T-Mobile's zero down strategy is a worthwhile alternative - analysts

By IVCPOST Staff Reporter

Jul 29, 2013 06:14 AM EDT

On Friday, T-Mobile announced that its customers would not spend for a down payment for all of its smartphones and tablets. The wireless carrier added that the newest BlackBerrys, iPhones, Nokias, Samsung Galaxy smartphones and tablets would be available at T-Mobile stores. "The number of reasons not to switch to T-Mobile this summer is ZERO," John Legere, T-Mobile's CEO, stated.

The zero down payment meant that the price would be added to the monthly bill. Generally, T-Mobile would just charge its subscribers for the retail cost of the phone through payment over two years. The plan would be in exchange for lessened pricing on data, text and voice. The company's competitors such as AT&T, Sprint and Verizon normally ask for US$200 or more upfront payment.

T-Mobile's revenue in the first quarter dropped 7% to US$4.7 billion. In March, the carrier's subscribers were roughly 34 million. The figure increased by 579,000 in May. Analysts were convinced that T-Mobile's plan would let it gain more customers after its market share declined below 10% in the first quarter. Analysts added that the deal offered by T-Mobile to its clients indicated its growing effort to attain a foothold since the deal was considered to be a worthwhile alternative.

"We've been beating our no-contract competitors hands-down for value, and now, with the strength of the T-Mobile 4G network behind us, that lead is only going to grow. We're setting a blazing fast trail and, with our retail partners, will compete aggressively with our '$40, period' rate plan to win over consumers one-by-one," Legere said.

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