T-Mobile US, Facebook Team Up in Wireless Access Deal - Wall Street Journal

T-Mobile US Inc. has teamed up with Facebook Inc. to offer users of its GoSmart Mobile service free wireless access to the social network, an arrangement that comes amid growing complaints about data prices.
The experiment comes as T-Mobile has been boosting its postpaid subscriber rolls to turn around a long-struggling business and gives Facebook wider reach to wireless users who wouldn’t otherwise have access to the social media site. The new arrangement applies to all users of GoSmart, a T-Mobile prepaid venture launched earlier this year, even those without a data plan.
The terms of the arrangement weren’t disclosed. An individual familiar with similar arrangements by Facebook said the company isn’t covering the cost of the data, but has helped out with marketing the promotion in past deals. For T-Mobile, the effort could give customers who haven’t been consuming data a taste of the service and potentially put them on the path to buying more mainstream access.
With rising use of streaming data, Internet companies have voiced frustration that the high cost of Internet data plans could inhibit use. But wireless phone companies have embraced the expanding mobile data traffic as a growing revenue stream.
Facebook Chief Executive Mark Zuckerberg earlier this year called for access to the Internet to be more affordable. “Even though projections show most people will get smartphones in the next decade, most people still won’t have data access because the cost of data remains much more expensive than the price of a smartphone,” Mr. Zuckerberg wrote.
Facebook began selling video advertisements last week for both its Web and smartphone interface, and in overseas markets, the social network has cut similar deals with wireless operators to provide free access to services. This is its first such arrangement in the U.S.
U.S. wireless carriers, meanwhile, are focusing their plans more toward data use as demand rises. Sprint Corp. and T-Mobile use their unlimited data offerings to try to snare new subscribers, while AT&T Inc. and Verizon Wireless have stopped offering unlimited data.
T-Mobile in particular has been vocal about the price of wireless service and marketed itself as the “uncarrier.” But AT&T and Verizon have the vast majority of wireless users, and their data rates could drive subscribers to become cautious about how they use the service.
Under this partnership, GoSmart customers will begin getting access to Facebook over the Web or the smartphone app beginning in January by logging in from their phones. The wireless service offers different levels of service starting at $25 a month for unlimited voice calls and ending at $45 a month for unlimited talking and texting, and 5 gigabytes of 3G data access.
For T-Mobile, having GoSmart partner with Facebook is peculiar. Its more prominent prepaid brand is MetroPCS, which had about 8.9 million subscribers when it was acquired in May, and the company also has a T-Mobile branded prepaid service.
It isn’t clear yet if the arrangement will spread to other T-Mobile brands. A spokeswoman for the carrier said the focus is on GoSmart and there has been no announcement about the future.
The company doesn’t break out GoSmart subscribers, but T-Mobile prepaid subscriber growth has been relatively flat since its launch in February after adjusting for its acquisition of MetroPCS Communications Inc. earlier this year.
Media companies are expected to begin arrangements that would let users consume content without being hit with higher charges, industry executives say. The carriers have expressed an openness to this model–which is similar to a 1-800 phone call because the content provider pays for the network access–but a major deal has yet to crystalize.
ESPN, the cable sports channel majority-owned by Walt Disney Co., has had discussions with at least one major U.S. carrier to subsidize wireless connectivity on behalf of its users, The Wall Street Journal reported earlier this year.
Amazon.com Inc. already pays AT&T for the wireless connectivity that allows it to deliver electronic books to people for free to Kindle readers.
–Ryan Knutson contributed to this article
Write to Thomas Gryta at [email protected] and Reed Albergotti at [email protected]

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