Bolder Thinking Blog

With new unlimited plans, T-Mobile accommodates the 5G user, while challenging the status quo

February 25th, 2021 | Emily Groch

On Monday, T-Mobile launched its new Magenta Max plan, which enables customers to use both 5G and 4G without data limits. This makes Magenta Max the only real “unlimited” plan available in the US (all other “unlimited” plans throttle speeds when the customer reaches the high-speed data cap). The plan also features a whopping 40GB of hotspot data. The new offering, as well as data bumps to its mid-tier Magenta plan, acknowledges that in a 5G world, consumers are, or soon will be, using much more data.

T-Mobile is offering a limited-time deal pricing on Magenta Max at $47/line/mo. for three lines, but a single line costs $85/mo. (when opting into AutoPay), which bumps T-Mobile into the league of its competitors’ premium pricing. As Bloomberg aptly notes, T-Mobile is throwing off its “low-budget reputation” with the new Magenta Max offering. The “Un-carrier” also offers a new Magenta Max Unlimited 55 plan, which extends similar benefits to consumers aged 55+ at a discounted rate.

With its latest announcements, T-Mobile is putting new pressure on the industry’s current definitions of “unlimited,” adjusting data allotments to meet 5G user needs and challenging industry stereotypes of consumers in the 55+ age group.

Actually Unlimited

T-Mobile offers several “unlimited” plans and only the new Magenta Max plan offers truly unlimited data without a cap, but still, Magenta Max is a major step forward for the carrier and the industry. The update acknowledges that the current data limits won’t hold up as consumers use more data over 5G and could put pressure on competitors to offer limit-free plans as well.

Enabling Hotspots

Last year, Comperemedia published a report looking at cellular hotspotting options and opportunities. At the time, we identified the importance of rethinking hotspot (and all) data limits due to 5G’s inevitable increase in data consumption and also identified a near-term opportunity to target consumers going to vacation homes or using RV travel to vacation in a safe way during the pandemic. But as we look to a post-pandemic future, hotspotting could maintain greater importance than it did previously. If more employers embrace working-from-anywhere policies, consumers may choose more nomadic lifestyles and hotspots or tethering will help consumers stay connected as they move from one place to another. But hotspotting isn’t a meaningful connectivity option for the in-between on-the-road times when limited by meager data caps.

55+ Inclusive

In its press release announcing the new Magenta Max Unlimited 55 plan and changes to its Magenta Unlimited 55 plan for consumers aged 55+, T-Mobile called out AT&T and Verizon for only offering their 55+ plans in Florida. It pointed to its competitors’ limited view of the age group and noted that “wireless providers consistently condescend to [this group] with limited ‘senior’ plans.” In its own aggressive way, T-Mobile highlights the importance of breaking away from outdated stereotypes about 55+ consumers, including seniors. One such stale idea is that consumers in this group don’t use much data or tend to be less tech-savvy. Especially after the pandemic, when more individuals than ever got connected, we should be reconsidering how we think about any consumer segments traditionally considered “tech shy” and understand that most have become much more tech-savvy in the past 12 months out of necessity. Carriers should ensure they are offering attractive unlimited data plans and 5G access to consumers aged 55+ as much as any other age group.

T-Mobile’s plan changes to accommodate greater data usage over 5G networks speaks to its strong position in 5G – it currently offers wider 5G availability than any of its competitors (and according to some studies, greater speed). By launching Magenta Max and upgrading Magenta, T-Mobile is taking a step to show that it is 5G-ready in every way. 

It remains to be seen whether AT&T or Verizon are prepared to make similar changes to their cellular plans just yet, but eventually, they will have to enable greater data consumption too if they want their customers to have a meaningful 5G experience. The fact that T-Mobile was the first to make a move, may drive these competitors to make plan changes sooner. It wouldn’t be the first time the self-described “Un-carrier” has been the trendsetter in the wireless industry.

Emily Groch

Emily Groch

Emily Groch is Comperemedia’s Director of Insights, Telecommunications, providing omni-channel marketing analysis and competitive insights to telecom providers.