T-Mobile U.S. (NASDAQ:TMUS) is doing away its tiered data plans altogether next month, instead focusing on a new unlimited high-speed data plan called T-Mobile One. T-Mobile One begins September 6. While existing users can continue with their current plans, T-Mobile’s will eventually only offer the One plan to new customers. T-Mobile is currently the third largest wireless carrier in the United States.
Other large carriers, like AT&T and Verizon, have largely moved away from offering unlimited data because it increases network congestion while hindering service quality. Data caps and metered phone plans have largely been viewed as more lucrative for carriers than unlimited data plans. A lot of people buy way too much data in order to avoid overage fees.
T-Mobile is looking to limit online video streaming and tethering, two data hogs responsible for a large portion of network data traffic. The carrier will be limiting unlimited video streaming to a 480p resolution on the new plan and hotspot usage will be limited to 2G speeds. This will give subscribers few avenues to run up data usage. Typical smartphone functions like web browsing, messaging, app downloads and streaming music do not normally consume much data.
The new plan will be priced at $70 per month for a single line. A second line will cost $50 per month and extra lines will be priced at $20 each. If customers of the new T-Mobile One plan want unlimited HD videos, they will have to pay an additional $25. They will also have to pay an additional $15 for 5 GB of high-speed hotspot usage.
T-Mobile’s more frugal users who do not consume much data may also see their prices rise. T-Mobile’s most popular family data plan, offering 6 GB of data for four lines, data rollover and Binge On, costs about $120 per month. In comparison, the new plan will cost about 33 percent more at roughly $160 for four unlimited lines.
T-Mobile said that the unlimited nature of the data plan makes the price worthwhile. T-Mobile’s previous unlimited plan was priced at $95 per month for the first line. That plan offered unlimited HD video and had 14 GB of high-speed mobile hotspot usage included. T-Mobile’s heaviest data users may still be subject to some restrictions. If you’re in the top 3 percent of data hogs, your data traffic may be slowed.