T-Mobile, Sprint Tussle for Customers Escalates

T-Mobile US Inc. (TMUS) and Sprint Corp. (S) are embarking on a price brawl to take each others’ subscribers after a deal to merge the wireless carriers collapsed.

T-Mobile is enlisting its own customers to recruit new users. Starting next week, T-Mobile’s refer-a-friend campaign will reward its own subscribers and the friends recruited from other carriers with one year of unlimited data, according to a statement yesterday. Not to be outdone, Sprint fired back, offering unlimited data, calling and messaging for $60 a month, undercutting a similar package at T-Mobile by $20.

T-Mobile’s offer -- introduced with a statement entitled “T-Mobile Urges Its Customers to Rescue Beleaguered Sprint Customers” -- is aimed primarily at Sprint and also applies to customers recruited from Verizon Communications Inc. and AT&T Inc. After Sprint abandoned a plan to merge with T-Mobile, Sprint’s new Chief Executive Officer Marcelo Claure has reduced prices at a company that had largely sought to stay above the fray of price cuts that have been led by T-Mobile.

“It continues to amaze me to see the old carriers failing to listen to their customers, or reward them for their loyalty,” T-Mobile CEO John Legere said in the announcement. “That arrogance and indifference has defined the U.S. wireless industry for too long. We’re changing that.”

With the new offer T-Mobile, based in Bellevue, Washington, will also give its customers a $25 bonus to spend at T-Mobile for each referral, according to the company’s website.

‘No Gimmicks’

Sprint’s $60 unlimited individual offer begins today. The company dropped its Framily plan this week because it didn’t compare directly with rival prices, Jeff Hallock, Sprint’s chief marketing officer, said in an interview yesterday.

“This is a simple, straightforward, affordable plan,” Hallock said. “There’s no gimmicks to this, it’s not a promotion, there are no hoops to jump through like T-Mobile’s where you have to figure out how to refer others.”

Still, Overland Park, Kansas-based Sprint is playing catch-up on network upgrades, and was rated worst of the four top carriers this week by RootMetrics. It has also lost monthly subscribers for seven straight years.

While Legere recently predicted that T-Mobile will overtake Sprint in total customers by the end of the year, Hallock declined to say when he thinks the company’s subscriber losses would end.

“We are making all the right changes and more will come,” he said. “This is the first step to get us on the trajectory back to positive subscriber growth.”

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net James Callan, Stephen West

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