Why T-Mobile Is Rebranding MetroPCS to ‘Metro by T-Mobile’
More than five years after T-Mobile’s super-successful acquisition of MetroPCS, the carrier is overhauling its branding and market positioning to attract more customers.
MetroPCS, which had largely kept its separate identity after being acquired, focuses on the so-called prepaid segment of the wireless market, requiring customers to pay up-front every month and typically targeting people with weak or no credit histories and lower incomes. Since T-Mobile bought the unit, its subscriber base has more than doubled to 18 million as the brand spread from just 12 markets to about 100 nationwide currently.
Now T-Mobile (TMUS) wants to make big changes. Starting in October, MetroPCS will be renamed “Metro by T-Mobile” and will add enhanced unlimited data plans in an effort to appeal to a broader customer audience. New advertising will emphasize that its service runs on the same wireless network as T-Mobile. And aligning itself with several other popular brands, both of Metro’s new unlimited plans will include at no additional cost cloud storage from Google’s Google One program and one plan will also include Amazon Prime, the e-commerce giant’s free delivery and video programming service.
The first new Metro plan will start at $50 for one line and run up to $140 for four lines and will include unlimited 4G LTE data for phones, 5 GB per month of tethered data for a connected laptop or tablet, and Google One. The second new plan starts at $60 for one line and goes up to $150 for four lines. It also gets unlimited 4G LTE phone data, 15 GB of tethering data, and includes both Google One and Amazon Prime. Both plans have the industry’s usual caveat of slowing download rates if customers use too much data in a month. Here the threshold is a generous 35 GB. And video streaming is downgraded to DVD-quality.
The new plan prices are set just above Metro’s existing limited data plans, which start at $30 and $40 for one line, and just below regular T-Mobile unlimited plans, which start at $70 for one line. Metro’s prior unlimited plans without the add-ons started at $50 for one line.
A new ad campaign will use the tagline “That’s Genius” and emphasize both that Metro’s service has wide, high-speed coverage thanks to T-Mobile and the links to Google (GOOGL) and Amazon (AMZN). That’s in synch with the rest of the wireless industry that is increasingly turning to bundling with popular online brands. AT&T (T) offers many wireless customers free HBO or its new WatchTV app; Sprint throws in Hulu subscriptions; and Verizon (VZ) grants a six month free trial to Apple Music. T-Mobile itself gives unlimited data customers Netflix (NFLX).
MetroPCS president Tom Keys, who joined the company in 2005, says the overhaul is a result of polling customers and discovering that many had a poor impression of his unit. Of the millions of people living within one and one-half miles of a store selling MetroPCs service, only about 30% either subscribed, had subscribed in the past, or would consider subscribing, while 70% excluded the brand from consideration completely. “We found a few problems, some that we had probably created,” Keys tells Fortune. “It’s never easy to look yourself in the mirror but it was helpful.”
The new aim is to escape the stigma of prepaid service and appeal to all kinds of customers, he says. Many consumers didn’t understand how prepaid service worked and other believed it was inherently worse than postpaid service, not realizing that MetroPCS ran on T-Mobile’s network. Changing the name, adding the new unlimited plans, and partnering with Google and Amazon is aimed at changing those views. “We think we can break that myth,” Keys says.
The overhaul has been in the works for about a year and isn’t connected to whether or not T-Mobile succeeds in merging with rival Sprint (S), Keys says. In a filing with the Federal Communications Commission last week, the two carriers pledged to continue offering Metro and Sprint’s two prepaid brands, Boost and Virgin, even after the merger.
“All that is still to come,” Keys says. “This move that we’re doing was not contemplated at all with the potential merger. This is just a standalone announcement.”
(This story was updated on September 24 to clarify that the new unlimited plans are the same price as prior unlimited plans.)