LAS VEGAS – If 2013 was the fight against service contracts and device subsidies, 2014 is shaping up as the battle over family plans across domestic mobile operators. The latest to join the fight is T-Mobile US, which announced it would provide up to $650 in credits per line to customers switching family plan lines from rival operators.
T-Mobile US’ offer targets current customers of its three larger rivals – Verizon Wireless, AT&T Mobility and Sprint – offering first up to $300 in instant credit for the trade in of their current device. The remainder of the eligible credit comes once the customer receives their early-termination fee from their current carrier, with T-Mobile US offering to pay up to $350 per transferred line. Carriers currently charge up to $350 in ETFs for customers that break a contract that supported a subsidized smartphone, though those charges are also pro-rated based on the term of the remaining contract.
To secure the ETF reimbursement, customers need to mail or upload the final bill from the carrier they are leaving. T-Mobile US noted the move is a “quick way to escape carrier contracts.”
“We’re giving families a ‘get out of jail free card,’” said T-Mobile US President and CEO John Legere. “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.”
Customers will need to sign up for one of T-Mobile US’ Simple Choice plans, which were introduced last year and de-couple a contract from the rate plan. Instead, customers can sign up to pay a monthly price for their handset spread out over a 24-month period. If a customer chooses to leave T-Mobile US, the remaining balance on that device is immediately due.
In announcing the plan, T-Mobile US executives also threw barbs at its rivals, with some sharp points targeting Sprint.
“Sprint is a pile of spectrum waiting to be turned into a capability,” noted Legere, while T-Mobile US CTO Neville Ray added that Sprint’s recent requests to “pardon out dust” in regards to its Network Vision plan as falling a bit short.
“My goodness, ‘pardon our dust?’ It’s a shitstorm!”
Sprint and its new parent company Softbank have been rumored to be looking at a potential deal to acquire T-Mobile US from its parent company Deutsche Telekom. That deal seemed to have taken a hit earlier this week when T-Mobile US announced a multi-billion-dollar spectrum swap deal with Verizon Wireless that will see T-Mobile US pick up a number of 700 MHz A-Block licenses.
Late last week, AT&T went on the offensive in targeting potential switchers from T-Mobile US. That move will see AT&T offering T-Mobile US customers up to $450 per line to switch their allegiance. The savings requires T-Mobile US customers to trade-in their current phones with AT&T for a credit of up to $250 that can be used towards AT&T products or services. Those customers will also be eligible for a $200 credit per line whey they transfer their T-Mobile US phone number and select one of AT&T Mobility’s Next rate plans. Those plans require customers to pay full price for a device or activate a device compatible with AT&T Mobility’s network.
Legere initially took offense to the AT&T plan, posting on his Twitter account questioning AT&T’s customer plans with: “do you really think you can buy them back?” This tweet would seem to have been a bit short-sighted seeing that T-Mobile US seems to following the same business plan.
Sprint this week rolled out its own family-plan move, targeting multi-line customers, though not necessarily those that belong to the same family. The so-called “Framily” plans allow customers to link up to 10 lines of service under one account, with customers paying less per line the more lines they have on the account.
For one line of service, new Sprint customers pay $55 per month per line for unlimited talk, text and 1GB of data. For each additional new Sprint customer that joins the account the cost per person goes down $5 per month up to a maximum monthly discount of $30 per line. If the account has at least seven people, all lines would pay $25 per month per line. Customers can also add unlimited data to any one line for an extra $20 per month.
New customers signing up to the plan will be required to either pay full price upfront for their device or select Sprint’s Easy Pay device payment plan that spreads the cost over 24 months. New customers can also activate any existing Sprint device and forgo the pricing models.
The fight over multi-line accounts could be an uphill battle, according to a recent report from Strategy Analytics. The firm released results of a survey showing users on family plans are most apt to say they are “very unlikely” to leave their current mobile provider in the next 12 months, with fewer people on family plans “somewhat likely” or “very likely” to churn than those on individual plans.
Bored? Why not follow me on Twitter?
