T-Mobile, MetroPCS Offer New Unlimited Data Plans: Pros and Cons

Not long ago it looked like AT&T was going to swallow T-Mobile, the nation’s number four wireless carrier. Consumer advocates, much of the tech press (including me), and government regulators opposed the measure, saying it would reduce what little competition exists in the market.

The merger collapsed and guess what? T-Mobile yesterday announced a new and better deal for consumers. What’s more, several second-tier carriers are also sweetening their deals.

Competition: It really works.

[T-Mobile, MetroPCS Roll Out Unlimited Data Plans]

The market for cell phones and services in the U.S. is getting saturated; how many people do you know that don’t have a cell phone? AT&T and Verizon have dropped unlimited data plans for new customers, and have raised prices and fees on some of their plans. T-Mobile, meanwhile, has lost huge numbers of customers, and the best way it can compete with the big guys is to cut prices.

T-Mobile’s new plan offers a feature that has been disappearing rapidly: unlimited data. And unlike T-Mobile's existing "unlimited" plan, this new one really is unlimited. T-Mobile had been throttling connection speeds for customers who used what the carrier considered excessive amounts of data. Under the new plan, you can download all you want and your connection speed will never be slowed down.

There are, of course, some downsides. T-Mobile still doesn’t offer an iPhone, and although it says its network is "4G" it's actually a slower version known as HSPA+. Next year, the carrier promises, it will deliver 4G LTE, the more common and significantly faster network technology. The new plan does not include the option to use your phone as a mobile hotspot, so you won’t be able to share your phone data connection with your tablet or laptop.

Because T-Mobile's coverage area is not as wide as AT&T's or Verizon's, it may not matter to you how attractive the offer is. After all, if you can't a get a decent signal where you spend most of your time, what's the point? As always, I suggest that you invite a friend or co-worker who has a T-Mobile phone to use it in your home or office and see how well it works.

T-Mobile's "Unlimited Nationwide 4G Data plan" will be available on September 5. You will be able to get a subsidized phone with unlimited talk, text and data for $89.99 per month, or $69.99 if you don't include the smartphone subsidies. Without a subsidy, the phone you buy will cost more, but your monthly service is lower. Since T-Mobile has a number of phones, be sure to calculate the cost of the deal over the life of the contract and then subtract the price of the phone.

MetroPCS says it will also offer an unlimited data plan but only for a limited time. The carrier is offering its plan with unlimited talk, text and data for $55 per month on a single line. If you sign up now, you can keep that rate. The downside: Although I've heard that MetroPCS has made real improvements to its network, its coverage area is still limited. Finally, both Sprint and Leap Wireless are selling the iPhone without a contract, though at a high price, and offer a service plan that is cheaper than you'll find at AT&T or Verizon.

Now that competition is finally heating up in the wireless market, smart consumers can save money, but as you can see, you've got to do some research and consider the coverage quality where you live and work.

(Image courtesy of sharperimage.com/)

San Francisco journalist Bill Snyder writes frequently about business and technology. He welcomes your comments and suggestions. Reach him at bill@billsnyder.biz and follow him on Twitter at @BSnyderSF.

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