Earlier today, AT&T announced that it will now pay up to $450 to T-Mobile customers willing to switch over to an AT&T plan. The deal included $200 per line for the switch and up to $250 for a traded-in smartphone, depending on the phone model.
The move was a tacit admission that T-Mobile has been syphoning off subscribers from AT&T. Where T-Mobile added one million new customers during its previous quarter, AT&T added fewer than 370,000 new subscribers during its third quarter. All this in a U.S. mobile environment where new customers are becoming very rare.
T-Mobile has now responded to AT&T’s switch payouts, and it isn’t impressed.
T-Mobile CEO John Legere today issued an executive statement calling AT&T’s new deal “desperate” and implying that the payments amount to bribery. The statement, in full:
This is a desperate move by AT&T on the heels of what must have been a terrible Q4 and holiday for them. I’m flattered that we have made them so uncomfortable! We used AT&T’s cash to build a far superior network and added Un-carrier moves to take tons of their customers – and now they want to bribe them back! Consumers won’t be fooled…nothing has changed; customers will still feel the same old pain that AT&T is famous for. Just wait until CES to hear what pain points we are eliminating next. The competition is going to be toast!
-John Legere, CEO of T-Mobile USA
The money of AT&T’s that Legere refers to is the estimated $4 billion payment T-Mobile’s parent company received as termination fee for the proposed merger of AT&T and T-Mobile. The deal fell apart in 2011 after the U.S. Justice Department successfully opposed the deal on antitrust grounds.
Legere’s confidence is clear, and not entirely unjustified given the successful 2013 that T-Mobile had. If the company’s announcements at next week’s CES show really are as big as Legere seems to believe, U.S. wireless customers are in for another year of competitive initiatives from mobile providers.