T-Mobile (NASDAQ:TMUS) launched an onslaught of promotions this holiday season, starting first with its offer to give Sprint customers a $200 bill credit (in addition to the usual $650 per line it offers for new customers) if they switched to the UnCarrier.
Additionally, T-Mobile tried to ruin AT&T's holiday season by offering a 128 GB iPhone 6s for just $649.99, the same price the carrier sells the 16GB version for) to AT&T subscribers if they switched to T-Mobile. AT&T customers also get 50% off of accessories in T-Mobile stores, up to $125 off of accessories priced over $70.
But last week, T-Mobile set its sights on Verizon Communications (NYSE:VZ) customers, giving them a free, year-long subscription to Hulu if they switched. Additionally, Verizon customers will get the same 50% off in-store accessories that AT&T customers receive. The deal is only available through December 17, and compared to the offers for Sprint and AT&T customers, it seems a bit light.
Promoting Binge On
T-Mobile CEO John Legere said in a press release:
While Verizon spends billions of dollars on TV ads screaming that "better matters," we are going to show their customers why the Un-carrier is better with a real gift, half-off the best accessories and a full year of Hulu that comes with unlimited LTE streaming with Binge On at T-Mobile! It's a gift that will keep giving all year long!
T-Mobile's new Binge On plan, which comes with every Simple Choice plan of 3GB of data or more per month, allows for unlimited DVD-quality video streaming that doesn't count against monthly data limits. Instead of offering great deals to Verizon customers, T-Mobile is instead trying to convince Verizon users to switch by reminding them that Verizon doesn't have a Binge On equivalent.
Will this work?
For the past 10 consecutive quarters, T-Mobile has added 1 million or more net subscribers. That's amazing growth, and it comes at the expense of T-Mobile's rivals.
But while other carriers need to lose customers in order for T-Mobile to make gains, it's not likely that T-Mobile's customer growth is hurting Verizon's subscriber numbers. Earlier this year, T-Mobile surpassed Sprint as the nation's third largest wireless carrier by subscriber numbers, with most of those customers likely jumping from Sprint to T-Mobile.
But while T-Mobile has grown its customer base, and improved its network at the same time, it does't come close to Verizon's network. According to RootMetrics, Verizon has the top-performing network overall, while T-Mobile comes in last place just under Sprint.
T-Mobile can't compete with Verizon's vast network, so it's targeting the carrier's customers with Binge On instead. But Verizon customers have likely chosen the carrier because they want the most robust network available, and they're probably not going to jump ship just for a Hulu subscription.
But what Verizon and other carriers need to watch out for is T-Mobile's ability add so many customers, quarter after quarter. If T-Mobile's able to keep this up, it won't be long before AT&T and Verizon will have to start seriously combating T-Mobile's offers. AT&T has already said it won't chase customers, but it's only a matter of time before it may have face T-Mobile head-on. Once that starts happening, Verizon may not be too far behind.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. 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.