T-Mobile Ends Overage Charges for Customers on Older Plans
T-Mobile, which had largely eliminated domestic overage charges, said Monday it will eliminate all such penalties for those who go over their data limits.
On May 1, the wireless carrier will abolish these punitive charges for T-Mobile customers who subscribe to older plans with usage caps. Instead of imposing extra fees, it will slow data speeds when subscribers exceed their data limits (which may not exactly thrill them, either).
That is how the company already deals with things for most customers on its Simple Choice plans. Its just-introduced Simple Starter plan cuts off data once users hit their limit, encouraging customers to buy a day or week pass.
Chief Marketing Officer Mike Sievert declined to say how many T-Mobile customers would benefit from the change, instead citing an industry-wide figure of 20 million Americans socked with such charges last year. T-Mobile said the three largest carriers reap about $1 billion annually in such fees.
“It’s a 30-year-old industry practice that many of us have become accustomed to as normal,” Sievert said of carriers asking wireless consumers to guess, in advance, how much voice and data they’ll use — then penalizing them when they guess wrong. “In the context of everything we buy in our lives, it’s absurd.”
T-Mobile began phasing out these overage charges last year with its Simple Choice plan, which offers unlimited talk, text and data.
The company is hoping to make some hay with the overage move though, with CEO John Legere even launching an online petition, through Change.org, to call on rivals AT&T, Sprint and Verizon to end overage charges. He evoked a G-rated variant of the popular quote from the 1976 movie “Network,” noting, “It’s time to show these companies that we’re not going to take these outrageous fees lying down anymore.”
Other carriers deal with the overages in different ways — sending consumers alerts as they approach their limits, and providing online tools to calculate which plans might meet their needs.
Sprint, meanwhile, is the only carrier that offers unlimited data standard for customers. (T-Mobile offers it as a paid option, while AT&T and Verizon have an ever-shrinking number of customers grandfathered in to unlimited plans.)