T-Mobile, in many respects, has its back to the wall. It did not carry the iPhone until this week. Its 4G network still lags behind those of Verizon and AT&T. And one year ago, AT&T dropped its $39 billion acquisition plans, in light of opposition from the Justice department. And its relatively small hold on the US phone market has meant that the T-Mobile still lags among the big four phone carriers.
And so, this week, CEO John Legere called an audible, launching a new smartphone scheme called “Uncarrier,” which seeks to openly simplify the costs and complexity behind smartphone ownership. The new plan is coupled with clear explanations of how, exactly, smartphone subsidies work, and how traditional cell phone carriers make their money. T-Mobile seeks to demystify the process, allowing subscribers to come and go as they please, and bring whatever compatible smartphone they’d like – without penalties or fees. As importantly, T-Mobile will now offer the iPhone, and allow users to either buy the phone upfront, or pay it off in $20 monthly increments.
It’s a clever campaign, and it self-righteously stands in contrast to the absurd price and complexity of Verizon and AT&T’s plans. But it does, at the same time, feels like a last-minute call, a card player putting it all on the table. And in its emphasis on simplicity and unlimited data, T-Mobile’s strategy is similar to that of Sprint, the third-place carrier, whose “Truly Unlimited” campaign pokes at the big guys’ data caps and usage restrictions. But Sprint suffers from the same fundamental pitfalls as T-Mobile – delayed iPhone acquisition, relatively few subscribers and an as-yet incomplete 4G setup. But it is encouraging to see this degree of innovation and simplicity in the heretofore crazy, mixed-up world of data plans.
It’s worth noting a similar strain of competition in the world of landed internet connections. Yesterday, Google announced that it would roll out its acclaimed fiber optic network in Austin. AT&T, feeling the Texas heat, announced today that it will construct a comprable fiber network in the same region.