Wireless War Heats Up as AT&T Goes on Hiring Spree
The company has battled T-Mobile US Inc. (NYSE: TMUS) and, more recently, Verizon Communications Inc. (NYSE: VZ) with offers of new subscriber plans aimed at growing its subscriber numbers by appealing to customers for prepaid service and lower-cost post-paid service. The new hires are needed, according to AT&T, to meet increased demand in its retail business.
That would seem to indicate that AT&T’s new offers have been a hit with customers. The company added a net 566,000 post-paid subscribers in the fourth quarter. Of that number, 299,000 are smartphone subscribers. AT&T also added 440,000 tablet subscribers in that time. And the company added a total of 809,000 net new subscribers in the quarter. The company also sold 7.9 million smartphones in the quarter.
Now that Verizon has joined the price war, all the major wireless carriers will have to focus on reducing churn rates. One of the basic tenets of marketing is that it is cheaper to keep an existing customer than it is to acquire a new one.
Also on Wednesday, BlackBerry Ltd. (NASDAQ: BBRY) announced that it would not renew its contract with T-Mobile after the current deal expires on April 25. The stated reason is that the two companies’ business strategies are no longer aligned.
What part the current price war among the carriers played is open to speculation, but T-Mobile’s recent offer to upgrade BlackBerry subscribers to an iPhone 5S certainly has to play a major role. The question then is whether AT&T and Verizon will continue to offer BlackBerry devices as a weapon in the price war, or whether the Canadian company’s products will be left behind.