08/22/2012 12:02 am ET Updated Oct 21, 2012

T-Mobile's New Unlimited Plan Won't Trottle Data Speeds

NEW YORK (Reuters) - T-Mobile USA, the No. 4 U.S. mobile provider, will sell a new unlimited data service option to its customers for a monthly fee in a direct challenge to its bigger rival Sprint Nextel, the only other big U.S. provider selling unlimited services.

The offer may also help T-Mobile USA, a unit of Deutsche Telekom, stand out from the biggest U.S. operators Verizon Wireless and AT&T Inc, which have both set caps on their customers' monthly data usage.

Today T-Mobile USA, which has been losing customers to bigger and smaller rivals, limits its customers' data speeds after they have downloaded a certain amount of data each month.

But under the new plan, which is being launched on September 5, T-Mobile USA will allow customers unlimited data usage without any curb on their service speeds.

The T-Mobile USA announcement came a day after smaller rival MetroPCS Communications announced a promotional offer under which it will also offer unlimited data usage without throttling back speeds.

Customers opting for T-Mobile USA's unlimited data usage will add a $20 payment on top of their existing $49.99 a month fee, which covers unlimited phone calls and texts.

This compares with the company's existing $74.99 plan, which comes with unlimited talking and texting and a limit of 5 gigabytes of data.

(Deletes reference to limited data in describing $49.99 plan in 6th paragraph)

(Reporting By Sinead Carew; Editing by Bernard Orr)