T-Mobile Ad Confirms Early Termination Fee Payouts to Lure New Customers
January 8, 2014 10:10 AM
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Sources tip T-mobile will pay up to $350 for a family
We have been hearing for a while that T-Mobile would be launching a new program that would pay the early termination fees for people to leave their current provider and come to T-Mobile. The official details of that plan haven't been announced just yet. However, an ad has turned up online that confirms T-Mobile plans.
According to the ad, which was discovered by
T-Mobile will pay termination fees for families when they trade in their devices. Sources report that T-Mobile will pay up to $350 for a family allowing the transfer of up to five lines.
The sources noted that to get the $350 in coverage for termination fees, the users will have to bring over at least three lines. The payout is good for people that transfer in from AT&T, Sprint, or Verizon.
To get the deal from T-Mobile, the users will have to sign a new contract and buy new smartphones. The official announcement of this deal is expected to come today during the T-Mobile conference kicking off today at 12:30 PST.
AT&T is offering $450 for customers
to transfer lines over from T-Mobile. Interestingly, T-Mobile's CEO
bashed AT&T for making such a "desperate" move
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RE: for how long...
1/8/2014 12:26:21 PM
T-Mobile's contracts are set up a little differently from Verizon's which might explain how they could make this profitable.
For example, with T-Mobile if you want a Galaxy S4 you pay an additional $26/month for 24 months which ends up being $624. If you terminate service you owe the remainder of the cost on the phone so all they are giving you is 0% financing on the phone. With Verizon if you want the same phone you pay $199 but sign a 2 year contract where breaking the contract starts at $350 and is reduced $10 each month.
So for anyone keeping service with a company for 2 years, Verizon is paying new customers $424 worth of phone up front. So if T-Mobile did pay out $350 for one line (which they aren't, that requires 3 lines) they still aren't out as much money for new customers as Verizon is.
The other factor is that T-Mobile tends to be around $20 less per month for a line than Verizon which ends up making the payment on the phone a wash but that's just part of their business - smaller coverage map, lower monthly payment.
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