Every price decrease has to start somewhere. For mobile broadband, it might have started with T-Mobile. The last major U.S. carrier to offer mobile broadband services, T-Mobile stuck with the industry-wide cap of 5GB, but undercut its competitors by $10 per month, offering theirs at $50. They’re officially the cheapest of the Big Four now, and when one company lowers its price, the rest usually follow. So why haven’t we seen AT&T, Verizon, and Sprint knocking down their $60 monthly plans? Because T-Mobile, in terms of 3G, isn’t yet on the same level.
T-Mobile only started deploying a 3G network last year, which is long after the other three. That puts them at an immediate disadvantage. Plus, they don’t cover the entire nation, so frequent travelers, who are the typical user of mobile broadband services, might not find T-Mobile’s offering as useful.
Another disadvantage for T-Mobile is that the other carriers hook customers with a two-year contract. So even if T-Mobile’s service, at $50, was attractive to some customers, they might not be able to do anything until their contract expires. This leaves the other three carriers in the driver’s seat.
Soon, though, T-Mobile will upgrade its 3G networks to 7Mbps, a project AT&T won’t complete until 2011. They then plan up upgrade that to 21Mbps sometime next year. That’s going to make their service even more attractive to consumers. If still offered at $50, it could make a huge dent. People will still have to wait out their contracts, but with prorated early termination fees, perhaps they’ll cancel a few months early.
A hat tip to FierceWireless for the idea.
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