AT&T Inc. said it will pay T-Mobile Inc. customers as much as $450 to switch to their services, in an unusual move as the competition for subscribers between the wireless rivals gets fierce.
T-Mobile has launched an assault on its larger rival under Chief Executive John Legere, who has taken aim at AT&T in television ads and in direct comments, some of them defined inappropriate for a public event. He also has put pressure on the company by eliminating lucrative carrier standbys such as contracts and high international roaming fees, while continuing to offer lower-cost unlimited data plans.
The strategy proved successful as it has already posted two quarters of subscriber growth after four years of losses as a result of the promotions and has been causing bigger rivals AT&T and Verizon Wireless some losses.
In an effort to steal T-Mobiles thunder, AT&T said that beginning on January 3, in a limited-time offer, T-Mobile customers who switch to AT&T will receive a $200 credit, which includes family plan customers.
The credit could be on top of another credit of up to $250 if the customer trades in their current smartphone. While it said trade-in values vary based on the model and age of the smartphone, many of the latest phones will qualify for the $250 credit.
AT&Ts offer, which is available only to T-Mobile customers, comes days before T-Mobile was widely expected to announce a similar offering.
“It has been in the works for a while, said Mark Siegel, an AT&T spokesman. “We think this is a very good way to offer T-Mobile customers who may have left us to persuade them to come back.”
The offer shows how the wireless market has changed into becoming more competitive and is no more ruled by market leaders Verizon Wireless and AT&T which enjoyed lucrative pricing plans and steadily rising revenue per user.
AT&Ts shares were down slightly Friday, while T-Mobiles fell more than 3%.
The 21 analysts, polled by CNN Money, offering 12-month price forecasts for AT&T Inc have a median target of 38.00, with a high estimate of 42.00 and a low estimate of 35.00. The median estimate represents a 9.20% increase from the last price of 34.80.
While, 17 analysts offering 12-month price forecasts for T-Mobile US Inc have a median target of 32.00, with a high estimate of 38.00 and a low estimate of 12.00. The median estimate represents a 0.87% decrease from the last price of 32.28.