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AT&T Is Out for T-Mobile's Blood


AT&T will undercut a T-Mobile turnover credit with one that targets T-Mobile customers.

When the Big Four mobile providers in this country hold as much power as they do, it's not often that we see any new pricing structure that benefits the consumer. But considering the huge lead Verizon (NASDAQ:VZ) and AT&T (NYSE:T) have over Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) in terms of subscribers and infrastructure, the impetus to lower rates and improve data speeds is much stronger for the latter two. Which is why we've seen T-Mobile really step up to deliver some compelling incentives for customers to switch over to Carrier Number Four.

And one deal that's rumored to debut next week at the Consumer Electronics Show in Las Vegas has raised AT&T's hackles.

Sources allege that T-Mobile will introduce a deal offering to pay the early termination fee of any customer who switches over to its network and turns in his or her existing device. The fee -- that creative penalty carriers charge members if they duck out of a one-year or two-year contract prematurely -- could cost upwards of $350 for some subscribers. If T-Mobile were to effectively eliminate that fee, it would be a fantastic deal by anyone's standards.

Of course, T-Mobile's coverage map is nowhere near that of Verizon's or AT&T's, leaving many customers in rural areas locked in with their current providers out of necessity. But for the millions of customers with a choice of carriers, that theoretical deal could lead to a sizable turnover.

And hoping to stem the tide of customers heading for the exits, AT&T will introduce a similar incentive for new customers that specifically targets current T-Mobile subscribers.

According to a new page on its official site, AT&T is planning to credit new customers if they switch to its network from T-Mobile -- and only T-Mobile. The new deal includes a $200 "Switcher Bill Credit" on top of an existing credit that AT&T offers new members for their old devices. That trade-in value could be as much as $250, depending on the cost of the device, so the entire "T-Mobile Switcher" deal could be as high as $450 for new customers.

T-Mobile has been a sore point for AT&T ever since its failed bid to acquire the network back in 2011 cost it over $6 billion in cash and wireless licenses. (See: AT&T Is Screwed if FCC Rejects T-Mobile Merger) And adding insult to fiscal injury, T-Mobile US CEO John Legere has been needling the competitor with frequent jabs in recent years.

This week, Legere tweeted a picture of the company's New Year's resolutions for 2014 alongside those of a year ago. With the header "Shake Up the Wireless Industry," the items for last year's checklist include the following:
  • End 2-year service contracts
  • End upgrade runarounds
  • Make the world your network -- no extra charge
  • Unleash tablets and give away free data for life
  • Deliver nationwide 4G LTE network
This year's list, titled "Transform the Wireless Industry," ends with a hint of a big announcement for CES and a specific dig at AT&T:
  • Continue to remove customer pain points
  • 4G LTE -- go faster, go LOUD
  • Unshackle the family from those other guys
  • Make waves at CES 2014
  • Give AT&T a break... or not
Given the frequent insults on top of billions in losses, it's no wonder AT&T is out for T-Mobile's blood. But the latter's position as the "UnCarrier" has won many dedicated fans who've grown tired of the higher monthly fees, data caps, throttled connection speeds, and creative penalties from other providers. Hopefully with further deals and greater expansion, T-Mobile could incentivize its competitors to actually compete in an industry where the customer always seems to come last.

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