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AT&T vs. T-Mobile: How Low Can Rates Go?

NEW YORK ( TheStreet) -- With T-Mobile (TMUS - Get Report) aggressively leading the way, monthly smartphone service rate plans in the United States have been dropping. T-Mobile started the trend with competitors AT&T (T - Get Report), Sprint (S) and Verizon (VZ) being forced to follow, and in some cases kicking, scratching and complaining.

Almost immediately, T-Mobile's "UnCarrier" promotions saw tangible results. In 2013, after announcing discounted plan pricing, T-Mobile was able to add customers for the first time in four years and three quarters in a row. Now, T-Mobile is raising the stakes by tweaking some of its offerings and again prompting an almost immediate response from at least one of its competitors.

Shares of T-Mobile were down 0.26% to $30.71 in early trading on Monday.


Late Friday, T-Mobile announced it will be doubling the amount of high-speed, 4G/LTE, Internet data it offers its "Simple Choice" plan customers without raising monthly fees. That means customers now paying $50/month and getting 500 megabytes of 4G data will see their data limits jump to 1 gigabyte of LTE.

After reaching the new limit, customers will still see data throttled-back to 3G speeds for the remainder of that month. The next tier of T-Mobile customers who currently pay $60/month will see their 4G/LTE data limit raised from 2.5 GB to 3 GB before throttling. The new data offerings go into effect on March 23.

T-Mobile also added unlimited International text messaging from the United States (to most countries) in addition to its unlimited talk and text plans.

T-Mobile raised some prices. Customers currently getting unlimited 4G/LTE data will be allowed to keep their additional $20/month pricing. But new customers will now have to pay $30/month for the unlimited LTE data and 5 GB of wireless tethering.

AT&T answered by lowering its prices for some of its most popular service plans. AT&T customers who have one phone and no annual service contracts will see their monthly bills drop to $65 from $80 for 2 GB of 4G/LTE data, unlimited voice calls, texting, International messaging and 50 GB of cloud storage. That same offer jumps to $90/month for two smartphones.

Verizon also saw fit to offer new deals, including "Share Everything" data plans ranging from $40/month for 500 megabytes of shared data, $50 for 1 GB, $60 for 2 GB, $70 for 4 GB and $80 for 6 GB. Share Everything is now called "More Everything."

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