
T-Mobile Turns An Industry On Its Ear - davmre
http://www.nytimes.com/2014/02/27/technology/personaltech/t-mobile-turns-an-industry-on-its-ear-in-a-fight-for-its-life.html
======
jtchang
The author of this article feels that he would be happy to see T-Mobile die
trying.

I personally have nothing but respect for T-Mobile. It is hard to change
fundamental things such as pricing when you are such a large corporation.
Doubly hard if your competitors have successfully proven contract pricing
works.

I hope T-Mobile continues to innovate. The telecom industry is overall a
dinosaur. What keeps them alive is their infrastructure and rights of way. If
we ever get a wireless alternative that is as fast as fiber (and easily
deployable) we'd see the end of traditional telecoms as we know it.

~~~
toomuchtodo
> If we ever get a wireless alternative that is as fast as fiber (and easily
> deployable) we'd see the end of traditional telecoms as we know it.

Like every Google Fiber set top box being a wireless access point accessible
to other Google Fiber customers, as well as free to Android users? And Google
using their fiber right of ways to deploy 802.11ac or picocells?

Only in my dreams sir.

~~~
dm2
It would be neat if they offered a discount for them being wireless access
points accessible to other Google Fiber customers.

I'm not sure about the Android part, just because it would be almost
impossible to prevent someone from running all connections in a house through
an Android device and get free internet.

~~~
hrkristian
I don't know, I've used my phone as an internet hub, and the sheer heat from
pulling that amount of data through the antennas while charging seems like a
great way to drastically shorten the lifespan of a phone.

Granted, I did this with an old Galaxy S (it ran upwards of 80°c), which has
its antenna and power supply right beside each other.

~~~
dm2
Yeah, but if Google started offering free high-speed WiFi then someone would
make a "DIY Android Hub" which had a better antenna, better cooling, and
possibly even ethernet ports.

------
kabdib
Certainly walking into my current provider's storefront and mentioning
T-Mobile finally broke loose a long-standing warranty issue I had with AT&T.

"Fix this, or I'm gonna walk."

"Suuurrre you are."

"No, really."

[go to other end of the mall to the T-Mobile store, talk to sales guy -- who
frankly almost got me to switch right then. Walk back to AT&T anyway.]

"Hey, do you want me to still be your customer?" [Wave quote]. "You decide.
Ten, nine, eight, seven..."

"Okay, okay!"

I _hate_ dealing with phone sales worse than I hate buying a car.

~~~
bjelkeman-again
So why didn't you switch?

~~~
kabdib
I have an absolutely unlimited data plan (long story...) that I'd hate to
lose, and T-Mobile would have been a bit more expensive.

~~~
67726e
Several coworkers had truly unlimited data grandfathered through older
contracts, but ultimately decided that voting with their dollars for a decent
company/policy was more important for what might have been very little (if
any) additional cost per month.

~~~
coldpie
This is what has me switching. Despite an expected increase of about $10/mo,
I'm moving to T-Mobile as soon as the weather turns nice (unnecessary
transport in Minnesota winters is... undesirable) because I don't want to give
my money to a company actively fighting against net neutrality, Verizon. Plus
the bonus of influencing the mobile market in a positive manner, as this
article describes.

------
hudibras
I'm very impressed by the FCC report on the T-Mobile deal (linked in the
article). There's a lot more technical rigor, analysis, and just plain
skepticism than I would have guessed. The FCC calls out AT&T for making faulty
assumptions and mathematical errors in their calculations. They even dedicate
an entire appendix to shredding AT&T's economic model for the merger.

[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1955...](http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1955A2.pdf)

------
thisiszen
Personal anecdote that shows how customer service laser-focused T-Mobile is:

Last week the T-Mobile CMO announced a nationwide campaign in which existing
and new customers could turn in any Blackberry and get $200 towards a new
phone (it was a response in regards to the CEO of Blackberry blasting them the
day before).

I had just switched over to T-Mobile a couple of days before (so that I can
upgrade phones whenever I want with their Jump program) and gotten $0 for my
Blackberry. Usually I don't bother but this time I wanted to carry out an
experiment on T-Mobile's customer service and see if I could get them to
retroactively honor the Blackberry deal.

Long story short, I twitted their CMO (I'm nobody on Twitter) and he got back
to me within 30 minutes. The next day I got a call from T-Mobile's corporate
that my account had $200 in credit!

Now, I'm their number one fan.

~~~
tutufan
I was a loyal T-Mobile customer for years, but now I'm their number one enemy.

In short, I moved to a new state and my house appears to lie between three
misconfigured towers. Multiple phones, multiple models repeatedly dropping
calls and texts. Diagnostic app showed phones constantly hunting between
towers. T-Mobile customer service abysmal--their motto seems to be FOAD.

Finally paid the $800 termination fee to be rid of them. Both StraightTalk
(ATT network) and Verizon work perfectly at this location.

The moral of the story is not that T-Mobile sucks (though they do). Rather,
never, ever enter a multi-month agreement with a cell carrier. They are simply
not to be trusted.

~~~
fixedd
I had the opposite occur for me. I reported a similar problem and they said
they'd dispatch an engineer to check on it. Three days later everything worked
perfectly.

~~~
tutufan
Must be nice. For over eight months, we had no response of any kind, nor any
indication that they had any interest in looking into possible technical
issues on their network. In their final denial letter to us, they stated that
based on the coverage map on their website, we could "expect excellent voice
and data service" (at the location where we'd had constant drops for months).

------
SiVal
How ironic. I'm packing for a brief trip to London, and I'd like to use my
iPhone 5 while I'm there. T-Mobile offers terrific deals on sim cards in the
UK. For about 15GBP or so, I could easily get a sim card with more talk
minutes, texts, and data than I could possibly use during my short trip. It's
so simple, I could get it from a vending machine at Heathrow.

Perfect. The only bad news is that AT&T won't allow it. I talked to them. My
phone is locked until later this year. No, they won't unlock it yet, even
briefly. Despite the fact that I'll still be paying the full monthly contract
fee I agreed to, the fee that is paying in full for my subsidized phone, any
_additional_ service I might want to add _must also_ be purchased from AT&T.

"Sir, I'm afraid your only option is to choose one of our Global Plans,
beginning at $1.50 per minute...."

I obviously need to do more research so that the moment my phone is
unshackled, I'll know where to run with it.

Of course I'm dreaming of the day when all the lumpiness will smooth out and
in most countries you'll just use whatever devices you like to connect to the
ubiquitous Internet. Just an international data subscription that you use for
everything, everywhere. Talk, text, TV, Web...are all just your favorite apps
(plus subscriptions to _content_ from millions of competing producers.)

<sigh> While waiting for utopia, I guess I'll have to figure out the wifi
situation in downtown London.

~~~
primitivesuave
T Mobile will pay early termination fees if you switch. I haven't taken
advantage of this yet, but I will, because I hate the slimy practices of AT&T.

~~~
specialist
If you switch AND get a new device.

------
rayiner
I really love T-Mobile, but its also a validation of all the ideas that
traditional telecom regulation rejects. T-Mobile has focused its capital on
urban areas and wealthier areas. My LTE download speeds in downtown Phila or
DC are great. Service in the poor part of Wilmington where I live? I'm lucky
to get 1-2 megabit on HSPA. People are rightfully excited about T-Mobile, but
let's not forget that its success to date validates the method of ignoring
rural and poorer areas to maximize service in Tue areas that are both dense
enough to build out in a capital efficient way and wealthy enough to afford
high speed service to justify the investment.

~~~
AnthonyMouse
> I really love T-Mobile, but its also a validation of all the ideas that
> traditional telecom regulation rejects.

It's quite possible that traditional telecom regulation is ill conceived.
Rural build out requirements are effectively a tax on providing service in
urban areas used to subsidize providing service in rural areas. It's
government interference in the market -- and maybe that's necessary to get
what we want, but we should at least admit what we're doing so we can properly
evaluate it.

In particular, if we want to have a subsidy for rural build outs, that doesn't
automatically mean the money should come from telecommunication customers in
urban areas. The premise itself is that telecommunications service is
something good that we want to promote and make more affordable, so making it
less affordable for urban customers in order to subsidize rural customers is
robbing Peter to pay Paul. If we have to rob somebody then we should either
rob somebody we _don 't like_ (e.g. tax cigarettes or gas guzzlers) or the
money should come from everyone equitably via a tax on general
sales/income/etc.

"Traditional telecom regulation" implies that we can't have gigabit fiber in
New York City (population density ~27,500/sq mi) until it is cost effective to
also install it in Loving County, Texas (population density ~0.1/sq mi). That
seems significantly less desirable than, for example, setting aside a fixed
amount of subsidy each year and dividing it between each carrier based on the
number of citizens newly served who were not previously served at a given
class of service. That way the market works and the most efficient markets are
not delayed (i.e. NYC gets gigabit fiber right away) but as the low hanging
fruit is picked and the number of new residents offered service per year
decreases, the subsidy per each newly served resident increases until the
subsidy for installing service to the last unserved resident finally exceeds
the cost of installing the service.

~~~
rayiner
I was thinking about this just the other day. Fixed subsidy per resident, and
we see how far that gets you. The subsidy we have now is not a small thing.
Even ignoring the cross subsidies intrinsic in build out requirements, we
directly subsidize rural wired service to the tune of $4.5 billion per year
via taxing long distance voice service. That's as much as TMobile spends on
CapEx every year to build out an LTE network avaible to 200 million mostly
urban customers.

~~~
AnthonyMouse
What I'm suggesting is a fixed subsidy amount ($X billion each year) which is
split between all the carriers based on how many new customers that carrier
serves who weren't served by anyone in any previous year. So on the one hand
you have the carriers competing to increase their share of the subsidy pool
every year by adding service for more new customers than their competitors,
and on the other hand as the remaining unserved residents become those in ever
more poor and rural areas and the rate of expansion slows overall, that causes
the subsidy per new resident to increase and keep continued expansion
attractive until the last unserved resident is served.

------
Negitivefrags
_The firm’s real innovation began last March, though, when it announced its
Simple Choice plan_

This is how the rest of the world already works.

I buy an iPhone direct from Apple and then pay ~15USD per month on service
with no contract.

~~~
xerophtye
Glad to see someone else here who is baffled by the state of American telecom
industry as I am.

So here's what i understand about the industry prior to TMobile's
"innovations":

\- You buy phones from the Cellular service provider, which are bundled with
the service (hence apparently higher bills)

\- Since the phone is bundled with the service, i assume even if you don't use
the service you still pay a good amount every month.

\- You have a contract with the Cellular service which forces you to stick
with them till the term of the contract.

\- So its usually painful to switch carriers (breaking fee etc). (Do you get
to keep your old number if you switch?)

\- Since you are stuck with the cellular service they can pretty much charge
you whatever they want during that time. Sure they gotta give you an incentive
to renew the contract but as i see it the competition between carriers isn't
that much.

Now here's how things work in my country:

\- You buy mobile independently and then pay for the service

\- You pay the service typically below 3USD for most users. And it depends
ENTIRELY on your usage. No usage = zero payment.

\- No contracts with the carrier. You get to switch at the drop of a hat.

\- Thing is, cellular services mostly "prepaid" (post-paid is available but
few users go for that). So you just pay the service in advance what you think
will use and that is credited to your account. This doesn't expire for several
months so no worries about over-estimating.

\- So switching a service = getting a simcard of that service, adding balance
to it (which you can from any corner store).

\- Oh they even let you keep the number provided by the old carrier so
virtually no switching costs.

\- Hence the competition here is unimaginable! "Price war" would be an
understatement. They even keep giving incentives to inactive customers to plug
in their old sim cards.

\- Its so freaking affordable people buy multiple-sim cellphones so they can
use multiple services at the same time (hence utilizing best of each provider)

~~~
NoPiece
The simple version is: US cell phone contract = service bundled with a small
loan for a phone.

It isn't that bad. They can't charge you whatever they want, your plan is
locked in, and if they change it you can leave without penalty. For whatever
reason you leave, you can take your number. Pre paid plans are available as
options.

Nothing forces you to stay with a carrier. The penalty is just recouping some
of the unpaid value of the phone. You owe less as time goes because you are
paying back the value of the phone through your contract.

~~~
67726e
Correct me if I'm wrong as I always used a pre-paid phone on an MVNO prior to
switching to T-Mobile after they started their reforms, but my understanding
was that cell-phone companies would typically have something like:

PAYMENT = PRICE_OF_SERVICE + (PRICE_OF_PHONE / CONTRACT_DURATION)

I know this is a "naive implementation", but the problem is they would never
take off the charge for the phone even after one had paid it off and that they
didn't tend to have transparent billing so you wouldn't really know if/when
you had.

~~~
er35826
That is essentially correct, though the math was completely hidden.

The justification for higher contract rates was because they were using that
difference to subsidize new phones whenever you signed a new contract. So, 80
bucks a month for basic service and a few hundred MB of usage.

The problem was that after the 2 year contract ended, when they supposedly
were able to recoup the cost of the original phone subsidy, _your rate never
changed_. You'd still pay 80 bucks a month, even if you were happy with your
current phone.

T-Mobile's change, much like the rest of the world, was to break out the math
explicitly like you show. Then once you've fulfilled the (PRICE_OF_PHONE /
CONTRACT_DURATION) term, it would simply vanish.

------
thatthatis
Am I the only one who read this as "glory be to our overlords for they give us
1 in every 100 days off"

The exact same government agencies that are being praised for their pro
competition prescience allowed the market to become an oligopoly between 2000
and 2010.

[http://technologizer.com/2011/03/20/att-buys-t-
mobile/](http://technologizer.com/2011/03/20/att-buys-t-mobile/)

~~~
djur
Not the exact same agencies. Led by new appointees, with new directives. Not
so different as you or I might like, but still: political changes do affect
the regulatory system.

------
coin
T-Mobile's free 200MB/month for tablets is great, especially for text and
email on the go.

Side note: nytimes's website on mobile is totally annoying. No pinchzoom and
double tap mucks with the font size. Just as we had Flash blockers back in the
day, I look forward JavaScript blockers.

~~~
nfoz
The no-zooming thing is probably implemented with non-javascript parts of
html/css3.

Yes, the whole web sucks now. What you need is a user-agent that chooses to
carefully not implement some of its stupidity.

------
danielweber
T-Mobile is great as a company for customer service. There network isn't as
good as AT&T's, but it seems to be getting better. I don't often pick up my
phone in my house and see zero bars on it any more, but I still do
occasionally.

------
itsmeduncan
I was an early adopter when T-Mobile rolled out their $50 unlimited everything
plan in NYC. The pros outweigh the cons, but they do sometimes give me pause.
I don't have service in 90% of my apartment in the middle of Manhattan. It is
a newish(2001) building, but my fiancee has full service from Verizon. Outside
of NYC the service is fairly spotty compared to bigger networks. T-Mobile with
an unlocked 5S is priceless for travel. I just got back from a trip to Japan,
and the Philippines. You don't need a SIM card. The phone joins the network it
supports, and T-Mobile texts you your limits. 200mb of 3G data, unlimited text
messaging, and cheap phone calls were included in my standard unlimited plan
with no configuration. I pay $77.76 a month for unlimited everything, and 2GB
of tethering data. I suggest it in a bigger city or if you travel
internationally and need to stay connected. I give pause to people in the
suburbs. I am sure it will get better though.

~~~
nfoz
How high is your apartment? Service seems to scale with height, and I'm
curious how different that is between carriers.

~~~
itsmeduncan
I am on the 10th floor.

------
50MilesToGo
I decided to go with T-Mobile on my iPad Air - after 3 months I'm sold and
will be switching my mobile as soon as possible. Apparently, T-Mobile will pay
early termination fees for not only family plans, but also business accounts
registered with a Tax ID.

------
moultano
The free data is such a life saver when I go to India. It's so liberating to
be able to tell my Mom I've landed ok, to coordinate transportation, and find
my way around with maps from the moment I land.

------
contingencies
This is a billing change. Having integrated in-app payments to both T-Mobile
and AT&T, I can tell you that both of them outsource their billing systems on
the Israeli company Amdocs, widely accused of being Mossad-affiliated and
aiding and abetting intelligence gathering globally. Somehow I don't see this
change impacting their insidious reach.

------
esw
I love T-Mobile and would switch back in a heartbeat if they had decent
coverage in my travel area.

------
codereflection
As soon as their coverage increases, I'll happily drop AT&T. Kind of crazy but
here in Seattle none of the carriers besides AT&T have great coverage. You'd
think in a pretty decently sized city the signal problem wouldn't be so
prevalent.

------
chrisBob
T-Mobile is a news story because the MVNO's don't advertise. T-Mobile can't
touch Republic Wireless or Ting prices in most cases.

~~~
aestra
If you use your phone a real lot, Ting is expensive.

~~~
chrisBob
If you use your phone a real lot, Republic wireless is still just $20/month.

------
TheHippo
As German these kind of articles confuse me. Here T-Mobile are the bad guys
with expansive plans and crappy contracts.

------
slowmotiony
In the US maybe, but T-Mobile in Poland is still the most expensive option
with crappy phones.

------
vaadu
Let's hope the Comcast/TWC merger also gets nixed. Competition is a good
thing.

------
moleness
Paul Gramcracker and his marching boobs.

