T-Mobile Reportedly To Limit Abusers, Explains Rejecting Illiad Bid

NEW YORK ( TheStreet) -- T-Mobile ( TMUS) says a number of customers are abusing their unlimited LTE data plans and the company is making changes to halt the practice. According to a leaked internal document, T-Mobile will begin capping subscribers who download way too much information over the 4G wireless network.

T-Mobile stresses it has no plans to place limits on all of its unlimited high-speed data customers - just the data hogs:

“A very small number of our customers are misusing their Simple Choice Unlimited data service in violation of their rate plan and terms and conditions by bypassing the default tethering feature or engaging in peer-to-peer (P2P) file-sharing.”

The fourth place U.S. cellular provider plans to give the abusers fair warning. The carrier says it will be reach out to the offending customers “to educate them," but if the misuse continues, "they could have their data speeds reduced for the remainder of their (monthly) billing cycle."

By implementing the new policy, T-Mobile joins competitors Verizon (VZ) and AT&T (T) in reigning-in large data abusers by cutting back on download speeds after they reach a monthly limit. Analyst Paul DeSa of Sanford Bernstein & Company thinks T-Mobile's move may translate into a little bad publicity but, in reality, doesn't affect that many of T-Mobile customers. "Others have done it already and Sprint  (S) will have to do it too. Unlimited offerings are just not sustainable," he said in a phone interview.

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