The financial analysts at Jefferies believe that Sprint (NYSE: S) could steal around 50,000 customers from T-Mobile US (NYSE:TMUS) in the fourth quarter due to Sprint's recently announced half-off promotion.
"Given the inclusion of T-Mobile in Sprint's new half-off promotion, we reduce our postpaid handset net add estimates from 950k to 900k to reflect a modest potential impact," the analysts said in a note to investors today. "T-Mobile's $200 switcher offer targeted at Sprint customers was likely a hasty reaction and ended on December 6."
Added the analysts: "While it is too early to ascertain the impact of the 50% off promotion, the T-Mobile counter promotion could be an indication of early success, though we view this more a misstep by TMUS than a market inflection."
Sprint last month announced it would cut the rate plans in half of customers who switch to Sprint from Verizon (NYSE: VZ), AT&T Mobility (NYSE: T) and T-Mobile, and said the savings will last through 2018. Sprint is essentially expanding upon on its "Cut Your Bill in Half" offer, which it launched a little more than a year ago and aimed at just Verizon and AT&T customers. Since then, T-Mobile has surpassed Sprint as the No. 3 carrier by subscribers and Sprint and T-Mobile have engaged in a series of offers and counter-offers, especially on phone leasing offers and promotions.
The new Sprint offer will run through Jan. 7.
Likely in response to Sprint, T-Mobile just a few days after Sprint's announcement said it would give $200 to every Sprint customer who switches to T-Mobile, a promotion that does not require a handset trade-in and stands in addition to the $650 that T-Mobile offers to cover the cost of early termination fees.
The dueling offers come amid the critical fourth quarter holiday shopping season, a time when most of the nation's wireless carriers pull out all the stops to acquire new customers and trounce their rivals. Last year, for example, the U.S. wireless market recorded its best net-add year in the past seven years, partly due to the strength of carrier's efforts in the fourth quarter.
However, this year's fourth quarter isn't as competitive as last year's year-end period, at least according to Verizon CFO Fran Shammo. "I think we're seeing less volume than you did a year ago," he said today in comments at an investor meeting.
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