Barely a month ago, T-Mobile launched their new price setups dubbed ‘Uncarrier’ which focuses more on providing cheaper prices to subscribers with no contracts on handsets bought. Not so long later, Verizon CEO Lowell McAdam praised T-Mobile’s move and said that Verizon may consider going contract-free as well in the future. In what it is shaping to be the war of the carriers in 2013, Virgin Mobile is now ‘buying’ customers off T-Mobile and if you switched by the end of May by buying their smartphone, you stand to get $100.
Virgin has its cross hairs set on T-Mobile largely because T-Mobile is making a lot of noise marketing its new prepaid contract-less plans and Virgin feels that they are entering their territory. Virgin Mobile has been largely built on pre-paid services and just wants folks to appreciate that they have been at contract-less and subsidies-free plans for longer. This simply means that if customers welcome T-Mobile’s contract-free plans, they could get the same or better rates and $100 on top if they go with Virgin.
Virgin and Boost Mobile, another pre-paid carrier and a unit of Sprint, just like Virgin, are more likely to be feeling the heat more now that customers who prefer prepaid and contract-free plans have more carrier options to choose from. Sprint heavily relies on its pre-paid tariffs to offset its declining grasp of the market and Nextel operations. At the moment, T-Mobile is under no pressure to make any further changes or invade any network for subscribers.
Andrew Sherrard, the senior vice president in charge of Marketing for T-Mobile, says that they are not worried at all about Virgin Mobile’s move to buy customers off its network. “We feel good about what we have – network, devices and plans. There is no need to respond right now” he says. According to him, T-Mobile has noticed an early momentum after abolishing contract plans and phone subsidies.
In the past, T-Mobile has not been holding back on ripping its rivals, just like Virgin is trying to right now, although it had put its focus on the two larger carriers – Verizon and AT&T – and believes that even their new plans will attract more subscribers from these two networks than Virgin or Boost. What remains now is to see how beneficial the offer of $100 for customers ditching T-Mobile for Virgin will be for the carrier.