Mobile Broadband Strategies

T-Mobile is offering enterprises up to U.S.$200 in credits per line to switch over to the carrier’s services in order to bolster its position in the B2B market. The promotion, however, will only run in the first quarter of 2013.

According to Fierce Wireless, T-Mobile ran a similar promotion in 2011. The carrier wrote in a statement, “We are offering special port-in credit promotions for eligible mid-market and enterprise voice and [mobile broadband] lines that are activated during the period.” The promotion will be based on the types of plans activated, and credits could be as high as U.S.$200 on voice and mobile broadband plans. Details of the plan are not currently available, but other carriers are running similar promotions. Sprint and US Cellular are offering credits of U.S.$400 and U.S.$300, respectively, for consumer customers.

Yankee Group Senior Analyst Rich Karpinski comments

“If you needed further proof that the U.S. market is reaching saturation when it comes to smartphone penetration, here it is, with T-Mobile joining US Cellular and Sprint in just the past week in offering cold-hard-cash switching incentives. When you can’t get new first-time smartphone users, you need to get existing customers to switch. Further exacerbating the problem, while Verizon had a pretty good first-mover advantage with its early LTE roll-out, and AT&T with its for-a-time exclusive access to Apple's iPhone, it’s much harder for operators today to make unique device or network offers. Most operators offer similar devices and if they haven’t deployed LTE, today they can assure customers higher-speed networks are coming soon. So marketing incentives come strongly back into play. The problem is, operators are already working hard to shore up their margins and lower marketing costs by eliminating up-front device subsidies; simply replacing device incentives with switching incentives will reverse any margin gains they are able to capture. Finally, notice which operators aren’t offering such incentives: Verizon and AT&T. Both already see quarterly churn rates at or below 1 percent, and are having great success enticing new and existing customers to move to shared data plans, which only improve stickiness and loyalty. If second-tier operators have to pay more in marketing costs just to stop from falling behind their  ‘big two’ rivals, they could end up on a treadmill to nowhere.”