T-Mobile CEO John Legere, introducing the Un-carrier 8.0 policy change. Image source: T-Mobile announcement video.
Everything old is new again. It's just that the old concepts move into environments that have evolved over the years.
T-Mobile is bringing an old idea into an evolved realm in its latest Un-carrier policy change. Under the terms of Un-carrier 8.0, announced Tuesday, all T-Mobile subscribers, both new and existing, can roll over unused high-speed data allowances into the next month. In T-Mobile's terminology, the unused data falls into your personal "Data Stash" and will stay there for up to a full year unless used.
I'll get into the nitty-gritty details and what I expect the competition to do in just a minute. But first, come with me to 2002.
Back then, there were no smartphones or data-slurping tablets. Instead, cell phones were sold on the merits of their unique styling (OK, so some thing haven't changed) and voice calling performance. So when Cingular Wireless announced the first cell phone plan with rollover minutes, it was game-changing news.
Two months later, Cingular folded the innovative rollover plan into its regular nationwide calling plans. This feature helped Cingular become one of the largest wireless services in the nation, first as a stand-alone business and later as part of the AT&T empire. Rollover minutes stayed exclusive to Cingular/AT&T for many years, only recently making their way over to Verizon's prepaid plans.
Neither T-Mobile nor Sprint ever jumped on the rollover minutes bandwagon, and the industry as a whole eventually moved on to unlimited talk and text for all but the most frugal ultra-budget plans. That transition took the better part of a decade, starting from Cingular's first rollover-minutes offer.
Is T-Mobile grabbing another revolutionary opportunity to turn consumer heads, much like Cingular's rollover minutes idea did back in the day? I don't think so, for better and for worse.
From T-Mobile's perspective, it would obviously be great if nobody else copied the rollover data -- sorry, CEO John Legere insists on calling it a "Data Stash" -- idea, while smartphone buyers everywhere latched on to the new and better experience in droves. That would be another industry giant in the making, at the expense of slower-moving rivals that prefer sticking to a strict monthly data allotment per subscriber.
But that's not how things work anymore. New ideas are quickly absorbed by the industry as a whole, even if AT&T and Verizon sometimes must be dragged into the new era kicking and screaming. It happened with unlimited text and talk, first offered by Sprint and now bog-standard across the wireless market. It happened with T-Mobile's contract-free sales, which have been copied by all the other major networks.
If it turns out that consumers really want to roll over unused data allowances, rest assured the other networks will follow T-Mobile's lead again. Legere himself said Tuesday he expects this to happen, and claimed to only want to rebuild the wireless industry from within. It's all about the consumer, you know?
Don't believe that best-buddy talk for a minute. Legere is still running a business, and shareholders will remind him if necessary.
As a consumer, I hope this idea catches on like wildfire. But what's good for the user is often bad for the profit margin, as some subscribers find themselves relying on this new feature rather than upgrading to heftier data plans when the bits and bytes occasionally run out. T-Mobile (and prospective copycats) is trading in a bit of profit margin in exchange for a few extra sales and more customer loyalty.
The article Will T-Mobile's Un-carrier 8.0 "Data Stash" Rollover Be Game-Changing? originally appeared on Fool.com.
Anders Bylund has no position in any stocks mentioned. 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.
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