As part of a Valentine's Day promotion T-Mobile USA will offer all of its handsets for free at its retail stores on Feb. 11 and Feb. 12 when customers sign a two-year contract for a qualifying plan. The promotion echoes a similar one T-Mobile offered last Father's Day when it offered all of its phones for free when new customers signed up for a family plan--a service plan that has at least two lines, each with a two-year contract.
As part of its turnaround strategy, the carrier has made increasing smartphone penetration and revenue two of its key goals.
The Valentine's Day promotion comes halfway through the first quarter, which is seasonally a slower quarter for business than the fourth quarter, and so the promotion could give T-Mobile a fresh injection of new subscribers.
According to Recon Analytics analyst Roger Entner, the Father's Day promotion, which occurred near the end of the second quarter, saved T-Mobile's quarterly results. "The impact of a promotion like that is really significant at a company like T-Mobile. It's coming halfway through the quarter. With that, they know exactly what they have to do in March to have a good quarter."
Entner acknowledged that these kinds of promotions increase a carrier's cost per gross acquisition, but said such costs are worth it. "Philipp Humm is there to grow the company, increase subscribers and not manage CPGA," Entner said, referring to the T-Mobile USA chief. "Once the company grows, the CPGA problem solves itself."
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