T-Mobile (NASDAQ:TMUS) rarely makes a move without calling out one or more of its rivals.
The company did exactly that when it announced its new family plan sending an email to media where CEO John Legere called out Verizon (NYSE:VZ) for spending millions promoting an "$80" shared data plan where everyone has to share 10GB of data.
"The catch is, it's not actually an $80 plan," Legere said in the email. "You can't actually use any of that data until you pay additional 'line access' fees for data you've already bought. So, when they say $80, they actually charge a family of four at least $140. And that's to share 10GB."
What is T-Mobile offering?
As part of its Amped series of Un-carrier announcements, T-Mobile has unveiled a family plan where each member of the family gets 10GB of data each month. With the offer, two family members get 10GB of data for $100 a month. Adding lines cost $20 per per person and each new user also gets his or her own 10GB of data with no sharing.
Every line includes unlimited data, talk and text with no annual service contracts, no overages, data and texting when traveling internationally in over 120 countries at no extra charge. Customers can also rollover unused data to the next month and under T-Mobile's "Music Freedom," program, a number of top streaming services don't count against data totals.
To sweeten the deal, the company is also offering a fourth line for free from now through Labor Day. That means that a family of four will each get 10GB of of 4G LTE data for each person for $120 per month. Phones are not included in the deal, so people who take T-Mobile up on the offer will either have to buy or finance handsets for each line.
The company laid out how its deal differs from Verizon's in a press release:
When you do the math on the real numbers for Verizon's $80 shared data plan, it's shocking. You'll pay $80 a month for 10GB of data for everyone in the family to share. Then on top of that, the carrier will make you pay an additional $15 per line per month just to access the data you've already paid for. For a family of four, that comes to $140 -- and that's before the shock overages you'll end up paying unless you police your family's data usage to keep it below the 10GB limit. Each GB beyond your limit will add another $15 to your monthly bill.
T-Mobile likes its inflammatory language, but you can't argue that the company has a point. Verizon's plan costs more and its line access fees have always felt like a tricky way to avoid advertising the actual price of its service.
Will this help T-Mobile?
Legere constantly calls out his competitors and sheds light on the standard tricks of the trade used by the wireless industry. In this case, as it usually is, his outrage may be a bit manufactured, but it's justified.
"Why share Verizon's 10GB with everyone when you can have 10GB of America's fastest 4G LTE all to yourself?" said Legere. "The way the big carriers offer shared data is just a scheme concocted to trick customers into over-paying or to slam them with overage fees. We're bringing sanity to family plans and peace of mind to data-hungry families -- because that's what the Un-carrier does."
T-Mobile has been adding subscribers at an unprecedented rate since Un-carrier began and this offer should continue the momentum. It's not only a low price for a family of four, it's also a straightforward one where your monthly bill will be the same every time.
No single move will vault T-Mobile ahead, but each Un-carrier initiative pushes it forward and this one should continue that momentum.
Daniel Kline has no position in any stocks mentioned. He only has three people in his immediate family or he would consider this deal. The Motley Fool recommends Verizon Communications. 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.