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AT&T Beats T-Mobile to Punch with ETF Payoffs

Fri, 01/03/2014 - 10:09am

An invite for T-Mobile's CES press eventAT&T today announced a new program that aims to snag customers from T-Mobile's clutches. Starting today, AT&T is offering T-Mobile customers incentives valued at up to $450 per line when they switch to AT&T and trade in an eligible smartphone. 

The move comes as rumors surfaced last week that T-Mobile plans to roll out a similar initiative at the upcoming Consumer Electronics Show in Las Vegas. According to multiple reports, T-Mobile is set to offer AT&T customers up to $350 to change their stripes to magenta. 

When asked whether the new promotion was indeed to preempt T-Mobile rumored announcement at CES, AT&T spokesman Mark Siegel Wireless cited the competitive nature of the wireless industry, saying a move like this “should not be unexpected.” 

“As you know, there are handset promotions all the time, to cite just one example.  We think this limited-time promotion will make it easy for TMO [sic.] customers to experience AT&T’s larger and more reliable 4G LTE network, a superior smartphone lineup, and award-winning customer service.  We think they’ll be interested in a $450 credit,” Siegel said in a statement. 

Siegel also said that the current promotion is targeted only at T-Mobile customers. 

T-Mobile, which has not confirmed specifics of its CES announcement, could not be reached for comment prior to press time. 

AT&T's program is a limited-time offer, during which T-Mobile customers who switch to AT&T can trade-in their current smartphone for a promotion card of up to $250. That money can be used toward AT&T products and services.  

AT&T said trade-in values will vary based on make, model and age of the smartphone, but many of the latest and most popular smartphones will qualify for a value of $250.  

T-Mobile customers can receive an additional $200 credit per line when they transfer their wireless service to AT&T and choose an AT&T Next plan, buy a device at full retail price or activate a device they currently own. 

The move signals the beginning of a new front in the war for wireless customers. Early Termination Fees (ETFs), which are built into wireless contracts to cover device subsidies, have long acted as a deterrent against customer churn. If carriers begin offering incentives that cover those fees, customers would be able to more easily switch to get a better deal on their contract.

As of this writing, AT&T had not announced plans to extend the offer to customers on other carriers. AT&T and T-Mobile have been butting heads since T-Mobile adopted its “uncarrier” strategy, which has specifically targeted AT&T in much of its messaging. 

That strategy has apparently been working. T-Mobile has chalked up nearly 1 million net subscriber additions in each of its last two quarters

Shares of T-Mobile were down over 3 percent to $32.19 early trading, while AT&T was down a little under a 1 percent to $34.68. 

 

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