T-Mobile and Uncarrier: Free Music Data Changes the Game

Bringing unlimited music streaming to its limited high-speed data plans could be a carrier differentiator for T-Mobile.

Jun 22, 2014 at 9:01AM
T Mobile Music

T-Mobile will allow music streaming that doesn't use up a customer's data plan. Source: T-Mobile.

Earlier this week, T-Mobile (NASDAQ:TMUS) launched a new uncarrier feature for its mobile customers, where the company will allow subscribers to stream music from iTunes Radio, Rhapsody, Spotify, Pandora, and other music apps without ever tapping into its data plans.

The move is one of the biggest data deals a wireless carrier has made with apps that gobble up huge amounts of data, and it could spur similar deals by other carriers in order to woo customers.

Removing the data barrier
T-Mobile isn't the first U.S. wireless carrier to strike a deal with a music-streaming app, but it is the first to make so many deals with app makers and not count their data usage against customers. This isn't just a free year, either; there are no time limits to this new service.

This matters for T-Mobile customers because the company currently has several plans that don't come with unlimited high-speed 4G data. So, giving away music streaming -- which uses a huge amount of data when streaming -- is a big deal.

Aside from the benefit for T-Mobile customers, this move may spur other carriers to take a new approach to data.

Using data deals to sell phones
T-Mobile is clearly doing this to attract new customers and keep current ones, and overall, it's a good strategy for that purpose (but likely not a good long-term plan).

This isn't the first time T-Mobile has tried this approach, though. Late last year, one of the company's brands, GoSmart, began offering free Facebook (NASDAQ:FB) data to subscribers -- one of the first plans in the U.S. to do so. Facebook has worked deals with overseas carriers in the past to keep its app from counting against a user's data limit, but T-Mobile's GoSmart brought that tactic home. 

The fact of making so many data-consuming apps not count against a users' plan might be a new approach for the U.S. carrier industry going forward. For now, T-Mobile is the only one doing this on a mass scale, but just like other promotions the company has rolled out, it's possible AT&T and Verizon Communications may try their hand with similar services.

Currently, though, this is a carrier differentiator for T-Mobile, and it comes at a time where smartphone music streaming is red-hot. In a recent survey of 7,000 teens, both iTunes and Pandora ranked in the top 10 apps, with Pandora taking the No. 6 spot. It'll take at least a quarter to figure out whether or not T-Mobile's been successful with its new initiative, and I think investors should be looking to see how the competition responds.

Carriers are preparing for this
While mobile devices have clearly been the focus for wireless carriers up until now, there's another tech revolution that will soon be riding on the wireless networks -- wearable technology. There's one small company that's making these gadgets possible, and it could be a perfect play on the coming wearable tech revolution. To find out more about this stock, just click here.

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, and Pandora Media. The Motley Fool owns shares of Apple, Facebook, and Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information