Optical/IP Networks

AT&T Woos T-Mobile's Pre-Paid Customers

3:05 PM -- AT&T Inc. (NYSE: T) is stepping into its future acquiree T-Mobile US Inc. 's, territory Tuesday as it introduces its first pre-paid smartphone, the LG Electronics Inc. (London: LGLD; Korea: 6657.KS) Thrive, and takes contractless pricing lower.

Along with the $180 Android-based Thrive, AT&T introduced a new pre-paid data package of 500MB of data for $25 and lowered the prices of its existing plans by $5 each. Now users can get 10MB for $5 or 100MB for $15. Unlimited talk and text plans remain at 10 cents a minute or $2 per day for unlimited talk and text.

AT&T hasn't been as gun-shy about pre-paid as competitor Verizon Wireless , but it certainly doesn’t have the reputation for value that T-Mobile does. Of course, if the acquisition goes through, it will be buying that reputation and thousands of customers with it.

Showing its future stepchildren that Mama Bell cares enough to lower prices and bring advanced devices to the pre-paid market is one way it can increase the good vibes prior to the merger. A lot of T-Mobile customers are likely worried about what exactly the union means for them, even as AT&T halfheartedly assures them their rate plans will stay the same.

I don't expect any T-Mobile customers to move to AT&T for GoPhone, AT&T's pre-paid brand, on their own volition -- T-Mobile's plans are, for the most part, still a better value -- but it could help ease their minds about increasing prices and limited choice in a post-merger world.

The pre-paid space has been one of the fastest growing in wireless, and T-Mobile's value-mindedness helped it beat out AT&T by far in the category of pre-paid service (and overall) in Consumer Reports' recent customer satisfaction survey.

So rather than come in and change things at T-Mobile, as many fear, AT&T would be wise to take notes on T-Mobile's strong points and continue to increase its focus on value in the prepaid space.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

sarahthomas1011 12/5/2012 | 5:07:51 PM
re: AT&T Woos T-Mobile's Pre-Paid Customers

What's more likely than T-Mobile customers going to AT&T to beat them to the punch is AT&T customers switching to T-Mobile prepaid plans. They are still a better deal and if AT&T will really keep T-Mobile's plans in tact, they'll benefit in the end. I'll be curious to see if this happens.

WilliamofOccam 12/5/2012 | 5:07:47 PM
re: AT&T Woos T-Mobile's Pre-Paid Customers

Switching from AT&T to T-Mobile is not likely to be cost-effective for the majority of AT&T's customers. However the fact that AT&T is goinh to honor T-Mobiles's contracts should be a major draw for new customers.

sarahthomas1011 12/5/2012 | 5:07:46 PM
re: AT&T Woos T-Mobile's Pre-Paid Customers

For those whose contracts are up, it'd seem like a good deal. If there's no fee to leave AT&T, plus you get a lower rate plan on T-Mobile and then, eventually, the benefit of the merged network, it'd be a win-win.

I'm still not convinced AT&T will make no changes at all to T-Mobile's plans though.

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