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.

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Brian Fung covers technology for The Washington Post.
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Brian Fung | January 8