“AT&T Inc on Friday offered customers of No.4 U.S. mobile provider T-Mobile U.S. Inc a $200 credit to switch to its service, firing the first volley in what may be a price war that benefits consumers but plays havoc with profits,” Sinead Carew reports for Reuters. “AT&T, the No.2 U.S. mobile provider, announced the promotion after months of direct marketing against it by T-Mobile, and in anticipation of a new competitive offer from its smaller rival on January 8.”
“The move might kick off a year of discounts from U.S. wireless operators, who are increasingly dependent on price to compete because they all offer similar phones and any network advantages are hard to prove,” Carew reports. “MoffettNathanson analyst Craig Moffett described AT&T’s move as the ‘early makings of a price war’ that might boost customer switching, also known as churn.”
“Wells Fargo analyst Jennifer Fritzsche said AT&T was likely reacting to speculation that T-Mobile’s January 8 offer could include a credit to customers switching from AT&T contracts that covered early contract-termination fees.,” Carew reports. “In an effort to steal T-Mobile’s 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 per line, which includes family plan customers. The per-line 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.”
Read more in the full article here.
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]