Sprint and T-Mobile have been languishing in the carrier wars for more than four years, while Verizon and AT&T have dominated the industry, primarily due to better phones, service, and pricing. But now, things may be changing.
Since becoming CEO in 2012, T-Mobile's John Legere has implemented a variety of corporate changes, and now it's time to see if these changes are enough to propel T-Mobile into the same league as AT&T and Verizon.
A Great Offer
In the early phases of its so-called "UnCarrier" positioning, T-Mobile removed annual service contracts, something that its competitors are now showing interest in, as well. While this strategy is not new in the international scene, annual contracts in the U.S. have been an integral part of the industry for many years.
After dropping the requirement for annual contracts, T-Mobile attracted a record-breaking number of new customers in 2013. Even though it still controls just a small portion of the overall market, in late 2013 T-Mobile added more users than any of its competitors.
To sway even more customers away from AT&T and Verizon over the coming years, T-Mobile has offered to pay off some early termination fees its new customers may incur in switching over to T-Mobile. Specifically, the carrier will offer new customers $350 per line switched over to T-Mobile, as well as up to $300 for trading in their current phone. So, are you tempted to make the switch?
Is It Enough?
T-Mobile still has a lot of work to do if it is going to match the number of customers that AT&T and Verizon currently have. The aspiring carrier may have made it easier for people to switch to its network by paying off ETFs, but at the same time, AT&T has responded in kind. AT&T is also now offering deals to pay off some early termination fees, thereby making it easier for people to leave T-Mobile, as well.
Since many of aspects of T-Mobile's UnCarrier plans have been tried in other countries, or were considered in the U.S. several years ago, some feel that T-Mobile's acquisition strategies are not innovative enough.
"I think T-Mobile should be given credit for starting to grow once again after years of decline, but I don't think they are responsible for any of the industry changes. They would happen with or without T Mobile," said industry analyst Jeff Kagan.
In fact, AT&T and Verizon still control 70% of the services market, and the most important factor in customers' choice of carriers appears not to be financial incentives, but quality of service. That remains T-Mobile's biggest outstanding challenge at this point in its quest to compete with the market leaders.