On Wednesday, T-Mobile announced an aggressive campaign to buy back customers that AT&T and other carriers might have stolen from them, by offering $650 to get their old customers to switch back to them. The offer of the $650 is good for anyone elses who is with another carrier, and would like to switch to T-Mobile, as well.
T-Mobile had a terrific 2013, adding a total of 4.4 million customers. This marked their biggest increase in customers in eight years. The strategy is a part of T-Mobile’s attempt to “upend” the mobile industry. Though only in place for eight months so far, the company’s rapid rate of growth shows that the strategy appears to be working.
Gaining an additional 1.6 million new subscribers in the fourth quarter of last year, T-Mobile now enjoys a customer base of almost 47 million consumers.
AT&T had made the bold move recently, one that’s still in effect, of offering T-Mobile customers $450 to leave them and go over to AT&T. The offer by T-Mobile of $650 is an even bolder counter-move designed to thwart AT&T and gain further customers from all of their competitors in the burgeoning telecommunications marketplace. It’s also their latest in an ongoing series of efforts to kill existing contracts consumers had with other carriers, and put more power into the hands of potential customers.
According to T-Mobile’s CEO John Legere at the Consumer Electronics Show (CES) in Las Vegas, T-Mobile “will become famous for this in 2014.” He added that the new strategy of T-Mobile will provide customers more choices, and will make the telecommunications industry “healthier.” Legere also said that early termination fees were a “part of the overall industry scam.”
Legere stated that the offer is an indefinite one, that it “is here to stay.”
The offer is really not that T-Mobile will pay you $650 automatically. Any money up to that amount is to pay any existing contract cancellation costs to switch from some other carrier to T-Mobile. The maximum per line that the offer covers is $350, and T-Mobile will also offer new customers up to $300 per phone.
Under the conditions of the deal, you can’t keep your old phone or old phone number. You’ll have to purchase a new phone from T-Mobile, who will also give you a new phone number.
T-Mobile, the nation’s fourth largest carrier, is requesting new customers they get using this incentive of $650 to go to T-Mobile.com/break-up and write their old mobile carrier a break-up letter there.
Also at CES, Mike Sievert, the chief marketing officer of T-Mobile, stated that the offer is “not a bribe.” Continuing, he stated that a family of four who had T-Mobile’s unconditional data plan would have a savings in just two years of $1,800. Sievert noted that saving that much money could be an important economic benefit to their customers.
T-Mobile’s Chief Technology Officer, Neville Ray, touted T-Mobile’s increase in speed and stated that, in some cases, T-Mobile had a faster network than AT&T, who claims to have the fastest one. According to Ray at CES, his company would “level the playing field.”
The offer of giving customers who switch to T-Mobile up to $650 will begin on January 9, 2014. The payment will take the form of customers being paid an instant credit of up to $300 (depending on the value of the phone you give them) when you switch to their Simple Choice Plan. Whichever phone you select of the ones they offer won’t cost anything initially to well-qualified customers. The cost will be deferred over the course of 24 monthly payments. Only “well-qualified” customers are eligible for this offer.
In addition, T-Mobile will mail you money to cover the termination costs you incur from your old carrier. This would amount to up to $350 for each line. Besides these conditions and steps you’d have to take to comply with this offer, you need to mail or upload T-Mobile your final bill from your previous carrier to give them proof of how much the termination fees were.
How much of that $650 will you actually see?
Considering that the early termination fees of most telecommunications carriers are more than $350, it may be that you see very little, if any, of the $650. It might cover the entire costs of your switching over to T-Mobile, and you’ll get a new phone and phone number out of the deal (which you have two years to pay for), but you might not get a chance to actually see and hold any of the $650. Remember the key words of “up to.”
T-Mobile dropped their service contracts and early termination fees in 2013. Currently, T-Mobile customers purchase their phones on installment plans. Instead of a long-term contract, customers pay month to month. Cancelling the service means that you have to pay the balance of what you owe for the phone you’re buying from them.
T-Mobile is offering $650 for consumers who will switch over to them, so if you wondered when the time might be right to make a switch to another telecommunications company, this might be the time for you to do it. Legere claims that, although T-Mobile has lost some customers to AT&T because of their offer to pay people who switch to them $450, T-Mobile is gaining two customers from AT&T for every one they’ve lost. Legere also said that T-Mobile is, in Verizon’s case, attracting 1.3 customers from them for every one lost.
Written by: Douglas Cobb