NEW YORK—T-Mobile wants to change how businesses buy phones and wireless services two years after it changed how consumers do so in abolishing long-term contracts.
T-Mobile says its new business plans are about simplicity, with rates determined based on how many lines and how much data the company needs. Traditionally, these rates are negotiated on a case-by-case basis.
T-Mobile says that puts smaller and medium-sized businesses at a disadvantage. The company believes its new plans will be particularly attractive to them.
“Anybody can figure out the cost,” John Legere, T-Mobile’s CEO, told The Associated Press. “At the counter, on the phone, in two minutes, we can tell you exactly how much it’s going to cost, how to get you over, what we can do for your family.”
T-Mobile is also offering new deals for families of employees, along with a pledge to pay the balance of phone-installment plans for those switching from other rivals.
No More Contracts
Two years ago this month, T-Mobile shattered a long-standing industry practice of tying consumers to two-year service contracts in exchange for phone discounts.
Customers now pay full price for phones in installments, and the company no longer inflates rates for voice, text, and data services to make up for those phone discounts. Verizon, AT&T, and Sprint soon followed with their own no-contract plans.
Since then, T-Mobile also has introduced free data roaming abroad and programs for upgrading phones more frequently.
The programs have helped T-Mobile gain more than 4 million phone customers in the lucrative “postpaid” plans last year. T-Mobile US Inc., the nation’s No. 4 wireless carrier, has its headquarters in Bellevue, Washington.
By T-Mobile’s own admission, the company doesn’t have a lot of business customers today in part because its network has historically lagged those of Verizon and AT&T. T-Mobile’s network is improving, and the company believes it can draw many of those business customers with simplified plans.
The first 19 lines are $16 each, and there’s a 10-line minimum. Those needing 20 to 1,000 pay $15 each for all lines, including the first 19. Those needing more pay $10 per line on their entire plan.
Each line gets unlimited voice and text and 1 gigabyte of data. Companies can buy more data per line or as a pool that can be shared, or any combination of the two. T-Mobile won’t charge overage fees, so companies can pay only for what they need and use, though there are some minimums.
Many carriers now offer discounts for families of employees, but T-Mobile says that’s typically done as a percentage off the most expensive rate for the first phone. Legere says the company will offer steeper discounts not by offering percentages but by applying cheaper, multiple-line rates more quickly. T-Mobile is treating the employee’s work phone as the first phone in its family plans.
Instead of offering 10 percent or 15 percent off the $50 rate on the first phone, T-Mobile will charge the second-line rate of $30, a discount of 40 percent. The second line will be charged $10 instead of $30, a discount of 67 percent.
There’s no rate reduction after that, so larger families might still benefit from a percentage discount.
T-Mobile already pays contract-termination fees for those switching from other carriers. But with the growth of no-contract plans, many consumers are instead locked into phone-installment plans. If they leave, they must pay the balance right away.
T-Mobile says it will now pay that amount, up to $650, though the customer must turn in the device and get a new one. This offer isn’t limited to business plans.
For all customers, T-Mobile will also lock in current rates, including promotions, if they stay with the company. The exception is with unlimited data plans; the guarantee is for two years only. Rival carriers often lock in rates already, but T-Mobile says there have been exceptions.
Businesses that buy extra data will get a free domain name and website from GoDaddy, a domain-registration and Web-hosting company. T-Mobile is also offering email and other tools through Microsoft’s Office 365 Business Essentials.