By Sarah Krouse and Drew FitzGerald
T-Mobile US Inc. opened a new front in the cellphone pricing wars, unveiling a monthly data plan that starts at $15 as the company responds to critics that its planned merger with Sprint Corp. will lessen competition.
The No. 3 carrier by subscribers said Thursday it would sell phone plans with 2 gigabytes of high-speed data for $15 a month, one of the lowest entry-level prices from a major U.S. provider, if its Sprint takeover is allowed to proceed. The company previously charged $30 for its lowest-cost unlimited plan.
A monthly allotment of 2GB is enough to support most online-browsing and social-media use, but below the data needed to support extended music and streaming-video binges. T-Mobile said it would gradually increase customers' data caps over time for five years.
AT&T Inc.'s prepaid Cricket service offers a similar 2GB plan for $30 a month. Sprint's Boost charges $35 a month for 3GB.
T-Mobile's proposed takeover of Sprint, the No. 4 provider, has secured approval from federal telecommunications and antitrust officials, but has been delayed by an antitrust suit brought by a coalition of state attorneys general.
The states, led by New York and California, worry the deal would stifle competition, especially in the market for prepaid mobile plans that tend to cost less. A trial is set for Dec. 9.
T-Mobile Chief Executive John Legere said he wrote to attorneys general Thursday morning, including New York's Letitia James, laying out the new pricing plan and other moves, and said he had met with several in recent weeks to hear their concerns.
"What's important to these states is exactly the things we're talking about," Mr. Legere said, adding that he was confident the Sprint deal would be able to progress after either a settlement or successful trial.
In addition to offering the $15 prepaid plan, T-Mobile said it would also offer free in-home internet for some low-income and rural households with children, as well as free wireless service to first responders. It plans to offer free internet to 10 million households with children, a move that amounts to a $10 billion commitment by the combined company. First responders will have access to free 5G wireless service for 10 years, T-Mobile said.
"This is something we could never do if the merger doesn't happen," T-Mobile operating chief Mike Sievert said.
T-Mobile and Sprint have tried to pick off individual states from the state-led lawsuit, successfully getting Colorado and Mississippi to drop out and support the transaction. Executives said they hope the new commitments would help spur more defections.
T-Mobile also said it would launch a 5G network that covers 200 million people on Dec. 6, three days before the case is scheduled to begin. Executives said T-Mobile won't charge more for 5G service.
Mr. Legere said the parties are discussing how to extend their deadline for the deal and didn't rule out the possibility of renegotiating its price. The deal's outside date passed Friday, which opened the door for either company to walk away.
While T-Mobile has been adding subscribers at a consistent clip, Sprint has continued to shed phone customers.
Shares in T-Mobile were up slightly at $82.19 at midday, while shares in Sprint were up 1.5% at $6.24.
Cellphone bills have marched downward for American households over the past year. In September, the consumer-price index for wireless phone service -- an indicator of current offers from providers -- fell 2.8% from a year earlier, the 13th straight month of declines, according to the Labor Department.
Verizon Communications Inc., the market leader, in August revamped its stable of unlimited data plans, shaving about $5 off customers' monthly bills. The move helped it attract more lucrative postpaid phone customers in the third quarter.
AT&T followed in November, overhauling its own lineup of unlimited plans and making most of them less expensive, while changing some streaming content perks. Its least-pricey plan, for example, now costs $5 less for one line.
Cable companies have also entered the market with low-cost wireless plans for their television and broadband customers. Comcast Corp. sells a wireless plan with 1 gigabyte of monthly data for $12 to its customers, while Altice USA sells an unlimited-data plan for $20 a month.
Carriers have also been offering free video services to woo or keep customers. T-Mobile gives free Netflix to most unlimited customers. Verizon will give unlimited customers a free year of Walt Disney Co.'s new streaming service. AT&T plans to give away its HBO Max to some wireless customers when it is launched next year.
Write to Sarah Krouse at firstname.lastname@example.org and Drew FitzGerald at email@example.com