T-Mobile making strides, and passes, in mobile market

It seems that, while Russell Wilson of the Seattle Seahawks was the best quarterback on Super Bowl Sunday, Tim Tebow was also making quite a splash even though he hasn’t thrown a football in almost 2 seasons.

During the big game Mr. Tebow was seen shilling for T-Mobile and their “no contract” phone plans. Based in Seattle, investors are starting to see T-Mobile take on the rest of the carriers in the industry, including AT&T, whose shares have dropped 14% while T-Mobile’s have increased 84%.

One of the biggest gambles that T-Mobile and their CEO John Legere have made recently is a big one; terminate your plan early and T-Mobile will  pay for the early termination fees for 5 members of your family who switch from another company to the heirs, something that seems to be putting quite a dent in AT&T’s profit margin.

AT&T has responded with price cuts on big data family plans  as well as softening its upgrade policy for its phones.  While it is stated that AT&T won’t sell a customer a new phone at the cheaper, subsidized price more than one time every 24 months, it’s been found that they’re actually letting customers get away with doing it only after 18 months. It’s quite a big step backwards for the company, even though Apple CEO Tim Cook should be pleased, as he blames low iPhone sales of late on AT&T’s extended upgrade policies.

For families who use over 10 GB of data per month, the new AT&T plan just rolled out can save them upwards of $80 a month. The fact that they didn’t promote it during the Super Bowl was interesting and has some analysts saying that T-Mobile has AT&T a bit rattled.

2013 was an excellent year for T-Mobile as they gained nearly 900,000 postpaid customers in the last quarter alone and over 2 million during the entire year.  Some of the reasons are that they cut monthly service fees, now allow customers to upgrade their phones more frequently and also lowered the cost of international roaming, along with their recent promotion to pay the termination fees from other providers.

There is one measure however where T-Mobile has yet to put a real dent into AT&T, and that’s in actual revenue per phone user. T-Mobile might be growing faster, but AT&T increased their average revenue per customer by nearly 4% in the fourth quarter of 2013.

Of course the largest carrier in the United States, Verizon, seems to be unaffected by all of these price wars and continues to sail above them. Their average revenue per account rose 7% last year while he added over 4 million postpaid accounts. They also did absolutely nothing to increase their holiday sales and still did quite well in the fourth quarter of 2013, thank you very much.

So while Tim Tebow might have thrown a great pitch (rather than a pass) for T-Mobile during the Super Bowl, it’s going to take a bit more to knock Verizon from their throne than that. If only Peyton Manning had taken some tips from them ahead of the game.

Speak Your Mind