T-Mobile Doubles-Down with Aggressive Assault on Competition: Eliminates Overage Fees

dgstorm

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If you thought T-Mobile's CEO, John Legere was done shaking up the U.S. mobile carrier industry with earth-shattering, ground-breaking and paradigm-shifting announcements, then you would be mistaken. He just announced on his blog that T-Mobile will be eliminating overage fees. Specifically, beginning in May for your bills in June, there will be no overage fees for any T-Mobile subscribers. Here's a quote from the official press release, but be sure to hit up the source link below for Legere's personal announcement on his blog,

BELLEVUE, Wash. – April 14, 2014 – T-Mobile US, Inc. (NYSE: TMUS) today shifted the national conversation on wireless to a new level, unveiling its latest Un-carrier move – a campaign to eliminate overage penalties, one of the most reviled wireless industry practices. While abolishing overages for all customers on T-Mobile consumer plans, its CEO has also laid down a challenge to the nation’s largest carriers, AT&T, Verizon and Sprint, to do the same.

More than 20 million Americans were hit with punitive overage charges in 2013. And these penalties from the three largest U.S. carriers take more than an incredible $1 billion out of consumers’ pockets every year.

“Today I’m laying down a challenge to AT&T, Verizon and Sprint to join T-Mobile in ending these outrageous overage penalties for all consumers – because it’s the right thing to do,” said John Legere, president and CEO of T-Mobile. “Overage fees are flat out wrong. Agree with me? Join me in putting this challenge to all the major national carriers by signing my petition on Change.org. Right here. Take one minute to be a part of this consumer movement.”

Last year, T-Mobile banished annual service contracts and began phasing out overage charges with the launch of Simple Choice. T-Mobile’s stance against annual service contracts is now well known by consumers, and today it's taking on the even more unpopular and unjustified practice of slamming consumers with surprise bills in the form of overages charges.

“Charging overage fees is a greedy, predatory practice that needs to go,” continued Legere. “Starting in May for bills arriving in June – regardless of whether you’re on Simple Choice, Simple Starter or an older plan, we’re abolishing overages for good. Period.”

Traditional carriers’ entry-level plans lure customers in with a low monthly fee for a fixed amount of domestic minutes, texts or data. Once consumers go over those limits – even by a little – they’re hit with much higher rates, often dramatically higher. These plans are purpose-built to drive customers over that invisible line into massive overage charges. The result has been a culture of fear, worry and surprise every time the wireless bill arrives. For example, an individual on AT&Ts entry-level plan, advertised at $45 per month, will pay $125 if he uses just the average amount of data for a U.S. smartphone user (1.5 GB per person).

“The worst thing about these overage fees is that they’re often inflicted on those who can least afford them,” added Legere. “As an advocate for consumers, we’re putting a stop to that. I personally won’t be satisfied until we obliterate this shameful practice from the entire wireless industry.”

To give a voice to U.S. wireless consumers, Legere has started an online petition at Change.org/AbolishOverages calling on AT&T, Verizon and Sprint to end overages. You are invited to sign the petition and add your voice to the growing movement to rid the wireless industry of domestic overages once and for all.

For more information, visit the T-Mobile Newsroom, download T-Mobile b-roll or read John Legere’s blog about today’s announcement.

Overage estimates from third party bill screening report surveying over 20,000 wireless customers multiplied by major U.S. carriers’ reported postpaid subscribers. No overages for U.S. domestic calls, texts, and data usage only. Visit a T-Mobile store for details. As always, we encourage customers to review their plans and features, and talk with our retail associates to make sure their current wireless service gives them everything they need.

About T-Mobile US, Inc.
As America's Un-carrier, T-Mobile US, Inc. (NYSE: "TMUS") is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The company's advanced nationwide 4G and 4G LTE network delivers outstanding wireless experiences for customers who are unwilling to compromise on quality and value. Based in Bellevue, Wash., T-Mobile US provides services through its subsidiaries and operates its flagship brands, T-Mobile and MetroPCS. It currently serves approximately 46.7 million wireless subscribers and provides products and services through approximately 70,000 points of distribution, including approximately 8,000 T-Mobile and MetroPCS branded locations and 62,000 third-party locations, as well as distribution through our websites. For more information, please visit Cell Phones | 4G Phones | iPhone and Android Phones | T-Mobile.

Here's a link to his blog-post in which he details several of the other moves T-Mobile has made over the past few days on top of this bold initiative: BLOG_day-3-of-3*-*T-Mobile US, Inc.
 

kodiak799

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So when people use up their plan allowance, TMo is just going to cut them off for the remainder of the month? Or automatically upgrade you to a more expensive plan (which you can do with VZW, but you have to do it manually)?

He's making a big stink about this, like others I've seen on various forums and around the web....Thing is, the "massive gouging" amounts to about half a month's service charge for @ 6-7% of subscribers (assuming that data is accurate, seems high to me).

$1B is still a fraction of a single percent of revenues. It's not a cash-cow, and it's not driving profitability - they don't want to collect overages, they want people to pay for the plans they use.
 

nickb34

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I'd rather see "rollover data" as opposed to getting rid of the overages. I pay for 6GB's of data, I should get to use all of that data no matter what month it is in.
 

johnomaz

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What overage fees exist at TMobile anyways? We have unlimited voice and text and when we run out of the data we pay for, we drop to 2G speeds until the next billing cycle.

I see that he mentions older TMobile plans. I'm guessing those don't have the same failsafes for overages. But why not just upgrade them to the new plans? If they are actually having their service cut off, thats kind of annoying. Probably more annoying for some than getting charged for additional usage.
 

Caesars

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Some people are holding out to older plans, eventually they'll get forced onto something newer anyway.


Note3/iPhone5s
 

kodiak799

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I'd rather see "rollover data" as opposed to getting rid of the overages. I pay for 6GB's of data, I should get to use all of that data no matter what month it is in.

But then you'd have to pay more, because plans are sold based on average expected usage...If everyone would eventually use an average of 6GB because of roll-over (as opposed to, say, 3GB without), then they'd have to increase the price significantly.
 
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