T-Mobile, Virgin Offer New Low-Cost Plans

Both carriers have introduced dirt-cheap prepaid service plans -- but beware of a few catches.
2014: The Year In Search
2014: The Year In Search
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T-Mobile and Virgin Mobile are hoping to score bargain-seeking customers with their new no-contract service plans. T-Mobile's latest offering starts at $40 per month for a single line, while Virgin is the first to offer shared data to multiple prepaid lines. On the surface the plans seem like a good deal, but there are some major caveats hidden in the fine print.

First, T-Mobile: The company revealed its Simply Prepaid offering on Thursday. The plan has three tiers: The first costs $40 per month and provides unlimited 2G data, unlimited talk, unlimited messaging, and up to 1 GB of LTE 4G data. The second tier costs $50 per month and boosts the LTE bucket to 3 GB, and the third tier costs $60 per month for 5 GB LTE.

At face value, these no-contract plans look pretty good. However, T-Mobile is not offering its best LTE speeds -- not even close. Customers who sign up for a Simply Prepaid plan will see maximum LTE download speeds of 8 Mbps. That's about one fifth the speed available to T-Mobile's more valuable post-paid customers. Subscribers who exceed their monthly 4G LTE allowance will see their data speeds throttled down to a lowly 128 Kbps for the rest of the month. Ouch.

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There are other restrictions, too. For example, the Simply Prepaid plan does not include tethering, Data Stash, Simple Global, Music Freedom, or other Simple Choice features. The lack of tethering is a real downer, as it means users won't be able to use their handsets to provide Internet access to work-critical devices such as laptops or tablets. (It's worth mentioning T-Mobile's Simple Choice plans, which include all the features mentioned above, start at $50 per month.)

If these caveats and restrictions don't bother you, feel free to sign up when the T-Mobile's Simply Prepaid plans become available on Jan. 25.

Next, Virgin Mobile. Its proposition, announced Friday, is a bit more interesting -- especially for small businesses. Virgin claims to be the first carrier to offer shareable data to prepaid customers.

Here's how it works: Virgin will allow two, three, or four lines to share data between them. The two-line plan costs $65 per month for both lines and includes unlimited voice minutes and messaging, and up to 4 GB of data. The three-line plan costs $90 per month and boosts the shareable data to 8 GB. The four-line plan costs $115 per month and includes 12 GB of shareable data. Customers can manage the data via Virgin's mobile app, and parental controls are included at no extra costs.

As with T-Mobile's plans, there are some critical factors impacting the appeal of Virgin's shared data offering. First and foremost, the offer is limited to customers who shop at Walmart. Virgin customers won't be able to sign up for the shared data plan at Virgin's stores. They'll have to go to Walmart. Second, only four handsets are compatible with the plan: HTC Desire 510, LG Volt, LG Tribute, and Samsung Galaxy Core Prime. None of these devices is an enterprise-class workhorse. Virgin said more handsets should be compatible with the plan by the end of February.

If you're worried the shared data allotments won't be quite enough, Virgin has an enticing account add-on: Spend $5 more per month per line and you'll get unlimited monthly access to Facebook, Twitter, Instagram, and Pandora. If you're big on social networking and streaming music, the extra $5 can add up to big savings.

These plans don't target large businesses, but they could make sense for some small businesses. But companies that need thousands, hundreds, or even dozens of lines will be best served by going through the enterprise sales channels of the big four US carriers.

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