On Friday AT&T began offering a new deal to win customers from T-Mobile: up to $450 if they switch carriers and trade in their handset. This evening in a statement T-Mobile CEO John Legere called the new AT&T plan "a desperate move" and even taunted the company, explaining how T-Mobile spent AT&T's cash that AT&T ultimately had for forfeit after the federal government stopped a merger between the two companies in 2011.
The full statement follows:
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!
T-Mobile aggressively sought to win new customers in 2013 by positioning itself as the "Uncarrier," doing away with long-term contracts and cell phone subsidies. By the end of the year the new strategy appeared to be working, with T-Mobile reversing quarterly losses and adding new customers.
Legere comment about what will happen at next week's Consumer Electronics Show (CES) in Las Vegas is a tease; he offered no details, so we'll have to wait until next week to find out more. But if TmoNews is any indication, it may be another compelling monetary incentive for customers looking for greener pastures. The blog recently reported that T-Mobile plans to offer up to $350 credit to customers who break their contracts with other carriers, partly by offering to pay their early termination fees.
T-Mobile parent company Deutsche Telekom is rumored to be in talks with Softbank-owned Sprint and possible also Dish Network for acquisition of T-Mobile, the nation's fourth-largest wireless carrier. Either way, it's unlikely that there will be any news on that front until spring. Regardless of those plans, it's good to see T-Mobile staying scrappy and continuing to do its part to disrupt the American wireless market, which has been in desperate need of a shakeup.
Reader comments
T-Mobile CEO calls AT&T deal "desperate," promises big CES news
They're going to pay the ETF so you could switch? That's what I call desperate.
Wow! This is going to be interesting to see how this develops.
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Great article. If not for T-Mobile the US Carriers would be following their same game plan. At least T-Mobile has forced the US Carriers to change their strategy. Thank You T-Mobile.
Not planning on switching... Unless there is something turkey worth the switch. I respect tmo for shaking things up, and if their network would cover what AT&T does with the same reliability and speed, I'd be there in a heartbeat!!! Until then, it doesn't matter much what tmo has to say since I'm locked in on Att.
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T-Mobile would be great if you know, they actually had good coverage. While it various greatly depending on where you live, my experience with T-Mobile coverage was depressing. Any residential place I went to there was usually 0 coverage. While I could go to a plaza and have 5 bars LTE, at home and at other peoples home I had absolutely no coverage. When I contacted T-Mobile, they would say, well our maps show you should be getting excellent LTE/4G coverage. But I wasn't. So I ended up switching back to AT&T, which at the end of the day is $20 more, but at least I have coverage. At home I have 3 bars of LTE. Plus the LTE is faster then the LTE coverage I had with T-Mobile (the few times I had any).
While just recently, Sprint also made a sizeable offer to buy up TMO. It's laughable that Sprint is SOOOOO far behind on their LTE coverage, and a lot of their 4g is still based on WiMax technology.
Sprint actually hasn't.
The rumor is that Softbank, which owns the bulk of Sprint, is putting together an offer for T-Mobile that it plans to submit in the spring. But there still aren't any hard details.
I don't understand why they are only going after AT&T. Verizon is way worse than AT&T in terms of contract lock ins and monthly cost. I'm on the new mobile share where I don't have a contract and my plan isn't much more than what it would be at T-Mobile and I get way better service and speed. Why don't they go after Verizon more, or how about sprint? I be Tmobile has better coverage than their horrible network and horrible customer service.
We don't know the specifics of T-Mobile's CES plans, so it's premature to assume they're only going after AT&T. But Legere's comments are a direct result of AT&T's focus on T-Mobile. So I you should be asking the reverse question - why is AT&T making such a concerted effort to woo away T-Mobile customers, when they could be going after #3 Sprint or #1 Verizon?
True, but ever since T-Mobil starter this un-carrier campaign it's mainly been aimed at AT&T. Whenever I read any news about T-Mobile or when they change something, their comments are always aimed at AT&T. Don't get me wrong, I love what they are doing, because of it my plan is cheaper than before. I just never see Legere going after Verizon or Sprint whenever he's on a rampage!
I will say one thing about T-Mobile's CEO he is not afraid to speak his mind and call out the other big boys on their lackluster offerings. If only t-mobile was as stable and consistent as att then they would have something to brag about. They are however getting there and in a few years they are really going to be a force to reckon with if they dont get bought first.
AT&T has 106 million customers and T-Mobile has 33 million. I don't think AT&T is desperate. I think their just tired of T-Mobile going after them all the time and this is their way of responding. I like it. Whatever benefits the consumer. And carriers fighting each other benefits us.
I left AT&T grandfathered unlimited because they throttled data and asked money to tether. With T to the Mo, I have unlimited data, free tethering, and simultaneous use of surfing and calls. It's da shiet
No amount of $$$ or incentives could get me to use T-Mobile. It is absolutely dreadful in my area. (Ditto Sprint.) Just switched from Verizon to AT&T and couldn't be happier so far.
AT&t has done things like this before. Way before smartphones. I left their service. They offered me $100 check to come back to their long distant service. This was in the late 80's.
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It's the biggest crock of donkey dung of an offer. It's not realistic and I very much doubt that people will get all $450 except when their device is perfect and top of the range and even then that offer is a combination of $200 of the cost of the ETF and $250 towards spending on a device. T-Mobile don't have an ETF though, they merely give an interest free loan for 2 years and that covers the cost of the device and the monthly payment is 1/24th of that phone cost plus sales tax etc. So the customer is very likely only getting half the cost of ending their commitment with T-Mobile.
Then of course, read somewhere that you have to let them have your T-Mobile device. So they are buying your device for that $250. That's hardly a deal. When I ended my Verizon Contract my ETF was $220 and I got to keep my iPhone. I sold it through Gazelle for $294 (even though I could have gotten far more selling it on eBay albeit with more hassle).
I also didn't have to pay activation fee for T-Mobile Service, I get better service, unlimited Data, unlimited Text and unlimited voice and it includes 2.5Gb hotspot data (that I used to pay an extra $25 a month for from Verizon). I pay $10 a month less for my service at just $74 a month vs $84 a month (rounding both figures).
Of course, I am sure that their offer is, since it is about 'coming back' only open to people that quit AT&T to go to T-Mobile. So it implies that the devices have a fair part of that loan outstanding.
For AT&T it is Winner Winner Chicken Dinner. For their 'returning customers' it is just a losing proposition.