Apple Inc. (AAPL), AT&T Inc. (T), and T-Mobile’s New “Un-Carrier” Phone Plan: Game Changer or Dud?

Will it succeed?
T-Mobile is trying to attract customers through a clear value proposition, but the proliferation of different plans and features at different carriers will make it very hard for T-Mobile to gain traction. I think T-Mobile could have substantial appeal to certain people, particularly those who need unlimited voice and unlimited data and those who are happy to keep using older phones. However, for most users, the T-Mobile plans will be fairly comparable in price to their current plans from AT&T Inc. (NYSE:T), Verizon, and Sprint. Furthermore, many Verizon and AT&T Inc. (NYSE:T) users are further locked into their current carriers through bundles that include TV, home phone, and/or Internet service. A large segment of the market is simply out of reach for T-Mobile.

In a lot of ways, T-Mobile’s conundrum reminds me of the problems J.C. Penney Company, Inc. (NYSE:JCP) has faced in the past year. J.C. Penney Company, Inc. (NYSE:JCP) CEO Ron Johnson thought he could retrain customers to prefer a simpler price scheme that emphasized everyday value rather than marking items up in order to put them on sale. However, consumer psychology won out over what appeared to be common sense. T-Mobile’s plans are in many cases cheaper than comparable plans from the major wireless carriers, and do not force contracts on customers. Nevertheless, the vast majority of mobile customers seem perfectly happy to pay hefty monthly bills in return for a “free” (or cheap) smartphone every other year. T-Mobile therefore faces an uphill battle to regain its relevance.

The article T-Mobile’s New “Un-Carrier” Phone Plan: Game Changer or Dud? originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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