Market Overview

T-Mobile's GoSmart Offers Free Facebook to All

T-Mobile's GoSmart Offers Free Facebook to All

In a move Bloomberg said was designed to hook pre-paid no frills cellular customers on using their phones for Internet access, T-Mobile (NYSE: TMUS) announced that beginning next month, GoSmart customers would have free access to Facebook (NASDAQ: FB) including Facebook Messenger, even if they don’t have data service or a smartphone.

In a statement, GoSmart Senior Vice President Doug Chartier said, "Once again, T-Mobile is shaking up the wireless industry by offering unlimited Facebook for GoSmart customers with no strings attached."

GoSmart, which debuted in March, offers low-cost no-contract plans that allow customers to bring their own compatible unlocked phones to T-Mobile. Plans are available as low as $25 a month with unlimited talk. For $30, texting can be added, and for $45, users get unlimited talk, text, and 5GB of 3G data.

Related: Is Dish About To Pounce On T-Mobile?       

By offering free Facebook access at the lowest price point, Bloomberg said, T-Mobile hoped to entice users to eventually upgrade to a data plan in order to gain access to even more features.

As for Facebook, its take away in this win-win scenario is a whole new universe of Facebookers who will sign on to the social media service and begin viewing ads – just like all those smartphone users out there.

In official terms, Facebook’s vice president of partnerships, Chris Daniels said, ”Facebook's mission is to give people the power to share and make the world more open and connected, and we're delighted that GoSmart subscribers, many who don't have data access, will be able to use Facebook for free."

The idea of free Facebook to non-data users is not new.

Facebook has worked with carriers outside the U.S. to bring free access to users who do not have data. The agreement with T-Mobile is the first time this tactic has been tried in the United States.

Starting in January the free service offering will extend to anything hosted on Facebook. If a link takes a user off the actual Facebook site, the user would need to have a data plan, according to T-Mobile’s vice president of partner brands, Gavin Dillon.

PC Magazine noted that T-Mobile’s new “Free Facebook” tactic comes at the same time rumors about a Sprint merger with the carrier were gaining traction. The latest rumors call for a potential $20 billion deal to take place sometime in the first half of 2014.

Also in the “merger rumor” mix, Dish Network which has made it abundantly clear it wants to expand its offerings.

At the time of this writing, Jim Probasco had no position in any mentioned securities.


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