AT&T Offers T-Mobile Customers $450 to Switch Carriers

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.

Image: Christian Science Monitor