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March 31, 2014

T-Mobile’s latest UnCarrier move: removing employer discounts

by John_A

T-Mobile Holds Announcement Event In New York

Over the past year, T-Mobile’s new policies have ushered in a new wave of changes to the way the US wireless industry works. It was the first national operator to introduce phone financing plans, early upgrades and free international roaming; additionally, it also offers to pay your cancellation fee if you break another carrier’s contract to move over. It appears that such practices must come at a cost: CEO John Legere announced that beginning April 1st, T-Mobile will no longer offer its Advantage Program, which features monthly employer rate plan discounts, to new customers. Existing beneficiaries will see the deduction removed from their accounts on April 25th. As a consolation, affected subscribers will now receive a $25 reward card every time they get a new phone.

First, we’ll dive into what this entails. Most wireless operators broker deals with corporations in which employees of that company get a percentage discount on their monthly rate plan — often, the discount increases as more employees sign up for service. Typically these incentives will range from 5 percent to as much as 30 percent. By removing them, many customers may find themselves with a noticeable change to their bill. If you’re a government employee (including military), you’re exempt from this transition and you’ll continue to receive your usual discount.

In a blog post, Legere explained his reasoning behind the change:

The old programs were designed to help big carriers close big corporate contracts, with employees as bargaining chips. We aren’t playing that game anymore. This change is about simplifying wireless for everyone … including employees of small and large companies alike.”

Legere maintains that despite this move, the value of T-Mobile’s Simple Choice plans are still much better than “the other guys.” Unsurprisingly, he’s positioning this modification as another in a string of UnCarrier initiatives to prove that his company’s changing the game by separating itself from the rest of the industry. In a series of tweets to disgruntled customers, Legere answered concerns by saying that not all of T-Mobile’s customers could take advantage of these discounts, and he wanted to apply the cost savings to the entire subscriber base instead of reserving them for exclusive deals.

Many of the company’s earlier changes have been immensely successful — Simple Choice, Jump! and unlimited international text plans are just a few examples. But there are also a few recent policy changes which haven’t been as popular: last month T-Mobile adjusted its Jump! early upgrade plans so you could only upgrade once you’ve paid off half of your phone, and earlier this month it bumped unlimited data rates up $10.

Arguably, these aforementioned changes may simply be side effects of those UnCarrier moves that have proven quite successful. After all, incentives (such as free international data) come with its fair share of costs, and T-Mobile needs to compensate for those losses somehow — especially since Legere announced that the company will continue adding more UnCarrier plans in the future. “This is just one more step in the [UnCarrier] movement,” he said. “And, we’re not done yet.

[Image credit: Getty Images]

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Source: T-Mobile

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