T-Mobile Reportedly To Limit Abusers, Explains Rejecting Illiad Bid
“A very small number of our customers are misusing their Simple Choice Unlimited data service in violation of their rate plan and terms and conditions by bypassing the default tethering feature or engaging in peer-to-peer (P2P) file-sharing.”
Read More: 8 Stocks George Soros Is Buying in 2014
The fourth place U.S. cellular provider plans to give the abusers fair warning. The carrier says it will be reach out to the offending customers “to educate them," but if the misuse continues, "they could have their data speeds reduced for the remainder of their (monthly) billing cycle."
By implementing the new policy, T-Mobile joins competitors Verizon
T-Mobile shares were off 0.38% to $29.03 in midday trading in New York.
No actual data limit threshold was disclosed, and the company will judge abusers on a case-by-case basis. Those affected by the new policy will be subscribers to the company’s $80 per month Simple choice plan, or those grandfathered into the older $70 per month unlimited plan. T-Mobile already throttles its other customers subscribed to data plans with lower monthly limits.
T-Mobile announced second quarter earnings, last month, with the company reporting it has added 1.5 million new customers which translated into a net income of $391 million, or 49 cents per share. In the second quarter, T-Mobile had announced a loss of $16 million, or 2 cents per share. Quarterly revenue rose 15.4 percent to $7.2 billion, beating estimates of $7 billion.
T-Mobile has recently been the target of a pair of highly publicized takeover offers. It rejected the long-rumored buyout bid from Sprint and its owner Japan's SoftBank Corp. Sprint’s CEO Dan Hesse resigned after the deal was rejected.
T-Mobile’s parent company, Detutsche Telekom also turned down a $15 billion offer from Paris-based Illiad for nearly 57% of the T-Mobile US business. Earlier this week, T-Mobile’s Chief Financial Officer, Braxton Carterf called Illiad’s bid “very inadequate” but expects we might soon hear of additional offers from its French suitor. Reuters, quoting a person close to Iliad, reported Illiad was weighing whether to improve its $33 per share bid for T-Mobile US.