In bidding war with AT&T, T-Mobile offers new customers as much as $650

January 8

(T-Mobile)

Looks like the rumors were both right and wrong: T-Mobile is indeed trying to lure subscribers away from other networks by offering to cover the early termination fees those customers would face by switching. In a news conference Wednesday, T-Mobile said it would pay up to $350 per line as part of its promotion, which also requires customers to trade in their old phone.

But that trade-in will also come with an instant credit of up to $300, giving switchers a total potential credit of $650.  Customers will then be allowed to pick any T-Mobile phone, including high-end smartphones, for $0 down.

That's a crazy amount of money, particularly in light of AT&T's recent attempts to attract customers away from T-Mobile. When the smaller company's plans leaked last month, AT&T seized the opportunity to offer a $450 credit to people who switched to its network. That dollar figure bested what T-Mobile was reportedly planning to offer by $100. But now T-Mobile has countered that preemptive strike by raising its offer even higher.

Crucially, the offer is also being extended to T-Mobile's existing customer base, executives said. That means that if you're already on contract with T-Mobile, you're eligible for the same credits and free phone.

"[Early termination fees] are another type of phone subsidy," said T-Mobile CEO John Legere. "It's part of the industry scam — there's no transparency."

It's hard to see how T-Mobile turns this promotion into a profit unless it manages to attract a ton of new subscribers. But all of this is good for consumers.

More CES news:

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Brian Fung covers technology for The Washington Post, focusing on telecom, broadband and digital politics. Before joining the Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.
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Brian Fung · January 8