After introducing a $40 base plan and then doing away with extra charges for cellular tablets and giving them a free gigabyte of data, T-Mobile is at it again by doing with overage fees. The elimination of domestic overage fees hits all T-Mobile plans. T-Mobile CEO John Legere called out his competition, pointing out that overage fees amount to $1 billion in extra payments from consumers every year.
Being the poking and prodding type, T-Mobile has also started a petition on Change.org to put a voice towards ending overages on competing carriers as well. It's a PR stunt, sure, but it also gives a bit of a voice (let by a corporation) to the people.
When T-Mobile Simple Choice subscribers do go over their limit, they won't be hit with overages now. Their access to data will continue, but their speeds with be throttle back to 2G speeds. On the Simple Starter plan with its 500MB cap, they'll be presented with the option to purchase additional data passes to make it through the end of the month.
T-Mobile Abolishes Consumer Overages, Challenges Other Wireless Providers to Follow Suit
Legere Starts Petition for Consumers to Call on AT&T, Verizon and Sprint to End Overages
BELLEVUE, Wash. - April 14, 2014 - T-Mobile US, Inc. (NYSE: TMUS) today shifted the national conversation on wireless to a new level, unveiling its latest Un-carrier move - a campaign to eliminate overage penalties, one of the most reviled wireless industry practices. While abolishing overages for all customers on T-Mobile consumer plans, its CEO has also laid down a challenge to the nation's largest carriers, AT&T, Verizon and Sprint, to do the same.
More than 20 million Americans were hit with punitive overage charges in 2013. And these penalties from the three largest U.S. carriers take more than an incredible $1 billion out of consumers' pockets every year.
"Today I'm laying down a challenge to AT&T, Verizon and Sprint to join T-Mobile in ending these outrageous overage penalties for all consumers - because it's the right thing to do," said John Legere, president and CEO of T-Mobile. "Overage fees are flat out wrong. Agree with me? Join me in putting this challenge to all the major national carriers by signing my petition on Change.org. Right here. Take one minute to be a part of this consumer movement."
Last year, T-Mobile banished annual service contracts and began phasing out overage charges with the launch of Simple Choice. T-Mobile's stance against annual service contracts is now well known by consumers, and today it's taking on the even more unpopular and unjustified practice of slamming consumers with surprise bills in the form of overages charges.
"Charging overage fees is a greedy, predatory practice that needs to go," continued Legere. "Starting in May for bills arriving in June - regardless of whether you're on Simple Choice, Simple Starter or an older plan, we're abolishing overages for good. Period."
Traditional carriers' entry-level plans lure customers in with a low monthly fee for a fixed amount of domestic minutes, texts or data. Once consumers go over those limits - even by a little - they're hit with much higher rates, often dramatically higher. These plans are purpose-built to drive customers over that invisible line into massive overage charges. The result has been a culture of fear, worry and surprise every time the wireless bill arrives. For example, an individual on AT&Ts entry-level plan, advertised at $45 per month, will pay $125 if he uses just the average amount of data for a U.S. smartphone user (1.5 GB per person).
"The worst thing about these overage fees is that they're often inflicted on those who can least afford them," added Legere. "As an advocate for consumers, we're putting a stop to that. I personally won't be satisfied until we obliterate this shameful practice from the entire wireless industry."
To give a voice to U.S. wireless consumers, Legere has started an online petition at Change.org/AbolishOverages calling on AT&T, Verizon and Sprint to end overages. You are invited to sign the petition and add your voice to the growing movement to rid the wireless industry of domestic overages once and for all.
For more information, visit the T-Mobile Newsroom, download T-Mobile b-roll or read John Legere's blog about today's announcement.
Overage estimates from third party bill screening report surveying over 20,000 wireless customers multiplied by major U.S. carriers' reported postpaid subscribers. No overages for U.S. domestic calls, texts, and data usage only. Visit a T-Mobile store for details. As always, we encourage customers to review their plans and features, and talk with our retail associates to make sure their current wireless service gives them everything they need.
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Derek Kessler is Special Projects Manager for Mobile Nations. He's been writing about tech since 2009, has far more phones than is considered humane, still carries a torch for Palm, and got a Tesla because it was the biggest gadget he could find. You can follow him on Twitter at @derekakessler.