously announced "unlimited" data plans, scrapped its cellular contracts, launched its belated LTE network, and revealed that T-Mobile, finally, would offer the iPhone.

Legere predicted the carrier's acquisition of MetroPCS will be approved by regulators. When that happens, T-Mobile will move to merge the existing MetroPCS LTE network with its own unfolding LTE deployment, and reorganize the MetroPCS 1900 MHz CDMA spectrum for T-Mobile's HSPA+ network. Among other benefits, T-Mobile says it will be able to offer 2 x 20 MHz of LTE in many areas, supporting dense, high-capacity, high-speed LTE-Advanced networks.

Fierce Wireless used data from Mosaik Solutions to map out the spectrum holdings of T-Mobile/MetroPCS.  

"We've got more spectrum than we know what to do with," Legere boasted.

Whether any of this changes the fundamental dynamics and economics of the wireless industry is debatable.

Spectrum acquisitions are always valuable; LTE offers much more efficient use of available spectrum; LTE-Advanced will let T-Mobile and other carriers combine, or "aggregate," separate spectrum chunks. T-Mobile seems to be betting that having "enough" spectrum will let it continue to offer "unlimited" use of a still-limited resource.

Legere claims that smartphone prices are "unbelievably high." That hasn't stopped millions and millions of U.S. consumers - shielded by carrier subsidies from the real price of smartphones -- from buying the iPhone, or other high-end smartphones. T-Mobile isn't offering smartphones at lower prices: it's offering modest discounts off the full price, at least in the case of iPhone 5. The "savings" he touts are almost entirely due to cheaper rate plans.

Legere didn't talk about how T-Mobile will sustain a flat-rate, "all you can eat" data model. In that sense, T-Mobile's "revolutionary" initiative is in fact reactionary: insisting that the status quo is still viable.

Legere is right that "no one" likes, let alone reads, cellular contracts. But one of the biggest flashpoint for consumer dissatisfaction, or more accurately rage, has been the persistently lousy customer service. In JD Power's recent "2013 Wireless Customer Care Ratings," for the Big Four "full service" mobile carriers, T-Mobile ranked dead last.

Legere didn't talk about what he's doing to improve that.

 

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