Why is it that the cell phone company T-Mobile won’t raise prices?
The biggest phone companies said that their prices for subscribers went up. But T-Mobile US, Inc. (TMUS) says it will keep prices the same and hopes to take some of its competitors’ market share. In a recent press release, T-management Mobile said that customers’ prices would never go up after they signed up. So, the company reminded customers that AT&T and Verizon, two of its main competitors, recently changed the prices of some old tariff plans to help make up for inflation.
On the other hand, T-Mobile guarantees that its customers will keep paying the old prices if they stick with the old tariff plans. But T-Mobile expects to make more money even though it won’t raise prices. Growth may be driven by the new, more expensive Magenta MAX tariff plan. Since the beginning of the year, many of the company’s promotions have been aimed at getting people to choose this tariff plan. Magenta MAX is the most popular choice for new customers, but so far, only 15% of customers use it overall. The price hikes by T-competitors Mobile give T-Mobile a chance to promote the new tariff plan even more, even if it means making customers of other networks unhappy.
A survey done after AT&T raised its prices found that the company could lose up to 600,000 subscribers per quarter because of changes to its tariff policy. But the survey showed that most people who leave AT & T will probably go with Verizon. But T-new Mobile’s advertising campaigns could make people change their minds. T-Mobile also advertises other services, such as the sale of equipment on a payment plan, fixed wireless Internet for homes, etc.
All of this helps to bring in more money from each subscriber and get them more involved in the operator’s ecosystem. T-Mobile thinks that between 7 and 8 million more people will use the Internet at home by 2025. Most of the strategy is aimed at rural markets, where coverage is still not good enough. When T-Mobile combines its new pricing policy with new technologies, it can get a big competitive edge.
