Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) were in merger talks with one another not very long ago. However, the deal between the two telecom giants couldn’t materialize on account of regulator skepticism. It’s barely been a couple of weeks that the duo have given up on combining. While Sprint is formulating strategies to get things right after its failed attempt on T-Mobile acquisition, the latter didn’t take a while to get back to its previous mode of attacking its bigger rivals by indulging in promotional war.
Attacking bigger players
T-Mobile is providing free unlimited LTE data to subscribers who are able to convince a Sprint network user to switch to the former’s network and avail its service. This is the new promotional strategy aimed towards luring Sprint subscribers. T-Mobile has always been a very aggressive company when it comes to building strategies for poaching rival customers. The company has made similar promotional plans in the past as well and has been quite successful in bringing AT&T customers under its umbrella.
- Warning! GuruFocus has detected 5 Warning Signs with S. Click here to check it out.
- S 15-Year Financial Data
- The intrinsic value of S
- Peter Lynch Chart of S
This time T-Mobile has targeted Sprint. The promotional offer is applicable to both the referrer and the Sprint customer that shifts to T-Mobile’s network. While the offer is open to any subscriber shifting from another network, T-Mobile is giving special attention to Sprint’s unhappy customers. This is an extremely lucrative proposal offered by the fourth largest U.S. telecom provider, and it’s likely to attract several customers. It clearly shows the company’s strong intention of crossing the Kansas carrier to stand as the third national telecom player.
The promotional offer is no coincidence, it’s a well thought out move made by the player. The offer is in response to Sprint’s promotional plan with its new family share pack. With its first-ever family plan offering, the third largest carrier expects to draw a huge crowd. Similar to what T-Mobile did with playbook, Sprint is doing with the family share pack. It has decided to pay the termination fee for those who switch from another network. By offering this new unlimited plan, Sprint expects its ailing subscriber base to get a solid boost. The carrier, however, made it very clear that the plan is not directed towards T-Mobile in particular, but all national carriers.
A big thank you to the FCC
Sprint and T-Mobile are the only national carriers that provide unlimited data plans to its subscribers, Verizon (NYSE:VZ) and AT&T (NYSE:T) don’t give unlimited plans. While the fight between Sprint and T-Mobile intensify, customers are getting benefitted with better and more reasonable plans. So somewhere do we need to give credit to the FCC, which was not very much in favor of the deal between the two? Had the regulator given a green signal to the two to combine, customers wouldn’t have witnessed this price cut war.
While company official must have maligned the FCC and the Department of Justice (DoJ), customers could thank their decision that takes into consideration the long term prospect at large. At the moment subscribers have three options, in case they aren’t happy with their existing network, but a combination would reduce that to two. Smaller carriers are pulling up their socks and giving tough competition to the larger players. T-Mobile’s strategy, in particular, has been very impressive in shaking the industry biggies.
The wireless industry is an oligopoly to four key players. And with every passing year, competition’s getting more and more severe as the market is close to saturation. Both Sprint and T-Mobile have been trying to encroach in the territory of the big two. It’s hard though, but T-Mobile’s smart efforts are paying off as the company targets to take one step up the ladder.