IPhone free-for-all gives boost to T-Mobile attack on AT&T

Paying Separately

T-Mobile also dropped contract plans, letting customers switch to another carrier at any time they desire, without paying a penalty. On the downside, T-Mobile’s customers have to buy their phones separately -- and the iPhone 5 costs $649 without a contract.

Even with monthly financing, that cost, combined with the wireless subscription, can make a T-Mobile plan as expensive as its competitors.’ If Apple offers a less expensive version of the iPhone, T-Mobile’s service will be all the more attractive, said Tero Kuittinen, New York-based head of sales and marketing for Alekstra Oy, which helps businesses manage telecommunication costs.

“The cheaper iPhone might fit T-Mobile’s budget plan like a glove,” he said.

The new approach is already working. In the second quarter, T-Mobile added 688,000 monthly subscribers, surpassing the 551,000 for Dallas-based AT&T. The smaller carrier’s momentum is continuing, Jennifer Fritzsche, an analyst at Wells Fargo & Co., said in a note last week, citing information from distributors. She doubled her estimate for T-Mobile third-quarter subscriber gains to 425,000.

T-Mobile and AT&T shares each rose less than 1% at 9:48 a.m. in New York.

Unlimited Sprint

Sprint, the third-largest U.S. carrier, may also get a boost from new iPhones after introducing plans in July that offer unlimited calls, texting and data use for as long as subscribers have their phone lines. The idea was to stand out from the bigger rivals, which have been switching to tiered plans -- where customers pay more when they use more data.

SoftBank Corp., the Tokyo-based mobile-phone company, took control of Sprint in July for $21.6 billion, giving the Overland Park, Kansas-based company more funding to strengthen its network.

To prevent an exodus, AT&T and Verizon introduced their own offers this month to let customers upgrade phones more frequently and finance them over time, options T-Mobile had already introduced.

“AT&T and Verizon would not be trying to mimic T-Mobile plans, at least superficially, if they weren’t a bit nervous,” said Kuittinen.

Defection Spike

AT&T experiences a spike in customer defections whenever a competitor starts selling the iPhone for the first time, Ralph de la Vega, the company’s mobility chief, said in July. The effect is always temporary, he said.

Emily Edmonds, an AT&T spokeswoman; Torod Neptune, a Verizon Wireless spokesman; and Scott Sloat, a Sprint spokesman, declined to comment on how the iPhone may affect their subscriber rolls.

“We are looking forward to Apple’s announcement,” T- Mobile Chief Marketing Officer Mike Sievert said in a statement. “We plan to continue being highly competitive.”

People with iPhones tend to be more loyal to their carrier than users of other phones, says Michael Cote, an industry strategist with the Cote Collaborative in Chicago.

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