Sprint Offers T-Mobile Users 50% Off, Escalating Price War

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  • Promotion takes aim at T-Mobile ahead of the holiday season
  • T-Mobile CEO Legere and Sprint CEO Claure trade Twitter barbs

Sprint Corp. offered customers of T-Mobile US Inc. 50 percent off their bills if they switch carriers, kicking off price-cutting ahead of the holiday shopping season and sparking a Twitter spat with its rival’s CEO.

The Sprint offer, which follows T-Mobile’s free video-streaming announcement last week, includes as much as $650 to cover the costs of switching, the Overland Park, Kansas-based company said in a statement Wednesday. Sprint previously had offered customers of Verizon Communications Inc. and AT&T Inc. -- the No. 1 and No. 2 carriers -- half off what they were paying in monthly service charges. The promotion begins Nov. 20, Sprint said.

Shares of Sprint fell 9.3 percent to $3.99 at the close Wednesday in New York, the biggest one-day drop in more than three months, reflecting investor concern that aggressive price-cutting will hurt the company’s bottom line. The stock is down 3.9 percent this year.

T-Mobile Chief Executive Officer John Legere flagged the move as somewhat desperate in a message on Twitter: “Did we just witness beginning of the end for @sprint? $2.5B to cut, laying people off, now price cuts? The countdown clock makes sense now!” Legere also said Sprint was hiding restrictions in fine print.

Sprint CEO Marcelo Claure fired back in his own tweets. “@JohnLegere the only print that matters is the BIG print. @TMobile customers can come and save 50% of your current rates!! It’s that simple.”

Sprint, in a video posted on YouTube.com, also said it has the fastest LTE service in some markets, according to market research firm Nielsen.

Last week, T-Mobile started Binge On, an offering that lets subscribers watch streaming videos from Netflix Inc., Time Warner Inc.’s HBO and Hulu LLC on their phones without accruing data charges. Sprint Chief Executive Officer Marcelo Claure said T-Mobile’s offer runs counter to the trend toward high-quality mobile video.

“Providing free low-speed video isn’t a huge differentiator,” Claure said in an interview last week. “We are spending billions to put our spectrum to work to offer amazing speeds to our customers so they can enjoy fully-unthrottled, high-definition video.”