T-Mobile Takes Mobile Data Plans Into Prepaid Arena

T-Mobile USA will introduce an array of pay-in-advance plans for phones and PCs on Monday, expanding the growing range of prepaid options on offer to U.S. cellular users.

The prepaid plans include T-Mobile's first that are strictly for data services. Customers will be able to use these services with a new USB modem for laptops and netbooks, the T-Mobile Jet Prepaid USB Laptop Stick. The device will go on sale at T-Mobile's website on Monday and in T-Mobile stores on Oct. 20, priced at US$99.

Big U.S. carriers have been offering more no-contract, pay-in-advance mobile plans after years of relying mostly on postpaid monthly plans with contracts. With pay-in-advance plans, customers buy service for a month or some other term, with no obligation to buy again during the next term. The trend has been credited partly to the ailing economy, which makes some people wary about committing to a monthly plan for a year or two.

T-Mobile will offer unlimited talk and text-messaging with 2G bytes of data downloads for $70 per month. The same plan with just 100M bytes of data will cost $50. Another phone plan, with 30MB of data and 1,500 minutes of talk time, will cost $30 per month. On that plan, users can also substitute one text for one minute of talk time.

One distinctive feature of T-Mobile's new prepaid lineup is the Web DayPass, which provides data service on a phone for $1.49 per day. Customers who are new to T-Mobile, as well as existing prepaid customers who may have hit their monthly data limit, can buy the daily service.

For the prepaid mobile broadband plans, which can be used with the new USB stick or any other T-Mobile device, consumers will be able to choose among three plans: a weeklong pass with a 100MB cap will cost $10, a monthlong plan with 300MB of data will cost $30, and a month's pass with 1GB of data will cost $50.

These are T-Mobile's first prepaid plans for pure data without phone service. The carrier already offers a variety of prepaid and postpaid options, with and without contracts, for service with phones. The new prepaid phone plans coming Monday are designed to offer more options and better value to prepaid customers.

T-Mobile is not alone in catering to the prepaid market. In September, Verizon kicked off pay-in-advance data plans for most of its smartphones and feature phones. Sprint Nextel offers prepaid voice and data services through its Virgin Mobile and Boost Mobile subsidiaries. AT&T lets subscribers buy the same monthly phone plans whether or not they go under contract. Smaller prepaid operators also have been raising their profiles, such as MetroPCS, which last month initiated high-speed LTE (Long-Term Evolution) service in Las Vegas on a no-contract, $55-per-month plan.

Young people, a key customer base for T-Mobile, have long been consumers of prepaid mobile service, and now data has become part of that equation, said Tolaga Research analyst Phil Marshall.

"The younger demographic are starting to use mobile data services more regularly," Marshall said. Many young consumers that got into mobile through prepaid plans are likely to stick with them as they grow older, he added.

However, Marshall worries that consumers will have a hard time picking through menus of plans like T-Mobile's, with different prices and data caps. Most people don't know how much data a given mobile activity consumes.

"You're asking people to make decisions in and around things they don't understand," Marshall said. He believes carriers should instead differentiate their plans based on downstream speed, as determined by levels of priority during busy times. Consumers understand this already if they buy wired home broadband service, he said. The network management tools exist to do so, according to Marshall.

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