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T-Mobile to ditch phone subsidies, go after AT&T in 2013

December 07, 2012|By Salvador Rodriguez
  • CEO John Legere says T-Mobile USA will wage an aggressive fight against AT&T in 2013.
CEO John Legere says T-Mobile USA will wage an aggressive fight against… (From YouTube video posted…)

Besides the announcement of an Apple deal, T-Mobile USA CEO John Legere announced an aggressive 2013 plan for the Seattle-based carrier that includes scrapping phone subsidies and going after AT&T's customers.

Speaking at an investor conference in Germany for Deutsche Telekom, T-Mobile's parent company, Legere said T-Mobile will offer only its so-called Value Plan next year.

The plan is intended to offer customers lower rates for their cellular service by disassociating it with the price of a subsidized phone.

Customers can bring their own devices, pay full price for a phone upfront or pay a lower out-of-pocket price followed by monthly payments of around $15 to $20 for 20 months.

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Legere said T-Mobile is making this switch because it has seen a recent surge in customers who are choosing the Value Plan. He also said the company's switch to only offering the Value Plan will allow T-Mobile to offer top-of-the-line smartphones at affordable prices.

As an example, Legere said customers could get top-of-the-line phones by putting down $99 and then paying the rest in monthly installments.

"You may pay $99 for the most iconic device in the world, and then you may get 20 months worth, call it, $15, $20 a month," he said. 

T-Mobile said it will go after AT&T customers who are ready to make a switch, particularly those who want the iPhone. T-Mobile said it plans to go after AT&T customers with an aggressive marketing campaign that includes using the "you love your iPhone, you hate AT&T" slogan.

He also claimed that current T-Mobile customers who switched from AT&T believe T-Mobile has better coverage. He said that leaves AT&T vulnerable and a prime target.

"We're going to very aggressively target AT&T," Legere said.

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