T-Mobile on Thursday announced that there would be no added charges for its U.S.-based Simple Choice customers when they call, text or use data to Mexico and Canada or when traveling there.
The move, which takes effect Wednesday, makes T-Mobile the first carrier to offer continental phone service under a single plan anywhere in the world, company officials said.
The new Mobile without Borders plan means that customers can call from the U.S. to both countries for no added cost as well as when they travel in both countries.
Both consumers and business customers will be eligible, although business customers will pay $1 more per phone line for accounts with more than 10 phone lines, with no added cost for the first 10 lines.
CEO John Legere said the impact on business customers will be especially pronounced. About 70% of travel by small and medium-size businesses is to both countries, T-Mobile said, citing data from the travel industry. Also, 35% of all international calls across the phone industry were from the U.S. to the two countries last year.
During a conference call to announce the new plan, Legere blasted GOP presidential contender Donald Trump for his comments on wanting to build a wall on the U.S. border with Mexico, at a time when joint trade opportunities are expanding and the need for affordable communication and interactions is expanding. The new Mobile without Borders phone plan offers an alternative to the proposed wall, he contended, while jabbing at Trump.
"Donald Trump wants to put a wall up, but our phone coverage will work seamlessly" between the two countries, Legere said. "Don't worry about the wall." He quickly added: "Sorry, Donald, for hurting your major platform for running for president. Donald Trump is the gift that keeps on giving...He really is entertaining."
Legere saved his biggest condemnation for AT&T CEO Randall Stephenson, for recently buying two Mexican wireless carriers for $4 billion to be able to offer AT&T phone services there as well as in the U.S. "Sorry, Randall, you are not the only and first" provider for Mexico and the U.S., Legere said.
Legere said it wasn't necessary for T-Mobile to operate its own network in Canada and Mexico and will rely instead on the two largest carriers in each country to supply service. T-Mobile was able to forge reciprocal roaming deals with the four foreign carriers, which he didn't name, to lower traditional costs. In Mexico, Telcel, with 70 million customers, and Movistar, with 20 million, are the two largest carriers, according to recent industry data. In Canada, Rogers is the largest with 9 million customers, while Telus and Bell are nearly tied with 8 million apiece.
Those T-Mobile partners have plenty of 4G LTE service in major cities that offer fast data services, Legere said. Even though T-Mobile has expanded LTE coverage in the U.S., critics often ding the carrier for having weak or spotty coverage outside of major U.S. cities. Analysts said it remains to be seen how thorough the coverage is in Canada and Mexico.
Even with such concerns, analysts said the new plan will appeal to travelers, both consumers and business.
"T-Mobile is stealing the industry's -- and especially AT&T's thunder -- by expanding the free calling area to Mexico and Canada," said Roger Entner, an analyst at Recon Analytics. "The new plan is most appealing to people who, no surprise, call and travel to Mexico and Canada the most."
For business customers using Mobile without Borders, T-Mobile adapted its "Un-carrier for Business" plans announced in March.
Under the March announcement, the first 20 business lines would cost $16 a line (or $15 a line for 21 lines or more) per month, which includes voice and text and 1 GB of data. With the Mobile without Borders plan, the first 10 business lines cost nothing extra, but there is a $1 added cost per phone line for 11 or more lines, T-Mobile officials said.
With the Mobile without Borders plan, 50% of the calls, texts and data used every three months must be done from inside the U.S. That restriction keeps the plan devoted to U.S.-based customers, T-Mobile said.
The March business plan was immediately so successful that it produced a 120% increase in traffic flow into 3,000 T-Mobile stores, Legere said. T-Mobile might provide more details on the bottom-line impact of its business plans when it announces earnings on July 30, he hinted.
"Overall, we've been astounded" by the interest from businesses, said Rakesh Mahajan, senior director of marketing for @Work at T-Mobile. Some customers have said they didn't realize T-Mobile was in the market for business customers.
Mahajan said Mobile without Borders could be expanded beyond Mexico and Canada to other countries. "We started with the biggest opportunity and customers will figure out where we go next," he said. Legere and other officials didn't commit to offering such a plan in Europe, when asked.
Mexico in particular has been an attractive market because trade barriers have been lowered in recent years, meaning more U.S. businesses are working with manufacturing partners in Mexico, he said.