Sprint and T-Mobile Merger Failure Kicks off Price Wars
The collapse in a merger deal between Sprint and T-Mobile has caused a sharp and quick turnaround in the relationship between the two carriers, resulting in a price war for customers.
Sprint kicked things off under its new chief executive Marcelo Claure earlier this month by announcing a new Family Share Pack plan that would give consumers up to 60GB of data to split among different lines. The pricing scheme is a bit hard to follow without a guide, and some have criticized the data amount as overzealous without enough infrastructure to support it, but it clearly caught the eyes of T-Mobile.
Sprint followed up with another data-driven pitch. The No. 3 wireless carrier in the United States started offering $60-a-month unlimited data plans. T-Mobile is the only other national wireless service provider to offer an unlimited data plan, although it costs $80 per month.
T-Mobile soon responded with a data incentive of its own: Simple Starter customers can add an additional 1.5GB of LTE data for only $5 extra per month, bringing the total for the plan to 2GB of LTE data at $45 per month.
It's only been a few weeks, but the aggressive back-and-forth between the two carriers is bound to continue as things in the back office also continue to heat up. T-Mobile immediately launched a campaign attacking Sprint once the merger was deemed out of question.
In a company press release urging "T-Mobile customers to save their friends and colleagues still with Sprint," T-Mobile's Chief Marketing Officer Mike Sievert says:
"When we saw how Sprint's dissing its own customers and dropping unlimited LTE plans for families, we knew we had an opportunity to help these people out. Only a 'carrier' would be arrogant enough to make an offer limited only to new prospects, while forgetting their existing customers. The Un-carrier way is to give the best offers to your loyal customers -- and that's what we're doing again today."
This, of course, is simply the icing on the cake that has been T-Mobile President and CEO John Legere's unabashed Twitter bashing of Sprint.
Sprint and its parent company, Japan-based SoftBank Corp., spent most of the year campaigning for the rights to acquire T-Mobile for a cool $32 billion, but the deal was called off in early August due to regulatory scrutiny.
Despite making a plea to policy makers, Sprint was unable to convince the Department of Justice's antitrust division and the Federal Communications Commision that combining the No. 3 and No. 4 carriers would result a better third option for U.S. customers, not reduced competition and higher prices.
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