NEW YORK (AP) — Unlimited wireless data is back. After sliding off the menu of cellphone plans, data plans with no caps are making a comeback at smaller wireless companies trying to compete with AT&T and Verizon.
T-Mobile USA, the nation's fourth-largest cellphone company, said Wednesday that it will start selling an unlimited-data plan again on Sept. 5, after stopping sales of such plans early last year. A day earlier, No. 5 carrier MetroPCS cut the price of its unlimited-data plan as a promotion for a limited time.
The moves by T-Mobile USA and MetroPCS, neither of which sells the iPhone, come as their three larger rivals are thought to be gearing up to begin selling the iPhone 5 in a month or so.
No. 3 carrier Sprint Nextel Corp. already has an unlimited-data plan and credits that with helping it attract customers for its smartphones.
AT&T, the nation's second-largest carrier, stopped signing up customers for unlimited data plans two years ago, while No. 1 Verizon Wireless stopped last year. Both have shifted toward lifting all limits on calls and texting, but limiting data usage.
From a network management perspective, that makes sense, as calls and texts use very little network capacity, while video downloads and other data use can clog the network and slow the service for everyone. The iPhone and the data use it encouraged initially caused big problems for AT&T in New York and San Francisco. Sprint's network is showing signs of congestion in some tests.
Limited-data plans pose problems for customers, however. It's easier to figure out how many minutes of calling you need in a month than it is to figure out how many gigabytes you'll use.
T-Mobile is launching the plan because it's what customers want, said Kevin McLaughlin, vice president of marketing at the Bellevue, Wash., company. He said the company is confident it can keep its network "fast and dependable" even with unlimited-data users on it.
T-Mobile's unlimited plan will cost $30 per month when added to a regular calling and texting plan and $20 when added to a cheaper "Value" plan offered to customers who bring their own phones. MetroPCS Communications Inc.'s unlimited plan will cost $55 per month during the promotion period, down from $70, and will include unlimited texting and calls.
T-Mobile had been calling all its data plans "unlimited," but once a customer hits a certain level of usage in a month, it would slow down speeds drastically. AT&T manages remaining subscribers on unlimited plans the same way. Under T-Mobile's new unlimited plans, all data would be at maximum speed.
T-Mobile's new plan will cost $5 less than a regular data plan with 5 gigabytes of full-speed data. The advantage of the limited plan is that subscribers can turn their phones into "mobile hotspots," linking tablets and computers to the Internet through the phone. That's not allowed under the unlimited plan.
T-Mobile USA and MetroPCS may have room on their networks, giving them some leeway, at least for now, in offering unlimited data.
T-Mobile has upgraded its network to higher speeds and is losing customers, in large part because it doesn't sell the iPhone.
MetroPCS, a Dallas-based cellphone company that targets low-income urban households, has nearly completed another network upgrade that enables higher data speeds, but only 8 percent of their customers can take advantage of it. The rest need new phones.
"The bottom line is they have capacity available to attract quite an influx of subscribers without pulling down the network," said Steven Crowley, an independent network engineering consultant.
T-Mobile USA is a unit of German phone company Deutsche Telekom AG and has 33.2 million subscribers. MetroPCS has 9.3 million.