T-Mobile Turns An Industry On Its Ear

http://www.nytimes.com/2014/02/27/technology/personaltech/t-mobile-turns-an-industry-on-its-ear-in-a-fight-for-its-life.html

by davmre • 12 years ago

115 80 12 years ago

nytimes.com

coin• 12 years ago

T-Mobile's free 200MB/month for tablets is great, especially for text and email on the go.

Side note: nytimes's website on mobile is totally annoying. No pinchzoom and double tap mucks with the font size. Just as we had Flash blockers back in the day, I look forward JavaScript blockers.

gcb0• 12 years ago

just so you cant zoom in the text and not view the ads. IAB pricing model is going over (the technically fallible and worthless) viewable ad instead of ad impression.

just another way third parties found to take the advertiser money and not pass it down to the publishers.

nfoz2• 12 years ago

The no-zooming thing is probably implemented with non-javascript parts of html/css3.

Yes, the whole web sucks now. What you need is a user-agent that chooses to carefully not implement some of its stupidity.

frenchman_in_ny• 12 years ago

I had completely missed the fact that you can get a free 200MB/mo, all you have to do is pay $10 for the SIM. Thanks for the heads up!

Negitivefrags• 12 years ago

The firm’s real innovation began last March, though, when it announced its Simple Choice plan

This is how the rest of the world already works.

I buy an iPhone direct from Apple and then pay ~15USD per month on service with no contract.

r00fus• 12 years ago

This is how the rest of the world already works.

Look at how large parts of the world already deal with healthcare, and witness all the vitriol and anger against Obamacare which moved the US closer in line with with most other developed nations.

The US market has serious issues dealing with progressive change, due to massive corruption and regulatory capture.

xerophtye• 12 years ago

Glad to see someone else here who is baffled by the state of American telecom industry as I am.

So here's what i understand about the industry prior to TMobile's "innovations":

- You buy phones from the Cellular service provider, which are bundled with the service (hence apparently higher bills)

- Since the phone is bundled with the service, i assume even if you don't use the service you still pay a good amount every month.

- You have a contract with the Cellular service which forces you to stick with them till the term of the contract.

- So its usually painful to switch carriers (breaking fee etc). (Do you get to keep your old number if you switch?)

- Since you are stuck with the cellular service they can pretty much charge you whatever they want during that time. Sure they gotta give you an incentive to renew the contract but as i see it the competition between carriers isn't that much.

Now here's how things work in my country:

- You buy mobile independently and then pay for the service

- You pay the service typically below 3USD for most users. And it depends ENTIRELY on your usage. No usage = zero payment.

- No contracts with the carrier. You get to switch at the drop of a hat.

- Thing is, cellular services mostly "prepaid" (post-paid is available but few users go for that). So you just pay the service in advance what you think will use and that is credited to your account. This doesn't expire for several months so no worries about over-estimating.

- So switching a service = getting a simcard of that service, adding balance to it (which you can from any corner store).

- Oh they even let you keep the number provided by the old carrier so virtually no switching costs.

- Hence the competition here is unimaginable! "Price war" would be an understatement. They even keep giving incentives to inactive customers to plug in their old sim cards.

- Its so freaking affordable people buy multiple-sim cellphones so they can use multiple services at the same time (hence utilizing best of each provider)

NoPiece• 12 years ago

The simple version is: US cell phone contract = service bundled with a small loan for a phone.

It isn't that bad. They can't charge you whatever they want, your plan is locked in, and if they change it you can leave without penalty. For whatever reason you leave, you can take your number. Pre paid plans are available as options.

Nothing forces you to stay with a carrier. The penalty is just recouping some of the unpaid value of the phone. You owe less as time goes because you are paying back the value of the phone through your contract.

Kurtz79• 12 years ago

Although in "the rest of the world", where I'm from, you have the option of buying the mobile separately, and then paying for a separate contract (or top-up sim cards), the upfront cost of a new top-of-the-line mobile devices is much higher (iPhone 5S 700 EUR), so most people I know end up choosing the contract+phone option anyway.

jtchang• 12 years ago

The author of this article feels that he would be happy to see T-Mobile die trying.

I personally have nothing but respect for T-Mobile. It is hard to change fundamental things such as pricing when you are such a large corporation. Doubly hard if your competitors have successfully proven contract pricing works.

I hope T-Mobile continues to innovate. The telecom industry is overall a dinosaur. What keeps them alive is their infrastructure and rights of way. If we ever get a wireless alternative that is as fast as fiber (and easily deployable) we'd see the end of traditional telecoms as we know it.

qq66• 12 years ago

I don't think the author specifically wants to see T-Mobile die trying as much as he enjoys the benefits of T-Mobile's aggression on the entire industry, even if T-Mobile itself is not financially strong enough to survive its attack.

SiVal4• 12 years ago

I think it was worded poorly, but I think the author was hoping T-Mobile would fight as hard as they could, not holding anything back, regardless of the cost to themselves, because of all the good it's doing the rest of us.

toomuchtodo• 12 years ago

If we ever get a wireless alternative that is as fast as fiber (and easily deployable) we'd see the end of traditional telecoms as we know it.

Like every Google Fiber set top box being a wireless access point accessible to other Google Fiber customers, as well as free to Android users? And Google using their fiber right of ways to deploy 802.11ac or picocells?

Only in my dreams sir.

dm22• 12 years ago

It would be neat if they offered a discount for them being wireless access points accessible to other Google Fiber customers.

I'm not sure about the Android part, just because it would be almost impossible to prevent someone from running all connections in a house through an Android device and get free internet.

derefr• 12 years ago

Like every Google Fiber set top box being a wireless access point accessible to other Google Fiber customer...

There's a provider (Shaw) doing this part in Canada: http://www.shaw.ca/wifi/

robin_reala• 12 years ago

This is exactly what http://fon.com/ do across large chunks of the world.

rayiner4• 12 years ago

The author isn't rooting for T-Mobile to die. He's pointing out that playing this game is capital intensive, and not making a lot of money is a long term liability when it comes to having capital to invest in your network.

He's probably not wrong. T-Mobile got a huge boost in the short term from all the cash and spectrum they got as part of the breakup of the merger with ATT. It was a whole year of CapEx ($3-5bn). That let them build out a kind of competitive LTE network. But that's a one time thing. If they continue to lose money, they won't have the capital to play the LTE+1 game.

samstave• 12 years ago

If I could meet the person who invented termination fees for month-to-month service, I would break their arms.

A provider who can cut your service off immediately for non-payment and charge you to cancel your plan, BUT which cannot be penalized for shitty/failed/falsely advertised service is lead by criminals.

Contract pricing, with termination fees and terms which do not allow for reciprocal credit for failure to provide the contracted service (i.e. without an SLA) should be fucking illegal.

walshemj• 12 years ago

And you would have to repeal several of the core laws of physics to get wireless to be as fast as fibre.

thechut• 12 years ago

This is absolutely right. But remember the most powerful way to speak to a company is with your dollars, so switch to T-Mobile.

danielweber• 12 years ago

T-Mobile is great as a company for customer service. There network isn't as good as AT&T's, but it seems to be getting better. I don't often pick up my phone in my house and see zero bars on it any more, but I still do occasionally.

rayiner4• 12 years ago

I really love T-Mobile, but its also a validation of all the ideas that traditional telecom regulation rejects. T-Mobile has focused its capital on urban areas and wealthier areas. My LTE download speeds in downtown Phila or DC are great. Service in the poor part of Wilmington where I live? I'm lucky to get 1-2 megabit on HSPA. People are rightfully excited about T-Mobile, but let's not forget that its success to date validates the method of ignoring rural and poorer areas to maximize service in Tue areas that are both dense enough to build out in a capital efficient way and wealthy enough to afford high speed service to justify the investment.

GFK_of_xmaspast• 12 years ago

I live in Silicon Valley and my AT&T service is, loosely speaking, "pretty shitty".

rayiner4• 12 years ago

http://www.fiercewireless.com/tech/story/verizon-sprint-lead....

ATT covers 280m people with LTE versus T-Mobile's 210m. Note the number of posters here saying they'd switch to TMobile if coverage was better. Anecdotally, on the east coast between Phila and DC, TMobile is good in the major cities and along thebhighway, but useless in many suburbs. Of course, ATT also spends more in a quarter on CapEx as TMobile does in a year.

AnthonyMouse2• 12 years ago

I really love T-Mobile, but its also a validation of all the ideas that traditional telecom regulation rejects.

It's quite possible that traditional telecom regulation is ill conceived. Rural build out requirements are effectively a tax on providing service in urban areas used to subsidize providing service in rural areas. It's government interference in the market -- and maybe that's necessary to get what we want, but we should at least admit what we're doing so we can properly evaluate it.

In particular, if we want to have a subsidy for rural build outs, that doesn't automatically mean the money should come from telecommunication customers in urban areas. The premise itself is that telecommunications service is something good that we want to promote and make more affordable, so making it less affordable for urban customers in order to subsidize rural customers is robbing Peter to pay Paul. If we have to rob somebody then we should either rob somebody we don't like (e.g. tax cigarettes or gas guzzlers) or the money should come from everyone equitably via a tax on general sales/income/etc.

"Traditional telecom regulation" implies that we can't have gigabit fiber in New York City (population density ~27,500/sq mi) until it is cost effective to also install it in Loving County, Texas (population density ~0.1/sq mi). That seems significantly less desirable than, for example, setting aside a fixed amount of subsidy each year and dividing it between each carrier based on the number of citizens newly served who were not previously served at a given class of service. That way the market works and the most efficient markets are not delayed (i.e. NYC gets gigabit fiber right away) but as the low hanging fruit is picked and the number of new residents offered service per year decreases, the subsidy per each newly served resident increases until the subsidy for installing service to the last unserved resident finally exceeds the cost of installing the service.

rayiner4• 12 years ago

I was thinking about this just the other day. Fixed subsidy per resident, and we see how far that gets you. The subsidy we have now is not a small thing. Even ignoring the cross subsidies intrinsic in build out requirements, we directly subsidize rural wired service to the tune of $4.5 billion per year via taxing long distance voice service. That's as much as TMobile spends on CapEx every year to build out an LTE network avaible to 200 million mostly urban customers.

bluedino• 12 years ago

> T-Mobile has focused its capital on urban areas and wealthier areas.

Outside of major metro areas T-mobile coverage can be next to nothing. T-mobile only has 2G data here while AT&T, Verizon, and even Sprint have 4G coverage.

I'd love to move to their service and save some cash but it's just not possible.

50MilesToGo• 12 years ago

I decided to go with T-Mobile on my iPad Air - after 3 months I'm sold and will be switching my mobile as soon as possible. Apparently, T-Mobile will pay early termination fees for not only family plans, but also business accounts registered with a Tax ID.

kabdib3• 12 years ago

Certainly walking into my current provider's storefront and mentioning T-Mobile finally broke loose a long-standing warranty issue I had with AT&T.

"Fix this, or I'm gonna walk."

"Suuurrre you are."

"No, really."

[go to other end of the mall to the T-Mobile store, talk to sales guy -- who frankly almost got me to switch right then. Walk back to AT&T anyway.]

"Hey, do you want me to still be your customer?" [Wave quote]. "You decide. Ten, nine, eight, seven..."

"Okay, okay!"

I hate dealing with phone sales worse than I hate buying a car.

lostlogin• 12 years ago

Do people buy online, own their phones outright and hop providers where you live? And if not, why not?

bjelkeman-again• 12 years ago

So why didn't you switch?

kabdib3• 12 years ago

I have an absolutely unlimited data plan (long story...) that I'd hate to lose, and T-Mobile would have been a bit more expensive.

asabjorn• 12 years ago

I used to be an AT&T customer, and although the reduced price is awesome their no-nonse way of doing business has been much more impactful. Never having to deal with AT&T, especially after they tack on ridiculous fees when I travel internationally, is arguable the best T-mobile feature.

SiVal4• 12 years ago

How ironic. I'm packing for a brief trip to London, and I'd like to use my iPhone 5 while I'm there. T-Mobile offers terrific deals on sim cards in the UK. For about 15GBP or so, I could easily get a sim card with more talk minutes, texts, and data than I could possibly use during my short trip. It's so simple, I could get it from a vending machine at Heathrow.

Perfect. The only bad news is that AT&T won't allow it. I talked to them. My phone is locked until later this year. No, they won't unlock it yet, even briefly. Despite the fact that I'll still be paying the full monthly contract fee I agreed to, the fee that is paying in full for my subsidized phone, any additional service I might want to add must also be purchased from AT&T.

"Sir, I'm afraid your only option is to choose one of our Global Plans, beginning at $1.50 per minute...."

I obviously need to do more research so that the moment my phone is unshackled, I'll know where to run with it.

Of course I'm dreaming of the day when all the lumpiness will smooth out and in most countries you'll just use whatever devices you like to connect to the ubiquitous Internet. Just an international data subscription that you use for everything, everywhere. Talk, text, TV, Web...are all just your favorite apps (plus subscriptions to content from millions of competing producers.)

<sigh> While waiting for utopia, I guess I'll have to figure out the wifi situation in downtown London.

kul• 12 years ago

You should buy a cheap android, e.g. N5 or the Moto X. If you travel a lot, you'll quickly recoup the money via saved roaming costs. I learned this the hard way.

fpgeek• 12 years ago

Can't you pay some sort of penalty and switch to one of AT&T's new, cheaper T-Mobile-like value plans?

That might not pencil out on its own terms because you're relatively close to the end of your contract, but I think that would take your phone out of subsidy so you can unlock it. The added flexibility while traveling might make the switch worth it.

SiVal4• 12 years ago

I don't know yet, and I'm too busy packing to look into it now---but I will.

asnyder• 12 years ago

I don't know about iPhones, but You should be able to buy an unlock code for around $12. Just pay for the code, unlock and you're free.

SiVal4• 12 years ago

I don't know what would be required to "crack" my iPhone (hardward? software only? can it be trusted? etc.), but I think this is the only time I'll need it internationally before AT&T will unlock it for me (and if they damage it, they replace it).

More important is for me to figure out how to buy mobile hardware / service from now on. Will it be easier if I switch to Android? If I pay full price for the hardware up front? If I use something like Google Voice or something newer and better? Or what?

I don't know, but one way or another I need to figure it out.

primitivesuave• 12 years ago

T Mobile will pay early termination fees if you switch. I haven't taken advantage of this yet, but I will, because I hate the slimy practices of AT&T.

specialist• 12 years ago

If you switch AND get a new device.

matwood2• 12 years ago

If you were already on tmo you wouldn't need a sim unless you planned to do a lot of voice. Plans include international text and data now.

jedberg• 12 years ago

If you jailbreak your phone you can put in any sim you want. I did that when I went to Australia.

halfasleep• 12 years ago

There's a reasonable amount of free WiFi in London, but it's not everywhere. In some places, you might need to ask for a password etc.

If you just need data, you can get a mifi for about £50 for the device and 1G of data. Before you get one, check if they will support VoIP - then you can use Skype etc.

cgs• 12 years ago

Terrible. I recently switched to T-Mobile and was pleasantly surprised to find out I'd have free data and text while on vacation in Holland. Wifi is pretty ubiquitous though so hopefully you'll be able to get by.

hudibras• 12 years ago

I'm very impressed by the FCC report on the T-Mobile deal (linked in the article). There's a lot more technical rigor, analysis, and just plain skepticism than I would have guessed. The FCC calls out AT&T for making faulty assumptions and mathematical errors in their calculations. They even dedicate an entire appendix to shredding AT&T's economic model for the merger.

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1955...

codereflection• 12 years ago

As soon as their coverage increases, I'll happily drop AT&T. Kind of crazy but here in Seattle none of the carriers besides AT&T have great coverage. You'd think in a pretty decently sized city the signal problem wouldn't be so prevalent.

esw• 12 years ago

I love T-Mobile and would switch back in a heartbeat if they had decent coverage in my travel area.

thisiszen• 12 years ago

Personal anecdote that shows how customer service laser-focused T-Mobile is:

Last week the T-Mobile CMO announced a nationwide campaign in which existing and new customers could turn in any Blackberry and get $200 towards a new phone (it was a response in regards to the CEO of Blackberry blasting them the day before).

I had just switched over to T-Mobile a couple of days before (so that I can upgrade phones whenever I want with their Jump program) and gotten $0 for my Blackberry. Usually I don't bother but this time I wanted to carry out an experiment on T-Mobile's customer service and see if I could get them to retroactively honor the Blackberry deal.

Long story short, I twitted their CMO (I'm nobody on Twitter) and he got back to me within 30 minutes. The next day I got a call from T-Mobile's corporate that my account had $200 in credit!

Now, I'm their number one fan.

matwood2• 12 years ago

I agree. I paid an ETF months ago before tmo announced the deal where they would pay, so I called them and asked if they would honor it. Turns out they wouldn't go back that far, but gave me a $50 credit for calling.

djur2• 12 years ago

Their customer service is great on the human side. Their website kind of blows, although they're not alone in that. I spent maybe a half hour trying to figure out how to get a different-sized sim card on their website, before giving up and calling. The phone call took maybe two minutes and the new card was in the mail.

Someone I knew was in a similar situation but, unlike me, was in a hurry. They _overnighted_ him the sim card for free.

tutufan2• 12 years ago

I was a loyal T-Mobile customer for years, but now I'm their number one enemy.

In short, I moved to a new state and my house appears to lie between three misconfigured towers. Multiple phones, multiple models repeatedly dropping calls and texts. Diagnostic app showed phones constantly hunting between towers. T-Mobile customer service abysmal--their motto seems to be FOAD.

Finally paid the $800 termination fee to be rid of them. Both StraightTalk (ATT network) and Verizon work perfectly at this location.

The moral of the story is not that T-Mobile sucks (though they do). Rather, never, ever enter a multi-month agreement with a cell carrier. They are simply not to be trusted.

fixedd• 12 years ago

I had the opposite occur for me. I reported a similar problem and they said they'd dispatch an engineer to check on it. Three days later everything worked perfectly.

thatthatis• 12 years ago

Am I the only one who read this as "glory be to our overlords for they give us 1 in every 100 days off"

The exact same government agencies that are being praised for their pro competition prescience allowed the market to become an oligopoly between 2000 and 2010.

http://technologizer.com/2011/03/20/att-buys-t-mobile/

superuser• 12 years ago

I was thinking the exact same thing. Too bad they don't feel the same way about the health insurance industry...instead they exempt health insurance companies from antitrust violations!

djur2• 12 years ago

Not the exact same agencies. Led by new appointees, with new directives. Not so different as you or I might like, but still: political changes do affect the regulatory system.

moultano• 12 years ago

The free data is such a life saver when I go to India. It's so liberating to be able to tell my Mom I've landed ok, to coordinate transportation, and find my way around with maps from the moment I land.

moleness• 12 years ago

Paul Gramcracker and his marching boobs.

slowmotiony• 12 years ago

In the US maybe, but T-Mobile in Poland is still the most expensive option with crappy phones.

chrisBob2• 12 years ago

T-Mobile is a news story because the MVNO's don't advertise. T-Mobile can't touch Republic Wireless or Ting prices in most cases.

aestra• 12 years ago

If you use your phone a real lot, Ting is expensive.

chrisBob2• 12 years ago

If you use your phone a real lot, Republic wireless is still just $20/month.

TheHippo• 12 years ago

As German these kind of articles confuse me. Here T-Mobile are the bad guys with expansive plans and crappy contracts.

itsmeduncan2• 12 years ago

I was an early adopter when T-Mobile rolled out their $50 unlimited everything plan in NYC. The pros outweigh the cons, but they do sometimes give me pause. I don't have service in 90% of my apartment in the middle of Manhattan. It is a newish(2001) building, but my fiancee has full service from Verizon. Outside of NYC the service is fairly spotty compared to bigger networks. T-Mobile with an unlocked 5S is priceless for travel. I just got back from a trip to Japan, and the Philippines. You don't need a SIM card. The phone joins the network it supports, and T-Mobile texts you your limits. 200mb of 3G data, unlimited text messaging, and cheap phone calls were included in my standard unlimited plan with no configuration. I pay $77.76 a month for unlimited everything, and 2GB of tethering data. I suggest it in a bigger city or if you travel internationally and need to stay connected. I give pause to people in the suburbs. I am sure it will get better though.

nfoz2• 12 years ago

How high is your apartment? Service seems to scale with height, and I'm curious how different that is between carriers.

itsmeduncan2• 12 years ago

I am on the 10th floor.

vaadu• 12 years ago

Let's hope the Comcast/TWC merger also gets nixed. Competition is a good thing.

contingencies• 12 years ago

This is a billing change. Having integrated in-app payments to both T-Mobile and AT&T, I can tell you that both of them outsource their billing systems on the Israeli company Amdocs, widely accused of being Mossad-affiliated and aiding and abetting intelligence gathering globally. Somehow I don't see this change impacting their insidious reach.

T-Mobile Turns An Industry On Its Ear

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