Competition between U.S. wireless carriers is getting serious, and AT&T today made an offer to T-Mobile’s customers: Switch to AT&T and get a deal worth as much as $450.
Each T-Mobile defector gets a $200 credit towards their wireless bill and a trade-in credit of up to $250 towards a new smartphone.
AT&T offers two paths for new customers. If you want to trade in a phone, you pick a new one, choose an AT&T Mobile Share Value plan, transfer your mobile number and then trade in the old phone. You get the $200 credit “on or before your third AT&T wireless bill.” AT&T says most relatively recent phones are eligible for the full $250 trade-in credit. You can also bring your own unlocked phone to AT&T and get the $200 service credit.
Is there a catch ? Not exactly, but there’s an important nuance you need to know about. Phones customers buy from AT&T as part of this offer are not subsidized, according to AT&T spokesman Mark Siegel. That means a 16GB iPhone 5s costs $649 minus the $250 trade-in credit, so about $400. Customers can pay upfront or in monthly, interest-free installments.
You don’t need a degree in economics to understand the new dynamic in the wireless market. T-Mobile, the smallest of the four major carriers, had been ailing for some time and attempted a merger with AT&T, but it was blocked by regulators. So it undertook a very aggressive campaign to win new customers, doing things like abolishing two-year contracts and phone subsidies, offering tablet users 200 MBs of free data a month and cutting international roaming charges.
It appears that T-Mobile’s aggressive stance is paying off; it is growing its subscriber base at a faster pace than AT&T and Verizon. It seems likely that T-Mobile will make yet another competitive move and possibly unveil a new family plan at the upcoming Consumer Electronics Show (CES) next week. That could explain the timing of AT&T’s latest gambit.
All in all, this is a pretty good offer from AT&T, though you’d have to compare exactly what T-Mobile charges you now and what AT&T will charge every month. You should also make sure that AT&T’s network is reliable where you live and work before switching. In any case, it is clear that competition in the wireless marketplace is finally giving consumers some leverage.
San Francisco journalist Bill Snyder writes frequently about business and technology. His work appears regularly in CIO.com and the publications of Stanford's Graduate School of Business and the Haas School of Business at the University of California at Berkeley. He welcomes your comments and suggestions.