MetroPCS (NASDAQ:PCS) increased the price of its unlimited LTE smartphone data plan to $70 and will throttle the data speeds of its three other LTE pricing plans, a company spokesman confirmed.
MetroPCS increased its top-tier LTE plan to $70 per month.
The flat-rate carrier previously charged $60 for unlimited voice, texting, data, email and either its MetroSTUDIO on-demand video service or its Rhapsody Unlimited Music--it increased that price to $70 per month with its MetroSTUDIO service. The company's $60 plan now caps usage at 5 GB of LTE data and users' data speeds are slowed after they consume that 5 GB. The $60 plan includes Rhapsody.
"Customers will remain on the 4G LTE network but receive a reduced speed similar to what they might experience on MetroPCS' 3G networks," wrote MetroPCS spokesman Drew Crowell in response to questions from FierceWireless, noting that speeds will bump back up at the start of customers' next monthly billing cycle. "Even though 4G LTE speeds may be reduced, because of the 'always on' nature of our 4G LTE network, the experience for the majority of what a customer does on a daily basis, like Facebook, web surfing, etc., should continue to be solid."
MetroPCS' $50 plan now includes 2.5 GB of LTE data and the $40 plan includes up to 250 MB of data at LTE speeds. Previously, MetroPCS offered unlimited data on its $40 and $50 plans, but capped multimedia streaming at 100 MB on the $40 plan and 1 GB on the $50 plan.
"When a customer reached their streaming multimedia allowance [on the old plans], they were no longer able to access that content," explained Crowell. "The new plans simplify things that so customers no longer have to distinguish between web browsing and streaming multimedia."
Crowell explained that customers can move up to more expensive tiers at any time during their billing cycle to obtain more data.
MetroPCS has deployed an LTE network in its 14 core markets, and while the company has acknowledged that the network offers slower speeds than the LTE networks from Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T), it is a major improvement over the company's 1XRTT CDMA network. Metro also has deployed CDMA EV-DO technology in a portion of its cell sites.
Speaking at an investor conference last week, MetroPCS' Keith Terreri indicated that the company was looking at adding an additional, higher price tier for its LTE plans as a way to recoup the investment the carrier has put into its LTE network. Terreri, vice president of finance for MetroPCS, said that most LTE customers are gravitating toward the company's $50 and $60 LTE plans.
MetroPCS' Terreri said that customers on the company's previous $50 plan were consuming around 1 GB per month, while customers on the previous $60 plan were using an average of 2 GB to 2.5 GB per month. MetroPCS now counts 500,000 LTE customers since launching the service in September 2010.
BTIG analyst Walter Piecyk said Metro's move indicates the carrier needs more spectrum. "Increasing price is not an adequate long term solution for Metro, given the stronger spectrum position of its peers," Piecyk wrote. "MetroPCS must look to acquire spectrum in order to handle the rising demand on their network. Alternatively they could purse a margin destroying strategy like Leap Wireless and simply pay Sprint for expensive data roaming when their own network becomes capacity constrained."