T-Mobile USA, the No. 4 U.S. mobile provider, on Tuesday launched GoSmart Mobile, a nationwide prepaid wireless brand that will sell cellphone services to customers who want to pay for calls in advance.
The wireless operator, a unit of Deutsche Telekom AG (Bonn, Germany), has agreed to merge with smaller rival MetroPCS Communications (Richardson, USA). It is hoping to benefit from growth in the prepaid market to regain customers lost to rivals.
The company said it has been testing its new prepaid service in nine markets since early December and has already signed up "tens of thousands" of customers in just over two months.
"It's beat our projections pretty handily," said Doug Chartier, senior vice president of marketing for GoSmart.
He cited forecasts that the prepaid market is growing at a rate of 7 percent to 8 percent each year, and that roughly 80 million U.S. consumers opt for prepaid phones instead of contracts where they pay at the end of each month.
GoSmart services, which will be available at more than 3,000 wireless reseller stores around the country beginning on February 19, will start at $30 a month for unlimited talk time and texting services, but no mobile Internet services.
A $35 per month plan includes mobile Internet access on its slower network while a $45 plan offers higher speeds.
On the other hand, customers buying T-Mobile (Bellevue, USA) branded prepaid services currently receive five gigabytes of data services per month at the company's fastest data speeds, on top of unlimited texting and 100 minutes of talk time.
While many consumers are spending more time using their phones for data services than talking, T-Mobile is hoping to attract the people who are still more interested in using their phone for voice calls than for web surfing.
"It's not for the consumer that wants to download video," said Chartier, who noted that data heavy service plans cost a lot more than many low-income families can spend each month.
(Reporting By Sinead Carew; Editing by Gabriel Debenedetti and Jim Marshall)