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AT&T, T-Mobile offer to pay off switching subscribers

Level 3 is spending $6.7bn on the deal

US operators AT&T and T-Mobile have entered into a war of incentives, with each offering to pay the termination fees for customers willing to switch networks.

Earlier this month, AT&T directly targeted T-Mobile subscribers with a campaign pledging to offer subscribers up to $450 each if they switch operator and trade in an eligible smartphone.

AT&T is offering T-Mobile customers a promotion card worth up to $250 when they trade in their current smartphone, based on the value of the device. Subscribers will then receive an additional $200 credit per line to cancel their contract, switch network and opt for either AT&T’s Next plan, buy a smartphone at full price or activate a device they already own.

The news incensed T-Mobile USA CEO John Legere, who issued a cutting statement hours after AT&T’s announcement.

“This is a desperate move by AT&T on the heels of what must have been a terrible Q4 and holiday for them,” he said. “I’m flattered that we have made them so uncomfortable! We used AT&T’s cash to build a far superior network and added Un-carrier moves to take tons of their customers – and now they want to bribe them back! Consumers won’t be fooled…nothing has changed; customers will still feel the same old pain that AT&T is famous for.”

He added that T-Mobile would retaliate this week with news of its own at consumer electronics show CES, which it did with an announcement that it will offer to pay rivals’ subscribers up to $650 for switching to its plan.

The operator is offering to pay the early termination fees of up to $350 for individuals or families who want to switch from AT&T, Sprint or Verizon to T-Mobile’s Un-carrier plan. In addition the operator is offering up to $300 in credit when they trade in an eligible handset.

“We’re giving families a ‘Get Out of Jail Free Card,’ said Legere “Carriers have counted on staggered contract end dates and hefty early termination fees to keep people bound to them forever. But now families can switch to T-Mobile without paying a single red cent to leave them behind.”

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