AT&T Embraces the Uncarrier Spirit

After spending most of the past year on the receiving end of T-Mobile’s Uncarrier strategy, AT&T has made its first truly aggressive move. In a new promotion launched today, T-Mobile customers that switch to AT&T will receive a $200 credit per line, as well as up to $250 in trade-in credit for their old T-Mobile phone. In return, these ex-T-Mobilers must join AT&T’s Next program, and purchase a Mobile Share plan – but without any contractual obligation beyond the Next program itself.

This is AT&T’s second major step to defend itself against T-Mobile’s successful Uncarrier strategy. In early December, AT&T launched  its no-contract mobile share “Value” plans (a direct defensive move against T-Mobile’s own value plan options). But what makes this latest move so interesting is that AT&T is pre-empting T-Mobile’s rumored next Uncarrier move, expected to be announced at CES on Wednesday. As such, this is the first time we’ve seen AT&T take a lead step in a calling plan/subscriber battle for a very long time. 

In many ways, the move is reminiscent of when Verizon Wireless and AT&T used to duke it out over subscribers more than five years ago. That battle settled down and a status quo reigned until T-Mobile started targeting AT&T customers aggressively in 2013, putting the larger carrier on its back foot. Indeed, in Q3 2013, we suspect that AT&T lost postpaid subscribers, as the company only posted a net subscriber growth of 363,000, but had 388,000 net postpaid tablet adds. The Q4 numbers are not yet out, but this move suggests that AT&T continued to see a clear threat from T-Mobile during this period. And T-Mobile has been anything but shy with regards to its intent: recent advertisements include lines such as “What keeps AT&T up at night? Us apparently.”

Having raised the stakes just days before T-Mobile’s next Uncarrier announcement, AT&T has certainly made an impact. But has it gambled correctly? No one knows for sure what T-Mobile plans to announce next week, although the rumor is that the carrier will offer to pay a prospective customer’s early termination fees to get them out of a competitor’s contract. Will this AT&T announcement encourage T-Mobile to raise the stakes further? We will be there it see. Regardless, at this rate a savvy consumer should be able to bounce from carrier-to-carrier, playing them against each other potentially gaining credits and other benefits along the way.