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Carrier wars: T-Mobile hits ‘arrogant’ rivals with aggressive new offer


They’ve dubbed themselves the “un-carrier,” and refer to their rivals as ‘’arrogant” and “broken.” Whether you agree with the tactics or not, there’s no denying that T-Mobile (TMUS) is shaking up the formerly cozy and costly wireless service business and winning five thousand converts every day.

As Yahoo Finance tech reporter Aaron Pressman and I discuss in the attached video, the latest move by the third-largest cellphone carrier in the U.S. is an offer that will pay-off the early termination fees that are preventing many customers from switching.  

Through a provocatively worded statement and press conference at the CES Tech shows in Las Vegas, T-Mobile says it is “eliminating one of the last remaining obstacles for individuals and families wanting to switch from AT&T, Sprint or Verizon to the Un-carrier by offering to pay off their early termination fees.”

Like all cell service deals, this one also comes with plenty of rules and requirements, but the gist of this new plans could see T-Mobile paying up to $350 in termination fees, plus as much as a $300 trade-in credit for your old phone, for up to five different lines. In theory, the new plan could be worth as much as $3,250 ($650 x 5) for a family of five.

Of course, the latest enticement from the Bellevue, Washington based subsidiary of Germany’s Deutsche Telekom not only arrived on the first anniversary of last year’s revolutionary move to eliminate service contracts, but comes just one week after rival AT&T (T) announced that it would pay up to $450 for new subscribers to its wireless service in the form of $200 per line and a credit of up to $250 for a trade-in.

As much as the escalating price war is just heating up, it appears to already be shaking things up. In fact, alongside the newest deal announcement, T-Mobile CEO John Legere also pre-announced the company’s latest U.S. subscriber figures, which showed 1.6 million net subscribers additions in the fourth quarter versus a loss of 32,000 a year ago. That brings the full year total for new U.S. customers to T-Mobile to 4.4 million, which the renegade carrier called “strong momentum and positive customer response to its Un-Carrier moves.”

Let the fighting begin!

Disclaimer: Merrill Lynch is not responsible for the editorial content of this program.

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