Telecom service provider AT&T has recently offered customers of No.4 U.S. mobile provider T-Mobile U.S. $200 credit to switch to its service.
The No.2 U.S. mobile provider announced the promotion after months of direct marketing against it by T-Mobile.
AT&T’s smaller rival may respond on January 8. T-Mobile CEO John Legere is expected to make an announcement at the CES 2014.
The per-line credit would be on top of another credit of up to $250 for customers who trade in their smartphone. While trade-in values vary based on the phones traded, AT&T said that many of the latest phones will qualify for the $250 credit.
No. 3 U.S. telecom service provider Sprint, which has been losing customers for years, will unveil dramatic promotions in 2014 as its new 80 percent owner, SoftBank, is expected to push Sprint to regain lost ground.
AT&T’s move may also bolster U.S. regulators’ conviction that the industry is healthier with four national rivals, making it difficult for SoftBank to realize its reported ambitions to merge Sprint with T-Mobile, Bloomberg reported.
T-Mobile, which is 67 percent owned by Germany’s Deutsche Telekom, posted two quarters of subscriber growth as a result of the promotions, and trumped rivals AT&T, Verizon Wireless and Sprint in phone customer growth.
In early December, AT&T cut service fees for customers who pay for their phones in instalments due to pressure from T-Mobile, the first operator to offer this option.
AT&T is seen as the most vulnerable to T-Mobile’s attacks because both companies use the same network technology, making it easier for their consumers to switch.
While analysts had expected Verizon Wireless and AT&T to shy away from any aggressive responses to T-Mobile, Credit Suisse analyst Joseph Mastrogiovanni said in a research note they now appeared to be under more pressure to discount.
T-Mobile CEO John Legere, in a New Year’s Day tweet, listed winning over family plan customers as a major goal for 2014.
In addition, Legere teased AT&T CEO Randall Stephenson after Friday’s news, questioning whether he thinks AT&T can really buy back customers who had moved to T-Mobile.
He also described the offer as a desperate move by AT&T on the heels of what must have been a terrible Q4.