How T-Mobile Plans to Shake Up Wireless Industry

24/7 Wall St.

T-Mobile US Inc. (TMUS), which of late has been calling itself the "Uncarrier," has revealed its latest in a series of efforts to shake up the wireless industry: abolishing overage fees.

T-Mobile, the fourth-largest U.S. carrier, said Monday that, starting in May, it will eliminate domestic overage penalties for all customers on its consumer plans who go over their allotted voice minutes, data or text messages.

More than 20 million U.S. consumers were hit with overage charges last year, according to T-Mobile. "Charging overage fees is a greedy, predatory practice that needs to go," said CEO John Legere in a statement. "And I'm also laying down a challenge to my counterparts at AT&T, Verizon and Sprint, to do the same." His challenge includes a petition at Change.org.

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Last week, T-Mobile unveiled its $40 Simple Starter plan for people with basic phones or who use limited data. That was followed by the launch of a tablet plan that offers LTE tablets for the same price as Wi-Fi only models, along with free data plan add-ons for the rest of the year. Last year, T-Mobile did away with annual service contracts.

Competitors AT&T Inc. (NYSE: T), Sprint Corp. (NYSE: S) and Verizon Communications Inc. (VZ) have already made some changes in response to T-Mobile's Uncarrier efforts. Will they be willing to give up the $1 billion they take out of consumers' pockets every year by automatically charging their users overage penalties as well?

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