AT&T, Verizon, Sprint slump after T-Mobile launches termination fee program

AT&T (T -1.9%), Verizon (VZ -2%), and Sprint (S -4.4%) are each selling off after T-Mobile USA (TMUS -1.1%) announced a credit program for defecting mobile subscribers - up to $300 in credit for trading in a phone, buying an approved T-Mobile phone, and signing up for a postpaid plan, and up to $350 to pay off termination fees - that was even more aggressive than expected. Sprint is also being pressured by a Deutsche downgrade to Hold.

FBR's David Nixon likely speaks for many on the Street when he expresses concerns AT&T, Verizon, and Sprint "will be forced to react to the move." Fears that T-Mobile's efforts will pressure industry margins and increase churn have already been running high. AT&T announced a smaller promotion (up to $450 in credit) last week.

Nixon also says CES feedback points to "surprising confidence from T-Mobile US that a merger with Sprint could be approved if argued on the right basis." T-Mobile CEO John Legere didn't rule out a future acquisition by Sprint yesterday, though he did suggest T-Mobile's brand would be maintained post-acquisition. Legere also took quite a few shots at his rivals.

Meanwhile SoftBank (SFTBF, SFTBY) CEO Masayoshi Son isn't mincing words regarding Sprint's challenges. In a Nikkei column, Son blasts Sprint's marketing efforts (all of the company's ad agencies have been fired), and says the carrier "has gotten used to being a loser."

From other sites
Comments (9)
  • Clayton Rulli
    , contributor
    Comments (3433) | Send Message
    Good for consumers. If only we could get more competitve pricing and free markets in cable and internet.
    9 Jan 2014, 03:01 PM Reply Like
  • idahoradm
    , contributor
    Comments (23) | Send Message
    Where consumers really need open market competition is in health care insurance. Pretty soon it's going to be no competition at all and consumers will get the bad end of the deal with government health care.
    9 Jan 2014, 06:40 PM Reply Like
  • flux8
    , contributor
    Comments (729) | Send Message
    says the carrier "has gotten used to being a loser."


    Glad someone finally has the balls to call out Sprint. Maybe the SoftBank purchase was the right move after all.
    9 Jan 2014, 03:46 PM Reply Like
  • bulldogSR
    , contributor
    Comments (10) | Send Message
    I agree, my Sprint data connection here is useless. But they charge a 10 dollar premium for smartphones each month. Unlimited data ? Thank goodness for wifi.
    9 Jan 2014, 05:15 PM Reply Like
  • Yokyok
    , contributor
    Comments (327) | Send Message
    The problem with Sprint is not their lack of marketing efforts, it's their pathetic network. Even where they do have LTE it's slower than Tmobile's HSPA+, and where they don't have LTE it's like dripping mollasses. And people just aren't falling for their "it's gonna be better someday soon" false promises anymore.
    9 Jan 2014, 08:17 PM Reply Like
    , contributor
    Comments (42) | Send Message
    Right on Yokyok !!!!
    Son did not do his research before buying Sprint/Clearwire & now like a poor carpenter he is blaming his TOOLS.
    Ergen/Dish could have better used the Sprint network & Clearwire spectrum for very profitable wireless video.
    Ergen - a poker master - may yet buy out Sprint/Clearwire at a BANKRUPT price.
    10 Jan 2014, 12:23 PM Reply Like
  • Oxyman
    , contributor
    Comments (152) | Send Message
    Also, my understanding of the promotion is that one cannot transfer their cell phone # to the new Sprint provider; methinks few of us would give up #s' that we have had for years?
    10 Jan 2014, 01:50 PM Reply Like
  • dostoevsky228
    , contributor
    Comments (346) | Send Message
    WHere are all the T activist investors who need to rise up and FIRE CEO stephenson and all his high priced bellhops....
    10 Jan 2014, 09:42 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2867) | Send Message
    Unusual options action in $Tmus Feb calls today
    14 Jan 2014, 03:44 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs