T-Mobile customers would not have to pay overage charges for US domestic calls, texts, and data usage plans commencing from June as the carrier announced on Monday that it would end the charging of the penalties from customers who exceed the limit for their data plans. In his statement, T-Mobile’s CEO John Legere also challenged rival phone service carrier firms to follow suit, adding that ending overage charges is “the right thing to do.” The chief executive also went as far as to launch an online petition #AbolishOverages on change.org against the penalties.
According to Legere, cell phone carriers AT&T, Sprint and Verizon collected over $1 billion in over limit penalties from more than 20 million Americans just last year. He said that these “outrageous” penalties should not be charged from customers anymore, further terming them “wrong,” and asked rivals AT&T, Verizon and Sprint to also end their overage charges for customers. He called this decision the “un-carrier move.”
T-Mobile’s decision to end the overage charges means that their customers would now not be billed for any additional amount of data that they use beyond their signed up plan. Instead, the only penalty they will have is slowed down speed at 2G until they purchase another package.
However, T-Mobile’s customer base mostly comprises of those having unlimited plans for voice and texting, therefore, this new decision of the carrier will benefit a smaller group of their customers who have limited data packages and who go past their data plan limits regularly.
This is the third announcement by the firm in its three-pronged strategy to challenge rival giants and take on their customers. T-Mobile kick-started its latest marketing strategy on Apr. 9 when it announced the Simple Starter plan. This is a new single line service package the phone carrier is offering, which would include unlimited talking and texting with 500MB of 4G LTE for $40 a month.
Then on Apr. 10, T-Mobile said that their customers can buy 4G LTE-enabled tablets at the prices of their WiFi-only counterparts. This means that many of the firm’s customers can now add a tablet to their service plans for no additional costs. Furthermore, T-Mobile is also offering 1GB of complimentary monthly data till December 2014 with this offer.
In his blog post today, along with the announcement of ending the overage charges, Legere also said the customer reaction to the previous two deals has been “fantastic” and “unbelievable.” He further said millions of Americans with wireless services have yet to see the best, which will be coming “in the weeks and months ahead.”
The executive said that customers will know what he means when they see the company’s progress update for the first quarter of 2014 on May 1. Legere also said that he would enjoy and “smile” watching the rival firms feel the weight of the demand as “consumer revolution” comes about.
Legere may sound boastful but he may not be far off the mark. Since his efforts began to turn the firm around after four years of steadily losing customers, T-Mobile finally managed to succeed in 2013. Legere made sure to publicize his firm’s data plans and added a series of creative marketing techniques (remember the break up letter ad offering to pay $350 in termination fees for switching carriers?) that helped the firm to improve customer base.
The announcement to end overage charges for all T-Mobile customers is another step that will convince wireless consumers to switch. How does AT&T, Sprint and Verizon respond is something to look out for as it has been seen that all previous initiatives of T-Mobile has been copied by rivals. If the competitors do decide to end the overage charges, wireless consumers’ revolution may well be on its way!
By Faryal Najeeb