T-Mobile continues to shake up the US wireless industry status quo with its Un-Carrier initiatives, the newest of which it’s calling Un-Carrier Amped, since they act as enhancements of existing Un-Carrier strategies. In T-Mobile’s second Amped announcement to date, the operator has introduced Mobile Without Borders, an “amping up” of its very first Un-Carrier move, Simple Choice plans.
Mobile Without Borders extends T-Mobile’s local service area to include Canada and Mexico at no additional cost. This means Simple Choice customers – postpaid and prepaid consumer customers as well as business customers -- can use all plan features, from voice calling to LTE data usage to free music streaming, within Canada’s and Mexico’s borders just as if they were in the US. And the initiative doesn’t just cover usage within Canada or Mexico: Calls to those countries from the US also incur no additional charge.
T-Mobile beats AT&T to market with North American calling area
The inspiration for this initiative no doubt came from AT&T’s recent acquisitions of Mexican wireless operators. John Legere, the outspoken president and CEO of T-Mobile, said: “After spending billions buying up Mexican telecoms, AT&T’s CEO is promising ‘the first seamless network covering Mexico and the US,’ something ‘unique’ that ‘nobody else will be able to do for the consumer.’ So much for that. They won’t be the first. And they won’t offer Canada for free.”
T-Mobile is able to offer Mobile Without Borders by forming partnerships with top carriers in Mexico and Canada to provide reciprocal usage of each other’s networks for a low cost. T-Mobile’s CEO did not list the partner networks, but in examples mentioned Telcel and Telefonica, Mexico’s no. 1 and 2 operators; and Rogers, Bell, and Wind, Canada’s no. 1, 3, and 4.
This is the second Un-Carrier move that was a response by T-Mobile to the actions of big carrier rivals, rather than a novel innovation. The first instance was the Music Freedom music streaming service, which T-Mobile introduced in June 2014 in reaction to competitors' offers at the time: AT&T had a standing partnership with Beats Music that began in January 2014, and Sprint had just launched an enhanced music partnership with Spotify in April 2014. For T-Mobile, offering a streaming service might have been a less expensive way to offer its customers a music content offering, since it did not have to forge an exclusive deal with one provider or negotiate agreements with multiple partners.
Similarly, in the case of its new initiative T-Mobile has found a way to provide what AT&T will soon offer, but for a much smaller investment. As a result of its Mexican wireless acquisitions, AT&T plans to offer a “North American service area” covering Mexico and the US. (The service is not available yet, and full details have not been announced.) For what is no doubt a much smaller investment – partnerships with carriers in Canada and Mexico rather than acquisitions – T-Mobile was first to market, and has one-upped the forthcoming offer from AT&T by including Canada. The downside of this initiative for T-Mobile is a loss of roaming revenues.
It will be interesting to see how other US carriers respond, with both T-Mobile and AT&T soon to be cutting roaming charges in North America. Most of T-Mobile’s Un-Carrier moves so far have prompted other carriers to respond with similar moves of their own.
T-Mobile's Un-Carrier Strategy: Assessing the Impact, TE0009-001404 (April 2015)
T-Mobile US Update, September 2014, TE0001-000875 (October 2014)
Kristin Paulin, Senior Analyst, North & South America