Even though T-Mobile ranks number four in the line-up of the United States’ mobile carriers, they have really made a splash in 2014—especially this week at the Consumer Electronics Show. From T-Mobile announcing their “get out of jail free” plan to AT&T having the CEO of T-Mobile, John Legere, escorted from their party, there’s been a lot of chatter about the company and Legere, who has been called “the boldest CEO out there.” There is definitely tension among the two carriers. According to Reuters, “AT&T is most vulnerable to competition from T-Mobile because both companies have the same network technology, which makes it easy for consumers to switch between their services without having to buy new phones.”
T-Mobile reported that they added 1.6 million customers in their fourth quarter. Then AT&T announced they would offer T-Mobile customers $450 if they switched to AT&T and turned in their smart phone. In response to this move Legere took to the company’s website and wrote, “This is a desperate move by AT&T on the heels of what must have been a terrible Q4 and holiday for them. I’m flattered that we have made them so uncomfortable! We used AT&T’s cash to build a far superior network and added Un-carrier moves to take tons of their customers – and now they want to bribe them back! Consumers won’t be fooled…nothing has changed; customers will still feel the same old pain that AT&T is famous for. Just wait until CES to hear what pain points we are eliminating next. The competition is going to be toast!” The announcement Legere is referring to is their new “get out of jail free” feature, where T-Mobile will offer to pay early termination fees to users who leave AT&T, Sprint or Verizon, so long as you trade in your phone and get a T-Mobile plan.
With T-Mobile making waves in the industry, will the FCC allow a merger or let the companies continue to make strides forward? There’s definitely not a lack of competition in the industry with these two companies stirring things up. Tower owners are watching this potential merger, wondering how it might affect them in the long run. If there was no merger, tower owners wouldn’t lose a source of revenue. However, there is a lot to take into consideration and the CEO of Verizon, Lowell McAdam, is skeptical that a merger would go through without some type of bump in the road.
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