Will Apple Benefit From the War Between T-Mobile and AT&T?

T-Mobile's latest Un-carrier move highlights the fierce competition among carriers -- and carrier competition will likely benefit Apple.

Jan 9, 2014 at 3:30PM
T Mobile

T-Mobile's (NASDAQ:TMUS) been on a tear recently. The company's Un-carrier moves have led to impressive customer gains. The company's success, however, hasn't gone without a response from the competition. AT&T (NYSE:T) responded last week to T-Mobile's customer acquisition success with $450 in credits. But this week T-Mobile has jumped in with its own incentives for customers to switch to its network. As the carrier war for customers rages on, companies like Apple (NASDAQ:AAPL), whose costly smartphones are highly dependent on subsidies, financing, and credits, will likely benefit.

T-Mobile's planned assault
T-Mobile has generated more than 1.6 million total customer additions and has reported positive branded postpaid net customer additions for three quarters in a row. Its success in acquiring customers follows T-Mobile's implementation of an aggressive plan to disrupt the industry. It's referring to the plan as Un-carrier -- and it's working.

"Our Un-carrier moves have clearly upended this industry," T-Mobile CEO John Legere said in a press release yesterday that highlighted preliminary fourth-quarter results. "Over the past 12 months, 4.4 million customers have come to T-Mobile in response to greater flexibility and choice. We have clearly struck a chord with customers and will continue to look for ways to expand on that in 2014."

T-Mobile has rolled out its Un-carrier initiative in four phases so far, beginning in March 2013.

  1. Introduced "Un-Carrier" plans that said goodbye to subsidies, replacing them with interest-free financing.
  2. Introduced a "Jump" program that allows subscribers to upgrade their phones at smaller intervals.
  3. Added international texting and 2G data in 100 countries to its Un-Carrier smartphone plans.
  4. Offered credits to customers switching from the three major national carriers.

The latest battle
The fourth phase of T-Mobile's Un-carrier moves, announced yesterday, looks like a response to AT&T's just-announced credits. T-Mobile's move offers credits to switching customers from AT&T, Sprint, and Verizon. But as The Wall Street Journal author Ryan Knutson said after AT&T announced its $450 of credits, T-Mobile was already widely expected to announce a similar promotion before AT&T's was announced. So who knows which carrier was planning to offer credits to switching customers first?

T-Mobile's credits are irrefutably more aggressive than AT&T's. They offer up to $350 in early termination fees per line (up to five lines per family) and up to $300 in credits for phone trade-ins. That's potentially $650 in credits per line for customers switching from any of the three major national carriers.

iPhone 5s.

Time for a new iPhone?
Since T-Mobile's announcement detailing the move said the deal would only be available at "participating T-Mobile location[s]," I called around to see just how prevalent the deal was. Every location I called was well aware of the deal.

The intense competition between carriers is great news for Apple investors. As long as they are fiercely competing for customers, the subsidies, interest-free financing, and credits that help drive iPhone sales will remain intact.

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Fool contributor Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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