T-Mobile Stirs Wireless Carrier Wars With Low-Cost iPhone Plan
September 23 2015 - 12:10PM
Dow Jones News
T-Mobile US Inc. on Wednesday, in the latest volley in the
heated war for subscribers among wireless carriers, unveiled new
pricing plans that lease out the latest iPhone for as little as $5
a month.
The new plan offers a new 16-gigabyte Apple Inc. iPhone 6s for
monthly installments of $5 or $10, depending on the value of a
trade-in phone. After an 18-month agreement is completed, the
iPhone will be available for the customer to purchase. As part of
the same campaign, the larger iPhone 6s Plus 16GB is being offered
for as little as $9, depending on the trade-in phone.
John Legere, the chief executive of the T-Mobile who has been
known to battle with rivals on social media, said that the company
is seeing "crazy demand" for iPhone preorders.
The new pricing option come as the four main carriers in the
U.S. are competing for subscribers in a mature market with little
growth.
Wireless carriers have been replacing traditional two-year
contracts that include smartphone subsidies with installment plans
that spread the price out and encourage swapping out phones.
Sprint Corp. has leasing plans that run as low as $15 a month
over a 22-month lease. Verizon Communications Inc. advertises a
monthly plan for installments of $27.08 a month for 24 months.
AT&T's "Next" installment plan calls for payments of $21.67 for
30 months.
Apple has also taken aim at wireless companies, announcing
recently that it would finance iPhone sales directly to customers
for the first time without requiring them to be tied to a
particular carrier.
That offer marks a sharp turn in the relationship between Apple,
which needs to sell tens of millions of new phones each year, and
wireless giants that rely on the iPhone to attract customers to
their cellular plans.
T-Mobile has been snatching away market share by aggressively
slashing its prices. Earlier this month, Mr. Legere said the
company had already surpassed the 2.1 million net subscriber
additions it posted in its previous quarter with nearly two weeks
remaining in the current quarter. T-Mobile officially passed sprint
in total wireless connections last month.
September is particularly significant time period for wireless
carriers with the launch of Apple's new iPhone as well as the
annual return of vacationers and students that stirs up subscriber
activity.
Shares of T-Mobile rose 2% to $43.17 in recent trading
Wednesday. T-Mobile has seen its shares rise 60% so far this year,
while Sprint's shares have climbed 8.2%. Verizon shares have
dropped 5.7% and AT&T has declined 4.1%.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
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(END) Dow Jones Newswires
September 23, 2015 11:55 ET (15:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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