Rival businesses often exchange a few pointed remarks about competitors—playful jabs that are usually harmless. But sometimes those criticisms escalate into full-blown confrontations that draw public attention.
For context, let’s go back to April 2012, when the FCC approved a deal allowing T-Mobile to acquire $1 billion worth of spectrum from AT&T. As part of that agreement, AT&T also paid T-Mobile $3 billion in cash.
The spectrum covered 128 Cellular Market Areas (CMAs), including 12 of the top 20 U.S. markets, and was earmarked to help T-Mobile launch LTE in 2013. At the time, Neville Ray, T-Mobile’s chief technology officer, said securing the additional spectrum was a key catalyst for their LTE rollout and good news for customers.
Fast-forward to the present, and AT&T appears to be reacting to competitive pressure from T-Mobile. The Texas-based carrier introduced an incentive that offers T-Mobile customers up to $450 when they switch to AT&T.
T-Mobile CEO John Legere responded on Twitter: “#Randall – you gave us cash & spectrum AND we took your customers with #Uncarrier moves, do you really think you can buy them back?”
The “Randall” Legere referenced is AT&T CEO Randall Stephenson, who recently told investors in New York City: “When you’re growing the business initially, you have to do aggressive device subsidies to get people on the network. But as you approach 90 percent penetration, you move into maintenance mode. That means more device upgrades. And the model has to change. You can’t afford to subsidize devices like that.”
T-Mobile pioneered moving away from carrier-subsidized devices and was among the first to offer device financing, core elements of its much-publicized “Uncarrier” strategy.
At CES this week, John Legere attended AT&T’s presentation, was photographed, and was escorted out by security—an incident that generated the media attention he likely expected, even though he claimed he was there “to see Macklemore” perform.
Later today, T-Mobile is widely expected to reveal the next phase of their Uncarrier campaign. According to a leaked slide that has circulated, the new initiative would cover termination fees for an entire family of customers who switch providers, as long as they trade in their devices.
We will provide an update when T-Mobile officially confirms its plans.
What do you think of the ongoing rivalry between T-Mobile and AT&T?