Thursday, February 19, 2009

T-Mobile offers special $50 unlimited wireless plan

T-Mobile USA, the fourth largest cell phone operator in the U.S., is launching new service promotions in an effort to keep long-term customers and attract new ones.

The company plans to offer a special $50 per month unlimited voice service plan to its long-time customers in San Francisco. And it will also offer new customers who switch from a competitor a $135 rebate, Reuters news service reported Thursday.

T-Mobile's new plan will only be available to customers who have used its service for 22 months or more, according to a T-Mobile representative who talked to Reuters.

The new promotions come as T-Mobile faces stiff competition from the three other major cell phone operators in the U.S. During the fourth quarter, AT&T and Verizon each added customers. AT&T added 2.1 million customers, including 1.9 million iPhone users. And Verizon added about 1.4 million new subscribers in the fourth quarter.

T-Mobile USA added customers too during the fourth quarter, but at a much slower rate. The company only added 621,000 new customers. This was down from the previous quarter when the company added 670,000 new subscribers. And it was down considerably from a year earlier when it added 951,000 subscribers in the fourth quarter of 2007.

The bulk of T-Mobile's new subscribers came from pre-paid accounts, as the total number of customers signing up for contracts slowed compared to previous quarters.

Meanwhile, Sprint Nextel, which reported fourth quarter earnings on Thursday, continued to lose customers, shedding a total of 1.3 million customers during the quarter.

The results from the four major carriers suggests that higher value customers, who enter contracts and generally generate more revenue per month, are gravitating toward the two biggest carriers rather than T-Mobile or Sprint.

T-Mobile and Sprint seem to be duking it out for value customers, which is where these new promotions from T-Mobile are targeted. In fact, it looks as if T-Mobile's new promotions may be in response to a new plan that Sprint's prepaid brand Boost Mobile launched in January. Boost is offering an unlimited mobile plan for $50 a month. During Sprint's quarterly conference call on Thursday, executives for Sprint said the service is off to a good start.

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