Confirming overnight rumors, AT&T said on Friday it would offer T-Mobile customers up to $450 to switch carriers. The deal starts before T-Mobile(s tmus) is expected to announce a switching incentive plan of its own at next week’s Consumer Electronics Show. The $450 is comprised of AT&T’s(s t) existing smartphone trade-in program and a new $200 transfer credit:
Beginning Jan. 3, under the limited-time offer, T-Mobile customers who switch to AT&T can trade-in their current smartphone for a promotion card of up to $250, which can be used toward AT&T products and services. Trade-in values will vary based on make, model and age of the smartphone, but many of the latest and most popular smartphones will qualify for a value of $250. T-Mobile customers can receive an additional $200 credit per line when they transfer their wireless service to AT&T and choose an AT&T Next plan, buy a device at full retail price or activate a device they currently own.
This latest initiative is part of another back-and-forth sparring match between AT&T and T-Mobile, with the latter often jabbing first in what it calls “Uncarrier” policies. In 2013, T-Mobile was the first to remove both carrier contracts and hardware subsidies while also offering a creative smartphone financing and trade-in plan. AT&T followed in many ways by offering a device trade-in plan of its own and is now taking the lead with more aggressive incentives to switch.
For those questioning the need for competition in the U.S. cellular industry, the Uncarrier moves T-Mobile made in 2013 should offer a prime example of why it’s important: They’ve been a big reason the carrier added one million new subscribers in the last quarter. It also helps that T-Mobile has refarmed spectrum for LTE, the byproduct of which makes T-Mobile phones run on the same 3G frequencies as AT&T handsets.
Until now, AT&T hasn’t had to worry about this level of competition, instead, relying on its large network footprint and fast service to keep customers away from T-Mobile. Now, it has to start looking a little more at price and costs, else run the risk of watching subscribers migrate over to its main GSM rival.