T-Mobile’s chief financial officer, Braxton Carter, recently announced intent to end the company’s voluntary participation in the Lifeline program, a government-subsidized program that provides low-income customers with vastly discounted basic phone service. Carter called the program “non-sustainable”, saying that the requirements for providing the voice and data services entailed in the terms of Lifeline service outweigh the potential profits. He indicated that the business is not sustainable in its current form, but pending changes from the FCC may have also played a role in the decision. One such change is a bump up from a mandatory 500MB minimum data service per month with Lifeline benefits to 2GB. Carter did not announce when or how the company plans to pull out of the government program and cease the service.
T-Mobile has announced that it plans to drop Lifeline before, but has gotten back onto the program. Its role in the Lifeline service network currently entails roughly 4.4 million subscribers, but a limited amount of those are actually enrolled through T-Mobile. Many Lifeline participant entities, such as TracFone, get voice and data service from T-Mobile at discounted rates. For its own part, T-Mobile offers lifeline assistance for as little as $19.99 per month, and allows users to apply a government subsidy that can push the price down by up to $13.50 per month, leaving users to pay only $5.50 per month for unlimited voice calls within T-Mobile’s terms and conditions for the service, along with data. There are additional discounts available for certain groups, such as Native Americans living on certified tribal land.
The Lifeline program was previously administrated on a federal level, but was recently put back into the hands of the individual states by the FCC. T-Mobile offers Lifeline assistance in Florida, Kentucky, Minnesota, Mississippi, New Mexico, Texas, Virginia, and Washington. Benefits are offered with additional terms in Puerto Rico. T-Mobile is far from the only wireless player to distance itself from the Lifeline program; AT&T is one of the biggest players to have done the same, and many smaller carriers are unable to offer the service at all due to the egregious imbalance between cost and profit, meaning that having Lifeline service would cut into their bottom line. Verizon is also on that list, along with FairPoint and Frontier.