T-Mobile drops the price of its entry-level plan, selling 500 MB for $40

As T-Mobile(s tmus) continues to chip away at its larger rivals’ business, it’s starting to scale down to mobile data plan prices to attract more budget-minded smartphone users. On Saturday, it will introduce a new entry-level plan priced at $40 a month that offers 500 MBs of data as well unlimited voice and SMS.
This plan, called Simple Starter, is a bit different from its regular Simple Choice plans, which start at $50 a month. Instead of throttling data speeds back after customers hit their monthly data caps, T-Mobile is suspending data service after customers hit 500 MB in a billing cycle, restoring data access when a new billing cycle comes into effect.
T-Mobile simply starter rate plan
T-Mobile is positioning the plan as a way for cost-conscious consumers to avoid overage charges. Though T-Mobile technically doesn’t charge overages on any of its plans, Verizon(s vz) and AT&T(s t) will automatically tack another data bucket onto your bill once you hit your cap. That said, T-Mobile is also providing an option for customers to buy data a la carte if they’re stranded mid-billing cycle without a data connection: a one-day 500-MB plan costs $5 and a seven-day 1-GB plan costs $10.
Essentially if you’re a light data user, this plan make a lot of sense. You get full access to its LTE network and never worry about having your data speeds throttled. But if you’re creeping over 500 MB more than a couple of months of year, then it’s probably not worth your while. The cost of buying passes to maintain your service will obviate any cost savings over T-Mobile’s Simple Choice plans, unless you’re willing to restrict your mobile internet usage to Wi-Fi.
Simple Starter also doesn’t give customers access to T-Mobile’s new free international data roaming and texting benefits, substantial perks for anyone who travels overseas. It’s designed as a domestic only plan.
Still, it’s very interesting to see T-Mobile scale prices down — creating cheaper options for consumers — rather than just pile more data onto its existing plans, though its obviously restricting some features. We’re going to see more emerge from T-Mobile in the next few days as it tweaks its Un-carrier strategy. In a T-Mobile blog post, CEO John Legere said T-Mobile would be making a new announcement each day until Friday, so stay tuned.