March 01, 2009

T-Mobile Pricing Disparities Raising Eyebrows

Greetings. T-Mobile has been aggressively courting new customers to switch from other carriers in the U.S. -- for example through their exclusive carriage of the excellent Google Android G1 cell phone. But newer T-Mobile subscribers may be starting to feel a bit left out in the cold.

T-Mobile prides itself on its customer service -- though my own experiences as a relatively new subscriber of theirs have not been particularly stellar. 3G coverage even in supposedly supported areas tends to be spotty (lots of bobbling in and out of 3G, even just standing in one place -- sometimes with even the 2G signal dropping out entirely). And since their moderately priced plans with a decent number of minutes don't include nights/weekends, and T-Mobile doesn't provide rollover at all, the comparison with AT&T wireless plans can be disappointing in some respects.

That's not to say that there aren't positive aspects to T-Mobile, and in general the service and value provided are more or less adequate for most of my purposes. Indeed, there are certainly various problems with AT&T's wireless offerings and services as well.

But as of late, T-Mobile's promotional policies in particular have been triggering controversies around the Net.

T-Mobile tends to announce limited-time windows to sign up for various promotions, which they generate at irregular intervals. Some of these promotions look quite enticing on their face, but if you haven't been long with T-Mobile, you can be in for a surprise.

In particular, T-Mobile appears to be reserving most promotions as subscriber retention tools, and only making them available to subs of long standing. A recent "MyFavs" promotion fell into this category -- if you hadn't been a T-Mobile customer for long enough, you were out of luck.

Now comes a promotion sure to be even more controversial. T-Mobile is rolling out nationally -- over the next few days -- a promotion for an unlimited minutes voice plan for about $50/month (plus taxes, etc., of course). Considering that their existing unlimited voice plan costs nearly twice as much, this is a significant differential! Note that T-Mobile's standard 1000 minute plan (with NO night or weekend minutes) costs about $40/month. The new unlimited plan appears to be quite a deal.

The catch? Don't bother to apply unless you've been a T-Mobile sub for at least 22 months (notice how this is just under the typical 24 month contract period).

In general, I don't see anything inherently wrong with retention promotions and benefits for loyal customers. But in this case the pricing disparity seems so extreme that it essentially creates a "caste" system of T-Mobile subs, with newer subs paying much more than longer-term subscribers for the same services.

This strikes me as pushing the envelope a bit too far in terms of promotions. A relatively few months worth of that pricing differential would cover the cost of the contract early termination fee for newer T-Mobile customers.

If T-Mobile wants to maintain their image as the customer service leader in the U.S. cell phone industry, they might wish to consider opening up these promotions to all T-Mobile subscribers, not just the legacy population. Pricing disparities, taken too far, can quickly mutate from excitement to disapointment ... to resentment.


Posted by Lauren at March 1, 2009 12:22 PM | Permalink
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