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T-Mobile's new business pricing targets AT&T and Verizon

Matt Hamblen | March 19, 2015
T-Mobile is aggressively going after business customers by offering the same kind of low-cost, simplified pricing and monthly service plans it has used to good effect with consumers.

At T-Mobile, overages won't be penalized and each additional gigabyte will be charged at the same rate, he said. T-Mobile also won't charge data access fees atop of data charges, as some competitors do, he said.

Legere showed a slide in his presentation that said there is no contract for business customers and no overage charges, as well as global data service, Wi-Fi calling, free texting on flights and the ability to stash (or carry over) unused data each month. That's similar to the T-Mobile consumer data stash program.

Mike Sievert, chief operating officer for T-Mobile, estimated that an average American business could save $5,100 on 20 lines over two years with T-Mobile.

In addition to simplified pricing, the carrier will also give business customers with at least one line with additional paid data a free .com domain and website optimized for mobile viewing. T-Mobile is partnering with GoDaddy for the service. T-Mobile will also provide free .com Office 365 email addresses for every T-Mobile business line with additional paid data.

T-Mobile estimated the free services would normally cost $1,300 a year for a 20-person business. Almost half of American small business don't have a Web site, T-Mobile said.

Families of T-Mobile business customers can also save up to 50% on Simple Choice family plans. The savings will amount to $876 for a family with two lines over two years, T-Mobile said.

Legere and Sievert said they recognize that T-Mobile so far has only a small fraction of the $83 billion business voice and data market in the U.S. In 2014, AT&T and Verizon accounted for 72% of that market. For each, about 40% of their revenues came from business customers.

T-Mobile has benefited from aggressive pricing and service plans with consumers and is growing at a healthy pace that provides the platform to move aggressively now to go after business users, Legere argued. The move to Un-carrier for Business is "not a hail Mary pass," he said. "We are growing like crazy and and our EBITDA is expanding more than anyone in the industry. This is logical, planned growth."

T-Mobile now has 55 million customers and captured 100% of the industry growth in the postpaid segment in 2014, he said. Customer churn (also known as loss) dropped to 1.4% in the last quarter, down from 2.5% in 2012.

"We are moving to having more on every single facet that exists, including a bigger, broader, faster, wider network than AT&T and Verizon and that's what scares the hell out of them," Legere said.

Based on information on its website, T-Mobile's simplified pricing plan seems to be created primarily for small or medium businesses, with needs for up to 2,000 lines under the Simple Choice for Business plan.


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