December 23, 2013
T-Mobile Hints At Next ‘Uncarrier’ Move To Woo Subscribers
Enid Burns for redOrbit.com - Your Universe Online
T-Mobile is expected to make its next 'un-carrier' announcement at the 2014 International Consumer Electronics Show in Las Vegas in early January. In the meantime, T-Mobile CEO John Legere has taken to Twitter, hinting that it will reveal "Un-Carrier 4.0" during a media event at the show.
There is speculation that the announcement will be a credit that covers early termination fees, TmoNews reports, according to an anonymous tip.
"… he's teasing a project code named 'Houdini' which will give switchers up to $350 in credit when they switch to TMO … Emphasis will be on families switching up to 5 lines regardless of contract end dates …"
"New Customers will receive instant credit when they trade in a smartphone, then get a credit for the ETF charged by the old carrier when they submit the final bill to TMO."
T-Mobile has made several bold moves to woo customers in recent years. The initiatives have fallen under the name 'un-carrier,' because the plans offered by T-Mobile are less conventional than other carriers. One offering includes unlimited data at a time when other carriers are taking unlimited data plans away. In the past year T-Mobile has eliminated contracts as well as added the iPhone to its offering. It also opened its borders by nixing global roaming fees for international travelers and added 200MB free data per month with a tablet purchase for the life of the device.
The un-carrier plan has paid off for T-Mobile. The carrier said it added 1.1 million subscribers in the second quarter. The new customer boom occurred largely before a second rush of new subscribers came to the carrier for the iPhone.
While the carrier has succeeded in adding new customers, T-Mobile still lags behind competitors Verizon and AT&T. Adding multi-line accounts, such as for a family with as many as five lines, helps increase the number of subscribers as well as increase revenue for the carrier.
On the flip side, the new offer will only be attractive to families or other multi-line account holders. TmoNews breaks down some of the numbers.
Let’s use a “typical” 4 person family: Dad, mom, brother, sister. Dad has 12 months left on his line, mom has 4, brother has 8, sister is due an upgrade. In that situation, the endless cycle would normally continue as the daughter starts looking around for upgrades. Switching isn’t an option, since the rest of the 4-person family are nowhere near the end of their contracts.
Using Verizon as an example, the early termination fee for smartphone users is $350 minus $10 for each month they’ve had the contract. So, Dad is $350-$120 = $230. Mom is $350-$200 = $150. Brother is $350-$160=$190. Sister is $0. In total, that’s $570, a total which T-Mobile could potentially pay off if the family trades in their old phones (to pay the down payments on new ones) and get their final bills covered by this 'Houdini' scheme. Switching and sorting the finances isn’t hassle-free, but it’s not going to be expensive.
While details are still under wraps through January 8 when T-Mobile is scheduled to make its announcement, details have leaked that the promotion will launch on January 15. New subscribers will be required to turn in their old device in order to be eligible for a maximum rebate of $350, though feature phones will pay out a limit of $200.