Gloves Are Off! AT&T Pitch To T-Mobile Customers, “Switch & We’ll Pay You $450”
On Friday January 3, AT&T announced that it will pay up to $450 to T-Mobile customers ($200 per phone line, plus $250 when they trade in their current smartphones) if they switch providers. This is the latest in the fight between these two wireless competitors who back in 2011 made a $39 billion deal to “get into bed with each other”.
AT&T pulled the plug on the merger once it became clear that regulators, i.e. the U.S. Department of Justice and the Federal Communications Commission, were opposed to the deal. AT&T also had to pay T-Mobile up to $4billion USD in fees once they decided to end their quest to acquire T-Mobile.
Ever since the merger went south, T-Mobile has worked hard to challenge the competition and lure their customers away from them. First, in 2012, it hired CEO John Legere who is no stranger to trash talking the competition on social media. Secondly, in 2013 it completely turned the industry on its head by doing three things. It started by wiping out contractual agreements for phone plans so that customers and small business owners do not have to sign a 2-year contract to get a good deal on brand new phones in the marketplace. Then, it made it cheaper for customers to take a smartphone abroad by eliminating roaming fees and pay per minute text charges. And, finally, it announced the “Jump Program”, an early upgrade program that allows customers to upgrade twice a year. These initiatives are all part of T-Mobile’s ”Un-carrier” marketing strategy to solidify and expand its footprint in the wireless communications industry. Recent quarter earnings for T-Mobile prove just how successful their strategy has been for their bottom line. According to T-Mobile’s financial reports, the company closed out the second quarter of 2013 with a total of 44 million customers, an increase of more than 10 million customers from the prior quarter’s figures, of which more than a million were new-new acquisitions.