T-Mobile U.S. Inc. has decided to enter a direct competition with Sprint Corp. in order to “steal” each others customers after only a few weeks ago the two companies were considering a merger.
The Chief Executive Officer of the company – Mr. John Legere said in the companys announcement, which was cited by Bloomberg: “It continues to amaze me to see the old carriers failing to listen to their customers, or reward them for their loyalty. That arrogance and indifference has defined the U.S. wireless industry for too long. We’re changing that.”
The company shared in a statement that it has begun a campaign of enlisting its own subscribers to recruit new ones. Through its new refer-a-friend campaign, T-Mobile is trying to differentiate itself from rival carriers by offering deals to its existing customers in addition to the incentives to new ones.
The campaign will encourage its own customers to refer new ones, and as a reward, both will receive unlimited LTE data for a year completely free. Customers already on unlimited plans will get a $10 credit for 12 months. A bonus of $25 to spend at the companys network will also be given to T-Mobile subscribers for each new referral.
The companys major competitor – Sprint Corp. – fought back by offering unlimited data, calling and messaging services at the price of $60 a month. The offering enters a direct competition with a similar service package provided by T-Mobile, which however costs additional $20.
The rivalry between the two companies has become more fierce than ever, even though the two carriers were still in merger negotiations a couple of weeks ago before Sprint Corp. walked away due to regulatory resistance.
Jeff Hallock, Sprint’s chief marketing officer, said, cited by Bloomberg: “This is a simple, straightforward, affordable plan,” referring to Sprints new offer. “There’s no gimmicks to this, it’s not a promotion, there are no hoops to jump through like T-Mobile’s where you have to figure out how to refer others.”
Apart from its new offer targeting both existing and new users, Sprint is also seeking to steal market share by offering to pay up to $350 when a customer switches from a rival carrier. During the last four quarters, Sprint lost about 1.2 million postpaid subscribers, while T-Mobile added about 3.8 million after experiencing years of declines in its user base.
T-Mobile U.S. Inc. fell by 0.48% on Friday to close the trading session in New York at $29.02 per share, marking a one-year change of +21.47%. The wireless carrier is valued at $23.54 billion. According to CNN Money, the 18 analysts offering 12-month price forecasts for T-Mobile US Inc have a median target of $37.00, with a high estimate of $45.00 and a low estimate of $30.00. The median estimate represents a +27.50% increase from the last price of $29.02.
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