T-Mobile Incentives Could Put Carrier on a 'Treadmill to Nowhere'


In an attempt to gain new customers, T-Mobile is now offering enterprises up to a $200 credit if they switch during the first quarter of 2013.

“If you needed further proof that the U.S. market is reaching saturation when it comes to smartphone penetration, here it is, with T-Mobile joining U.S. Cellular and Sprint in just the past week in offering cold-hard-cash switching incentives," said Yankee Group senior analyst Rich Karpinski in response to a Fierce Wireless article. "When you can’t get new first-time smartphone users, you need to get existing customers to switch. Further exacerbating the problem, while Verizon had a pretty good first-mover advantage with its early LTE rollout, and AT&T with its for-a-time exclusive access to Apple's iPhone, it’s much harder for operators today to make unique device or network offers."

Karpinski also noted that Verizon and AT&T aren't offering incentives like the other companies. He said that both companies see quarterly churn rates at or below 1 percent and are having great success enticing new and existing customers to move to shared data plans, which improves loyalty.

"If second-tier operators have to pay more in marketing costs just to stop from falling behind their ‘big two’ rivals, they could end up on a treadmill to nowhere," he said.

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