T-Mobile, Sprint escalate price war with new unlimited plans

T-Mobile US and Sprint are revamping their rate plans to appeal to consumers who want unlimited streaming and web surfing as the industry's battle for wireless subscribers enters a new phase.

Under a plan called "T-Mobile One," a family of four can get unlimited data for $160 a month. Currently, that rate would only get the family 10 gigabytes for each of the four phone lines — still plenty of data for many users. And T-Mobile says its most popular plan is for 6 gigabytes per phone — which costs $120 a month. Existing plans will still be offered and then slowly phased out starting Sept. 6, according to Chief Executive Officer John Legere.

A family of four can also now get an unlimited data plan from Sprint for the same price — $60 a month for one line, $40 for a second, and $30 for each additional line. For the same type of plan, Sprint customers previously paid $180 a month.

The new pricing, announced separately by the companies Thursday, underscore an industrywide push to sign on heavy-spending — and heavy-using — data customers to monthly service plans as the U.S. wireless market matures.

The new competition for unlimited data plans is a threat to Verizon Communications Inc. and AT&T Inc.'s sales growth since both carriers rely on upgrading customers to higher-priced plans, said Walt Piecyk, an analyst with BTIG LLC. It's "going to be hard for them to respond to unlimited offers without straining their networks," he said. T-Mobile and Sprint, with smaller customer bases, are betting their networks can handle the surge in traffic.

T-Mobile surpassed Sprint as the third-largest U.S. wireless carrier last year by reducing rates for family plans, removing extra charges for exceeding data plans and offering rolling credit for unused data and popular promotions like free streaming of music and video.