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T-Mobile to Pick Up 'Evil' Family Fees

Dan Jones
1/9/2014

LAS VEGAS -- CES 2014 -- T-Mobile USA's latest bid to tempt customers from its rivals is to pay the early termination fees on family plans and offer trade-in cash for eligible devices.

CEO John Legere, who wasted no time here in describing the way family plans are currently operated in the industry as "evil," said T-Mobile will offer families up to $350 to cover early termination fees on up to five lines from another carrier and up to $300 trade-in value on working devices.

(Note: A friend used an estimate tool to see how much they would get in trade-in for a couple of older Android devices on Verizon, and found they would get only a few dollars, so consumers should check out such details first.)

Family Ties
The backdrop is always pinker at a T-Mobile event.
The backdrop is always pinker at a T-Mobile event.

T-Mobile's move comes only days after Sprint Corp. (NYSE: S) announced its "Framily" plans, where members don't have to share data (or anything else). (See Sprint Launches No-Sharing 'Framily' Plans.)

And, of course, it's less than a week since AT&T Inc. (NYSE: T) made a pre-emptive strike on T-Mobile's subscriber base with its offer of cash for any of Legere's customers who want to switch. (See AT&T Lures T-Mobile Subs With $450 Promise.)

Legere claimed that T-Mobile US Inc. 's "Uncarrier" strategy to date is already paying big dividends. He said the operator added 1.6 million subscribers net in the fourth quarter of 2013, making it the "biggest quarter for 8 years" for the operator. Overall, it added 4.4 million subscribers in 2014. (See T-Mobile Talks Up a Banner Year in LTE.)

Rising Subs
Legere trumpets the success of the 'Uncarrier' strategy.
Legere trumpets the success of the 'Uncarrier" strategy.

He brushed off questions about Wall Street fears that T-Mobile might be instigating a price war amongst mobile carriers in the US. "A price war? No... But we're going to shake them up... A healthy profit [and a] growth business is clearly our objective."

Related posts:

— Dan Jones, Mobile Editor, Light Reading

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Sarah Thomas
Sarah Thomas
1/9/2014 | 1:08:33 PM
Anyone switching?
Smells like a price war to me. Verizon and Sprint's CEOs both dismissed these kind of offers as marketing stunts that are usually short lived, but T-Mobile's offer is pretty big. I bet it will get a lot of takers. There's little to no risk if there is no ETF.
Phil_Britt
Phil_Britt
1/9/2014 | 3:21:24 PM
Re: Anyone switching?
You're reight about a price war, and it's probably about time for one. Prices have been going up uncheckeck for a while, and this type of price war can help force them compete on service.

Of course, such a price war can have long-term unitended consequences as well, hurting the long-term health of the companies, as happened with the airlines. The air carriers were perennial money losers until the recent consolidations. There is little, if any, further consolidation available among the large telecom providers.
Sarah Thomas
Sarah Thomas
1/9/2014 | 3:28:07 PM
Re: Anyone switching?
There is little, if any, further consolidation available among the large telecom providers.

That theory will very soon be checked!  Legere seemed to really hint that the Sprint merger was happening in his keynote. We'll see if it passes regulatory muster if so.
DanJones
DanJones
1/9/2014 | 4:51:03 PM
Re: Anyone switching?
My read on what he said was that if it was to happen he wanted to be leading brand in the organization.
Sarah Thomas
Sarah Thomas
1/9/2014 | 5:02:46 PM
Re: Anyone switching?
Wonder how Softbank feels about that. And, Hesse has a contract that he's in for the next five years. Would that still apply if they merged?

Before Legere came along, I always thought Hesse was the funny CEO. His humor was also more subtle. He once compared de la Vega to John Wilkes Booth, but at least he didn't say he "liked him better when he was fat."
DanJones
DanJones
1/9/2014 | 5:11:13 PM
Re: Anyone switching?
Legere also called Sprint, "a pile of spectrum in search of a [network] capability," so there's no love lost there. And laughed at  the "framily" plans and "spanky" (spark) network upgrade.
Sarah Thomas
Sarah Thomas
1/9/2014 | 5:43:00 PM
Re: Anyone switching?
I took that to mean, "a pile of [valuable] spectrumi n search of a [T-Mobile network] capability" -- that they could do more with it than Sprint. Either way, he may have talked smacked but he didn't protest much about rumor speculation.
DanJones
DanJones
1/10/2014 | 11:42:47 AM
Re: Anyone switching?
Well Neville Ray is the one that would deal with the spectrum in that situation, he wasn't exactly complimentary about Sprint's network and upgrade efforts either.
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