T-Mobile Revamps Prepaid Brand To Spruce Up Image

T-Mobile US Inc (TMUS.O) said Monday it is renaming its prepaid brand to Metro by T-Mobile and adding two new unlimited phone plans that will include perks like Google One cloud storage and Amazon (AMZN.O) Prime, in an effort to remove the perception that prepaid plans have subpar service.

As the third-largest U.S. wireless carrier awaits regulatory approval for its $26 billion deal to buy smaller rival Sprint Corp (S.N), T-Mobile is blurring the lines between its brands to avoid regulators ordering T-Mobile to divest Metro as a condition to approve the merger, one analyst said.

T-Mobile is sweetening the former MetroPCS brand, which is aimed at budget-conscious users who pay upfront for wireless service, with access to the latest smartphone models and added perks that are usually associated with pricier service plans. Those are paid at the end of the month and often require a credit check.

“This makes Metro and T-Mobile more of a continuum rather than two distinct brands,” said Roger Entner, an analyst at Recon Analytics, in an interview.

Opponents of the merger have demanded T-Mobile divest some of its customers, pointing to T-Mobile and Sprint’s large combined market share of prepaid customers, which would be over 50 percent, according to data from Kagan, S&P Global Market Intelligence. Sprint owns prepaid brand Boost Mobile.

T-Mobile’s rebranding of MetroPCS is aimed at changing the perception of the business among people who equated prepaid with low quality, or did not realize MetroPCS operated on T-Mobile’s network, said Tom Keys, president of Metro by T-Mobile, in an interview.

Peter Adderton, founder of Boost Mobile, said the rebranding does not change the fact that prepaid and postpaid are different markets, and he called for regulators to evaluate the merger’s effect on them separately.

Adderton, who is no longer affiliated with Boost’s business in the United States, had previously called for the companies to divest some users and formal regulation to ensure that smaller wireless companies that operate off T-Mobile and Sprint’s networks could stay competitive.

Metro by T-Mobile’s top-tier unlimited plan will cost $60 for one line and include both Google One and Amazon Prime.

Reuters

Reporting by Sheila Dang; Editing by Cynthia Osterman