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T-Mobile’s unlimited plan another step towards prepaid future

We see it every quarter: T-Mobile loses subscribers on the whole, almost all of them coming from the contract side of the business. Those losses would seem much steeper if T-Mobile weren’t adding significant numbers of prepaid customers every quarter. For the past two years consumers have been going with T-Mobile’s stable of no annual contract plans, rather than committing. After seeming attempts to fight the shift with competitively priced postpaid plans, it appears that T-Mobile has finally embraced the move to prepaid. Not only did they agree to a merger with prepaid carrier MetroPCS, but they have also made prepaid concessions with their own plans. Last week they took one big step into the prepaid future.

Thanks to changes at the nation’s two largest carriers, Verizon and AT&T, unlimited data is a rarity. Even prepaid carriers that offer unlimited data have limitations. T-Mobile, however, has touted its truly unlimited data plans, going so far as to create lower tiers with 4G data limits. Last week they removed contract restrictions from the Nationwide 4G plans. Customers can pay $70 per month, then, for unlimited talk, text, and data on T-Mobile’s HSPA+ network. This new plan will go into effect on January 25th.

Another sign of the coming prepaid future at T-Mobile: the removing of phone subsidies. Last year T-Mobile CEO John Legere passionately discussed his opposition to subsidies, and in a few months his vision will become reality. When T-Mobile launches the iPhone on its own network, it will do away with phone subsidies. Combined with no annual contract plans, T-Mobile will essentially have transformed itself into a prepaid carrier. As the lagging No. 4 carrier in the country, this might be a necessarily bold gamble.

Chances are T-Mobile will continue allowing customers to finance handsets, relieving some of the burden of the high up-front costs. Both MetroPCS and Cricket offer financing for their handsets, though T-Mobile offers it on slightly friendlier terms. Those friendly terms could lead customers to T-Mobile, where they can make a small down payment on an expensive phone and have no real commitment, other than repaying the full cost of the phone.

Verizon and AT&T might have a stranglehold on the mass market, but there are certainly niche markets ripe for expansion. T-Mobile just might have found one with prepaid.