T-Mobile US Inc (NASDAQ:TMUS) Uses An AT&T Inc. (NYSE:T) Product To Lure Away AT&T’s Customers

December 16, 2016 - By Ruchi Gupta   ·   0 Comments

T-Mobile US Inc (NASDAQ:TMUS) has launched an offensive against AT&T Inc. (NYSE:T) by running a promotion aimed at luring customers away from its rival. The promotion entails offering a free subscription to DirecTV Now to anyone who moves from AT&T to T-Mobile. The value of the promotional offer is $420 but takers will get it via monthly bill credits worth $35.

“AT&T wants you to think DIRECTV is theirs exclusively, but that’s a load of crap. Both DIRECTV NOW and the DIRECTV apps stream free on T-Mobile with a faster, more advanced network that covers nearly every American,” said the president and chief executive of T-Mobile, John Legere, in a press release.

Terms and conditions

The conditions of qualification are that customers of AT&T need to activate 2 lines before porting over their numbers. They also need to get a T-Mobile number. From there on, takers will be offered a $35 monthly bill credit to cover the cost of DirecTV Now. The new lines must remain active, though.

product-to-lure-away-atts-customers

To further stoke the rivalry between the two carriers, T-Mobile’s CEO assured customers that even if they ended up hating DirecTV Now because it was a product from AT&T anyway, it was a win-win situation since they would be enjoying unlimited LTE data.

Anti-competitive behavior

Lately, AT&T has come under strong criticism from regulators and consumer lobby groups because of its move to zero-rate DirecTV Now. This has been seen as undermining net neutrality which could possibly be a threat to a level playing field besides also inhibiting competition in the long run. Early in December, the Federal Communications Commission raised the concerns in a letter to AT&T.

AT&T has however maintained that their offering ultimately benefits the consumer. However, it is hard to dispel the anti-competitive behavior inherent in the service. Stacked against other services, AT&T’s offering enjoys an overwhelmingly competitive advantage since customers of the carrier can stream without incurring any data charges. Streaming content from other services, however, incurs the usual charges.

On Thursday T-Mobile shares rose by 1.24% to close the day at $57.25. AT&T shares rose 0.97% to close at $41.50.

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By Ruchi Gupta

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