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MetroPCS axes 3 unlimited plans

Tue, 04/03/2012 - 2:55pm
Maisie Ramsay, Wireless Week

MetroPCS wiped out all but one of its unlimited data plans today, capping usage on its three cheapest plans and leaving only its most expensive rate in place for all-you-can-eat LTE service.

Once customers reach their allotted threshold, they will remain on the prepaid operator's LTE network but "receive a reduced speed similar to what they might experience on our 3G networks," a company spokesperson said.

Even with the downshift in speeds, "the experience for the majority of what a customer does on a daily basis … should continue to be solid," the spokesperson said. MetroPCS' LTE service is available in 14 markets, and it also operates a CDMA network.

The plans used to offer unlimited data at regular LTE speeds and varying amounts of streaming video and audio.

MetroPCS' $40 plan now comes with a 250 MB cap, the $50 plan tops out at 2.5 GB and the $60 plan allots 5 GB before throttling kicks in.

The only plan to still offer unlimited, full-speed LTE service costs $70 per month.

The changes are similar to the way T-Mobile USA phased out its unlimited service. It also implemented new plans that slowed customers’ speeds after they consumed a certain amount of data.

MetroPCS said it changed its rate plans to "best match our customers' data usage" and "simplify" its plans so subscribers didn't have to distinguish between Web browsing and streaming multimedia, as they did with the old plans.

But BTIG Research Analyst Walter Piecyk has a different take.

After rumors of the rate plan shakeup emerged yesterday, Piecyk wrote in a blog post that MetroPCS likely made the changes because "of its constrained spectrum position and inability to sell to Sprint."

MetroPCS, reportedly an acquisition target of Sprint's, has extremely limited spectrum resources and is using just 5 x 5 MHz to run its LTE network – half the 10 x 10 MHz channels used by Verizon Wireless.

"Operators are running out of capacity and have little faith that the FCC can source new usable spectrum," Piecyk said, linking recent industry price hikes to the failure of AT&T's merger with T-Mobile USA, which may have put spectrum on the market through FCC-mandated divestitures. "MetroPCS and other wireless operators are likely to simply increase pricing on the limited, remaining capacity on their networks."

MetroPCS’ decision to rein in its customers' data usage shouldn’t come as much of a surprise. As Piecyk pointed out, the operator’s finance chief told investors last month that it was “looking very closely at potentially capping our $60 plan … and then doing an up-charge for true unlimited data.

Even with the “up-charge,” MetroPCS’ $60 5 GB plan is still the “lowest price in the industry,” the company spokesperson said.

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