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T-Mobile nixes overage fees, challenges competitors to follow suit

(Business News) T-Mobile’s CEO has written a scathing challenge against competitors, urging them to curb their greed and follow his lead by abolishing overage fees.

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T-Mobile makes a big move

Shopping for a phone carrier or comparing notes with your carrier’s competitors? T-Mobile is making a big move that could cause waves in the industry, filled with “me too!” screams in a competitive sector. The company has announced they will no longer charge overage fees, and wrote a public letter to challenge the rest of the industry to follow suit.

Beginning in May, overage fees will disappear, including domestic voice services, text, and even data for all consumer plans – changes will appear on customers’ June bills.

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Instead of charging overage, consumers will have the option to pay for more access through day-long or week-long data passes, should they choose, rather than automatically be billed for any use beyond the limits of their plans.

Throwing down the gauntlet

“Today I’m laying down a challenge to AT&T, Verizon and Sprint to join T-Mobile in ending these outrageous overage penalties for all consumers – because it’s the right thing to do,” said John Legere, president and CEO of T-Mobile. “Overage fees are flat out wrong. Agree with me? Join me in putting this challenge to all the major national carriers by signing my petition on Change.org. Right here. Take one minute to be a part of this consumer movement.”

“Charging overage fees is a greedy, predatory practice that needs to go,” continued Legere. “Starting in May for bills arriving in June – regardless of whether you’re on Simple Choice, Simple Starter or an older plan, we’re abolishing overages for good. Period.”

Hashtags and conflicting acts at T-Mobile

Last year, the company did away with annual service contracts and phased out overage charges for their “Simple Choice” users, taking a stand against abusive service contracts. They say that T-Mobile is now “taking on the even more unpopular and unjustified practice of slamming consumers with surprise bills in the form of overages charges,” estimating that consumers pay over $1 billion yearly in overage charges. They’ve even launched the #AbolishOverages hashtag, asking consumers to pressure other carriers to follow suit.

For consumers the company is taking an advocacy position, but is still making moves that conflict with their pro-consumer public relations campaigns, namely the abolishing employee and college student discounts, which was met with uproar, so they restored the discounts to current customers, still removing them for future customers.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

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2 Comments

2 Comments

  1. DavidFR

    April 22, 2014 at 1:42 am

    More than 75K has put their signature on the site… People are really get out of this horrible overages………………telecomvibe(dot)com

  2. Pingback: T-Mobile's newest marketing ploy has them in bed with the 55+ crowd - The American Genius

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Business News

What small business owners can learn from Starbucks’ new D&I strategy

(BUSINESS) Diversity and inclusion have been at the forefront of Starbucks’ mission, but now they’re shifting strategy. What can we learn from it?

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Hands of all different skin colors on green background representing Starbucks' D&I.

Starbucks was one of many companies that promised to focus on diversity and inclusion efforts after the death of George Floyd by Minneapolis police in 2020. What sets Starbucks apart from other companies were its specific goals.

How It Started

They began with hiring targets and have now added goals in corporate and manufacturing roles. Starbucks’ plans and goals revolve around transparency for accountability. They released the annual numbers for 2021 as a way to help hold themselves accountable. The data they’ve released so far show that they’ve met nearly a third of their 2025 goals according to Retail Brew. Because of this information, we can see why they are choosing to move in the direction of manufacturing and corporate jobs. In 2021, POC’s fell to 12.5% of director-level employees from 14.3% in 2020 in manufacturing.

How It’s Going

Per Starbucks’ website stories and news, “[I]t will increase its annual spend with diverse suppliers to $1.5 billion by 2030.  As part of this commitment, Starbucks will partner with other organizations to develop and grow supplier diversity excellence globally.” To put that into perspective, they spent nearly $800 million with diverse suppliers in 2021. With these moves, by 2030, it will increase by almost double.

As part of their accountability and progress, they plan to partner up with Arizona State University to give out free toolkits to entrepreneurs on fundamentals for running successful diverse-owned businesses. Another goal they’ve listed is to boost paid media representation by allocating 15 percent of the advertising budget to minority-owned and targeted media companies to reach diverse audiences.

At the heart of all this information on their goals and future plans, data transparency and accountability are what’s forcing them to look at the numbers to make specific goals. They are doing more than just throwing money at the problem, they are analyzing how they can do better and where the money will make a difference. Something that, as entrepreneurs, we should all do.

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Business News

Peloton is back-pedaling: Reports of price increases, layoffs, and cost cuts

(BUSINESS) After a recording of layoffs leaks, ‘supply chain’ issues cause shipping increases, and they consult for cost-cutting, Peloton is doomed.

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Man riding Peloton bike with instructor pointing encouragingly during workout.

Is Peloton in Trouble?

According to many reports, Peloton had success early in the pandemic when gyms shut down. Offering consumers a way to connect with a community for fitness along with varying financing options allowed the company to see growth when many other industries were being shuttered.

After two years, CNBC reports that the company is “being impacted by …supply chain challenges” and rising inflation costs. According to the report, customers will be paying an additional $250 for its bike and $350 for its tread for delivery and setup.

As demand has decreased, Peloton is also considering layoffs in their sales and marketing departments, overheard in a leaked audio call. The recording details executives discussing “Project Fuel” where they plan to cut 41% of the sales and marketing teams, as well as letting go of eCommerce employees and frontline workers at 15 retail stores.

Nasdaq reported that the stock fell 75% last year, after a year where it soared over 400%.

Peloton reviewing its overall structure

According to another report from CNBC, Peloton is working with McKinsey & Company, a management consulting firm, to lower costs as revenue has dropped and the growth of new subscriptions has slowed since the pandemic. Last November, according to NPR, Peloton had “its worst day as a publicly-traded company.” It also anticipates greater losses in 2022 than originally predicted. It makes sense that the company would reexamine their strategy as the economy changes. They aren’t the only one that is raising prices amid supply chain issues.

It will be interesting to watch how Peloton fares

Peloton has a large community that pays a monthly fee for connected fitness. While growth has slowed, the company still has a strong share of consumers. Although it is facing more competition in the home fitness market and more gyms are reopening, as Peloton adjusts to the new normal, it should remain a viable company.

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Business News

CEO is offering folks thousands to *quit* their jobs, with one catch

(BUSINESS) A CEO out of Arizona is challenging employment norms by offering a sort of “sign-off” bonus upfront, but this method has one fatal flaw.

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Man counting cash in his hand representing the CEO offering money to employees who quit.

Chris Ronzio, the CEO of Trainual, a software company in Arizona that aims to systemize and scale your small business, is offering cold hard cash to quit your job in an unconventional ploy to bypass the effects of the Great Resignation.

Before you rush to turn in your notice and make some extra cash, you should know that this offer is dependent on being selected as a hirable candidate and making it through the hiring process for Trainual. This option is also offered to new hires after 2 weeks of employment.

This model of employment gives the employee the ability to fire the company and walk away with a little sum of money. The thought process of the CEO was outlined in an article by the Insider, saying it is a strategic move to retain top talent and maintain a strong company culture. While this is a unique approach…it has a glaring flaw. The offer is only good for the initial two-week period. However, it can take some time to recognize the shortcomings of any company when you begin employment. We can all recognize the long-term financial potential of reoccurring income and while $5,000 is not anything to shake your finger at, it will eventually be gone. I think we can all agree that constructive criticism can be difficult to swallow at times, however, if Trainual was truly invested in this model they would extend the offer at other key times during employment. What if this offer was again available at the 1-year mark? If the offer reappeared at a one-year review, the turnover may increase.

Per the Insider article, Ronzio was quoted as saying, “With today’s market, hiring teams have to move quickly to assess candidates and get them through the process to a competitive offer, so it’s impossible to be right 100% of the time,” Ronzio said. The CEO added, “The offer to quit allows the dust to settle from a speedy process and let the new team member throw a red flag if they’re feeling anything but excited.”

These statements detail another dimension to consider which is the employment hiring process and timeline. If top candidates are in such high demand that the process has to be sped up to secure a workforce, this monetary compensation can help to ensure the hiring decision. Although, when the offer was implemented in May of 2020, the offer was $2500, half of what it is now. Ronzio reasoned that they could stay while they looked for another job so they increased the amount to compensate for those with a higher salary range.

Let me preface this by saying that yes, accountability should exist, but I would be interested to know the turnover rate for the hiring team. The cost to the company from this unique approach adds extra weight for those making the decisions on who to hire. The stress the hiring team faces has to be factored into the candidate decisions. How many times can the hiring team get it wrong before they’re let go? While the pressure to hire the right candidate should always factor in, one has to wonder about the effects of this model.

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