By Liana B. Baker and Sinead Carew
LAS VEGAS/NEW YORK Jan 8 T-Mobile US
on Wednesday reported a fourth-quarter boost in customer growth
and offered to pay customers to switch from rival services,
escalating already intense competition in the U.S. wireless
The company, the No. 4 U.S. mobile operator, promised
payments of up to $350 per line to consumers who break their
contract with any of its bigger rivals and switch to T-Mobile.
The offer came just days after AT&T Inc promised a
$200 credit to T-Mobile customers who switch. While AT&T also
offered up to $250 for switching customers who trade in their
phone, T-Mobile said it would pay up to $300 for trade-ins.
The companies have been targeting each other because they
use the same network technology, making it easy for consumers to
bring their phone when they switch, but some on Wall Street are
concerned they will cause an industry-wide price war.
T-Mobile said it hoped that whole families as well as
individuals would switch to its service in response to the new
cash offer, which is aimed at covering early contract
termination fees typically charged by wireless operators.
John Legere, the outspoken chief executive of T-Mobile, said
he hoped the offer would end the "industry scam" of family
plans, which tie entire families into long-term contracts.
Legere joked that AT&T's recent offer would actually play to
T-Mobile's advantage because it would allow AT&T customers to
try a different service with less financial risk than before.
"If it doesn't work they'll pay you to come back," Legere
said in announcing the offer at the Consumer Electronics Show in
T-Mobile, which is 67 percent owned by Deutsche Telekom
, managed to turn the corner on four years of
customers losses in 2013 by criticizing its rivals and promoting
its service plans as being more flexible and consumer friendly.
It said it added 1.645 million net customers in the fourth
quarter, up from 1.023 million in the quarter before, marking
its third quarter of customer growth for 2013.
The fourth-quarter additions included 869,000 valuable
post-paid customers, which was up 13 percent from the third
quarter, according to the company.
It said customer defections, known in the industry as churn,
stayed at third-quarter levels of 1.7 percent and compared with
2.5 percent in the fourth quarter of 2012.