T-Mobile ends use-it-or-lose-it data
The 4th-place carrier's latest disruption: "Data Stash," a 12-month rollover of unused data.
I'll have more to say about this later on, but the news that T-Mobile touted today as "huge" and "so big we had to keep it a surprise" is at least modestly significant - and, once again, a disruption aimed at challenging Verizon and AT&T: The "Un-carrier" says it will offer new and existing subscribers a "Data Stash," allowing them to roll-over their unused gigabytes at the end of each month.
Sometime in January, each customer who qualifies will get a "gift" of 10 gigs to start with. Once those are used up, customers will get to stash unused data each month, and keep it for up to a year.
T-Mobile already doesn't charge for data overruns. If you're a customer and run through, say, your 1-gigabyte or 3-gigabyte allotment, you simply get throttled to 2G speeds. But T-Mobile CEO John Legere says his competitors collect about $1.5 billion a year for data overages - pure margin, he says. And more to the point, he says, the threat of those charges prompts many people to pay for far more data than they actually need - he estimates about 3 extra gigs a month per subscriber.
Where did the Data Stash idea come from? "This isn't rocket science," Legere says. In truth, it was an obvious option in an industry where AT&T and its predecessor, Cingular Wireless, have offered "rollover minutes" for wireless phone calls for more than a decade. In the last year, Legere said, about 40,000 people have taken to Twitter to urge an end to use-it-or-lose-it data pricing.
You can read T-Mobile's announcement here. Momentous? Maybe not. But Legere continues to show that he means what he says about changing his industry by eliminating customers' "pain points."
"We're on a mission here to rewrite the rules of wireless, and won't stop," he said during a media call - after taking his trademark shots at "a stupid, broken, arrogant industry."
Sure, he gets a little carried away. If he ever wants to stop CEO'ing, he could have a future as a firebrand consumer advocate. And his own company's plans aren't immune to asterisks and footnotes. Data Stash, for instance, will only be available to customers who pay for something more than minimum data - at least 3 gigs per month on a smartphone or 1 gig per month on a tablet.
But Legere is right that his competitors' pricing models are full of gotchas - and that all wireless consumers benefit from his willingness to call them out for profiting from their customers' mistakes.