At first, T-Mobile's "UnCarrier" initiative was designed to inject some attitude into the company's stodgy public image. But as the company continues to roll out new initiatives, it's forcing Verizon, AT&T and Sprint to compromise their own strategies in order to play catch-up. Which is terrific for consumers no matter how you look at it.
Operation UnCarrier entered its fourth phase on Wednesday as T-Mobile announced it will pay individuals and families who are willing to dump AT&T, Verizon, or Sprint for its service. T-Mobile will pay up to $300 for their old devices, and the company will also pay off customers’ final bills and early termination fees from their previous carriers, up to $350 per line, in the form of a prepaid MasterCard.
“We’re giving families a ‘Get Out of Jail Free Card',” John Legere, president and CEO of T-Mobile, said in a press release. “Carriers have counted on staggered contract end dates and hefty early termination fees to keep people bound to them forever. But now families can switch to T-Mobile without paying a single red cent to leave them behind.”
Trendsetting As A Defensive Strategy
Legere’s boldness has driven a massive reversal in T-Mobile’s fortunes over the last 16 months. Since Legere assumed the magenta throne in September 2012, T-Mobile has become the upstart of the U.S. telecommunications scene, killing off the traditional two-year wireless contract last March (UnCarrier 1.0), introducing the ability to upgrade devices twice a year last July (UnCarrier 2.0), and finally killing off roaming fees in October (UnCarrier 3.0).
The plan seems to be paying off for Big Pink. Citing a study by Baird Equity, Legere said more potential switchers are considering T-Mobile than any other wireless company, and the company claimed more than 1.6 million new customers this past quarter. In the same quarter last year, T-Mobile lost 32,000 customers. Not a bad turnaround for a company that was almost acquired by AT&T in late 2011.
Consumers are clearly paying attention to T-Mobile’s consumer-friendly improvements. But so are the other carriers.
After T-Mobile introduced its twice-a-year upgrade plan last July, AT&T and Verizon only needed a month to introduce and institute their own efforts—Next and Edge, respectively. Then, when rumors of T-Mobile’s plan to pay customers’ early termination fees surfaced over the holidays, AT&T on January 3 said it will offer any new customers who switch from T-Mobile a $200 credit per phone line and the chance to trade in their smartphones for up to $250.
The offers from AT&T and Verizon aren’t quite as good as T-Mobile’s, but they're better than nothing. And that’s exactly what T-Mobile wanted all along: To force the hands of the other carriers, despite technically being less popular than the other three major carriers when it comes to smartphone sales.
As T-Mobile continues to evolve its own business strategy—and improve its wireless spectrum—customers across all carriers will enjoy the effects of increased competition in the telecommunications space. But T-Mobile’s latest chapter in its UnCarrier initiative may be its most fruitful yet. According to Nielsen Mobile Insights, up to 40 percent of families hold back from switching carriers because of high early termination fees. An online poll from GigaOM showed how 78% of respondents would switch to T-Mobile if their early termination fee was paid off.
“We are either going to take over this whole industry, or these bastards will change and we’ll still be wildly successful,” Legere said (via The Verge). “I’m going to love watching the peckers scream.”
Images courtesy of T-Mobile