AT&T Fights To Keep Customers - InformationWeek

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Mobile // Mobile Business
11:55 AM

AT&T Fights To Keep Customers

AT&T fires the latest salvo in the carrier war for contracts: $100 credit for all new lines of service.

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There's no love lost between AT&T and T-Mobile, the nation's first- and fourth-largest wireless network operators, respectively. T-Mobile CEO John Legere has been taking potshots at the larger carrier for more than a year, taunting its leaders and even going so far as to issue fake press releases. At stake? Your money. With the US wireless market nearly saturated, the only way for carriers to win new business is to steal it from competitors.

T-Mobile has been aggressively courting AT&T's customers with financial enticements, and now AT&T has responded in kind. On Wednesday, AT&T kicked off a promotion that will give customers $100 for activating a new line of service. The credit can be applied to any line, be it a smartphone, regular phone, tablet, hotspot, or wireless home phone. The promotion, which runs through March 31, applies to both new and existing customers, no matter which carrier they come from.

Earlier this month, AT&T targeted T-Mobile's customers more directly, offering T-Mobile customers up to $450 in account credit to switch to AT&T. AT&T will also pay up to $250 for device trade-ins (depending on the condition of the device) and another $200 credit for porting their numbers from T-Mobile. In order to earn the $200 credit, however, T-Mobile customers must activate an AT&T Next plan (the carrier's most expensive), buy a device at full price (often costly), or activate a device they already own. This offer is available only for a limited time.

[Samsung and Apple led the pack of smartphone shipments last year -- and that's billion with a b. Read 1 Billion Smartphones Shipped In 2013.]

T-Mobile responded less than a week later with its "Get Out of Jail Free Card" promotion, in which T-Mobile will pay the early termination fees for customers who switch from AT&T, Sprint, or Verizon Wireless. T-Mobile said it will cover up to $350 for the early termination fees (ETFs) plus another $300 for device trade-ins, putting the company on the hook for as much as $650 to win over some customers. (T-Mobile insists the economics behind the plan are sound.) ETFs decrease over time, so T-Mobile's actual ETF payout for those who switch will likely be much lower than $350.

All three of these promotions underscore just how desperate the carriers are to win new customers. Though the ETF payout has been previously offered by carriers on occasion, the tactic has often been frowned upon, as it in effect amounts to a bounty to score subscribers. Any reservations the carriers may have had about paying for new customers has now been tossed out the window.

The metric used to describe loss of customers is called "churn." The lower the churn, the fewer customers are leaving and heading somewhere else. AT&T reported churn of just 1.1% for post-paid accounts during the fourth quarter of 2013 -- a record low for AT&T. Conversely, T-Mobile's churn came in at 1.7%. The percentages can be a bit deceiving, however. AT&T has more than twice as many customers as T-Mobile, so that 1.1% reflects a greater number of actual customers leaving. Meanwhile, Verizon reported fourth-quarter post-paid churn of just 0.96%. (Sprint isn't due to announce fourth-quarter results until February 11.)

Potential customers need to think about more than the dollars and cents when weighing whether or not to jump carriers. Sure, that upfront account credit looks appealing, but how do the service plans add up? What about coverage at home and work? And don't forget about device selection and other associated costs.

In the war for customers, consumers may very well come out on top. How the carriers will fare isn't quite so clear.

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User Rank: Apprentice
9/12/2014 | 8:26:08 PM
Re: AT&T too arrogant for their own good!
The problem is none of them do. We r going through the same problem, we have been with our current company for about 14 years and can't get any of the cheap new special price promotions because we r not new customers! Your right its a bunch of BS!! If there was a company that offered price discounts to all the people that have been with their current wireless provider for 5+ years they would have all the good loyal customers that have already proven that they r loyal and pay their bills!!
User Rank: Apprentice
1/31/2014 | 1:51:07 PM
AT&T... uggg - I paid my own fees to get out of their grip!
One of the most frustrating and definitely the worst customer service in the phone industry. The left hand doesn't know what the right hand is doing.
User Rank: Apprentice
1/31/2014 | 12:14:28 PM
Misleading Headline
The headline should be "AT&T Fights for New Business."  AT&T is not providing any incentive for existing customers to stay unless the customer adds a new service.
User Rank: Ninja
1/30/2014 | 4:39:51 PM
There Is No Free Lunch
This is all very nice, but in the final analysis, all the carriers are thieves and despite the millions spent on marketing, not one is any better than the others.  The savvy consumer has no recourse given the millions of other nonsavvy consumers who are gullible enough to fall for the idea that somehow switching to XYZ carrier is a better deal.  Cellular providers are like used car salesmen - they all operate on the principle that there is a sucker born every minute, which is the entire marketing plan in a nutshell.
User Rank: Apprentice
1/30/2014 | 11:12:32 AM
No reward for loyalty = increasing dissatisfaction
We've been loyal customers since Cingular times, adding phones to our plan as the family expanded.  Yet, this loyalty receives NO RECOGNITION from AT&T. Furthermore, its products aren't any better (took forever to get LTE in my area).  Rather than new gimmicks to lure new customers, it had better start worrying about keeping the ones it has.  Return of unlimited data or rate reductions of some sort based on years of loyalty would be a good place to start.  Otherwise, we are bailing as soon as possible.
User Rank: Apprentice
1/29/2014 | 1:27:06 PM
So long AT&T!
I was a loyal customer of At&t for 10+yrs (actually, way back when it was Cingular!) and they just kept nickel and diming me with overages. Things have definitely gone downhill steadily. I recently decided to part ways with them and join "Republic Wireless".. Could not be happier! Republic has insanely low monthly plans and their coverage (sprint network) is excellent where I live (FL).

Here is my referral link (in case anyone is on the fence/ready to jump ship.. it will save you 19$ on your first month)


Slowly people are beginning to realize what a rip-off at&t is.. I bet their churn numbers will progressively go up!
User Rank: Apprentice
1/29/2014 | 12:51:48 PM
AT&T too arrogant for their own good!
1.  AT&T should relent and allow full data access as they did for the "grandfathered" customers!

2.  They should have one fee for all services, instead of this piece-meal step ladder!

3.  Promote loyalty appreciation, by offering their present customers something just for staying!


T-Mobile, Sprint, & Verizon are catching up fast and will soon take over because they listen to us!  When my contract is up, I will think long & hard about who values the loyalty of a 20+ year customer who pays their bill ON TIME!

I'm just sayin...

User Rank: Apprentice
1/29/2014 | 12:37:13 PM
ATT gouges its current customers anyways.  Sure they will offer a promotion or financial incentive to come over to them. But in the end ATT makes all of the money back and much more that it should be an embarrasment and illegal.

In addition one of the service representatives told me that if i didn't like the prices (even though i have been a customer for more than 20yrs), i could go somewhere else - simply because iwas complaining that i/we long term customers should get some kind of reward or discount.


ATT is bad business but cant be broken up anymore especially since they are in cahouts with the NSA.
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