T-Mobile Subscriber Base Could Be Under Attack as Deal with AT&T Looms
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T-Mobile USA may possibly lose as much as three times as many subscribers in 2011 as the company did in 2010.
Bloomberg reports Friday the wireless company could lose roughly 1.2 million contracts this year as the U.S. Justice Department has stepped in to stop the acquisition of T-Mobile USA by AT&T (NYSE: T). The loss would put T-Mobile close to 33.5 million customers total and 25.2 million being contract subscribers.
T-Mobile in the past has been known as a company which cuts prices and offers promotions to attract customers. Recently however, with the acquisition by AT&T looming, T-Mobile has been unable to undergo such changes. The Department of Justice may not allow the acquisition to go through as it believes T-Mobile’s role in the wireless service market as a cost cutter is necessary.
A spokesman for T-Mobile said AT&T would honor all of the company’s plans following the completion of the merger.
The company has been laying off on promotional offers in an attempt to prove the company’s pricing isn’t much lower than other communication rivals such as AT&T, Verizon (NYSE: VZ), and Sprint Nextel (NYSE: S). As a result of less promotions, T-Mobile is seeing less new contracts and purchases of prepaid phones.
Also aimed at gaining customers, boosting sales, and improving customer service, T-Mobile recently announced plans to revamp around 400 stores.
If a deal with AT&T looks less and less likely to happen, customers may begin second guessing signing a two-year contract with a company which is struggling to stay alive. Contract customers are more profitable to a wireless service company than prepaid customers.
In the end, the Department of Justice could be the source deciding the fate of T-Mobile.
Bloomberg reports Friday the wireless company could lose roughly 1.2 million contracts this year as the U.S. Justice Department has stepped in to stop the acquisition of T-Mobile USA by AT&T (NYSE: T). The loss would put T-Mobile close to 33.5 million customers total and 25.2 million being contract subscribers.
T-Mobile in the past has been known as a company which cuts prices and offers promotions to attract customers. Recently however, with the acquisition by AT&T looming, T-Mobile has been unable to undergo such changes. The Department of Justice may not allow the acquisition to go through as it believes T-Mobile’s role in the wireless service market as a cost cutter is necessary.
A spokesman for T-Mobile said AT&T would honor all of the company’s plans following the completion of the merger.
The company has been laying off on promotional offers in an attempt to prove the company’s pricing isn’t much lower than other communication rivals such as AT&T, Verizon (NYSE: VZ), and Sprint Nextel (NYSE: S). As a result of less promotions, T-Mobile is seeing less new contracts and purchases of prepaid phones.
Also aimed at gaining customers, boosting sales, and improving customer service, T-Mobile recently announced plans to revamp around 400 stores.
If a deal with AT&T looks less and less likely to happen, customers may begin second guessing signing a two-year contract with a company which is struggling to stay alive. Contract customers are more profitable to a wireless service company than prepaid customers.
In the end, the Department of Justice could be the source deciding the fate of T-Mobile.
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