Smart phone showdown: AT&T offers $450 to switch from T-Mobile

In light of rumors that T-Mobile may announce a financial incentive to those switching to its carrier at International CES next week, AT&T has preemptively offered phone and plan credit to those switching away from T-Mobile. 

Matt Rourke/AP/File
An AT&T logo is displayed on an AT&T Wireless retail store front in Philadelphia. The country's second-largest cellphone carrier says it's introducing an option for no-contract phone plans called AT&T Next on July 26. Instead of paying, for example, $200 up front to buy a smart phone, customers would pay monthly installments of $15 to $50 on top of their service plan, depending on the device.

AT&T has fired a rather specific shot at one of its competitors on the brink of the International Consumer Electronics Show (CES) next week. The company is offering $450 in credit to T-Mobile customers who switch to AT&T.

AT&T announced that T-Mobile customers who switch to AT&T will get as much as $450 per line by switching to one of two quick upgrade programs and trading in a smart phone. The phone company will offer $200 in credit for every line switched, and as much as $250 in credit for every smart phone traded in (though the amount given for the phone depends on its quality). In order to get the line-switch credit, customers must switch to the Next plan (which offers upgrades every year) or Mobile Share Value plan, its contract-less offer. Those who want a traditional two-year plan are not eligible for the credit.

Though T-Mobile is the only phone company AT&T specifically mentions in this deal, AT&T is also offering similar deals to those with other carriers. An AT&T representative told CNET that Sprint and Verizon customers can get a minimum $100 trade-in when they switch to AT&T plus pay as little as $25 for a smart phone on the Mobile Share Value plan.

However, representatives from AT&T say it isn’t a sign that the company fears its smaller competitors.

"Wireless has always been a very competitive industry and a move like this should not be unexpected," the representative told CNET. "As you know, there are handset promotions all the time."

This move comes just before International CES, where some believe T-Mobile is poised to launch a similar offer, potentially to cover the early-termination fees for anyone looking to switch to T-Mobile from another carrier, according to the New York Times.

T-Mobile has shaken the mobile status quo recently, breaking away from the two-year plan norm and even eliminating roaming charges when customers are abroad. AT&T has been following suit, also offering faster upgrades and less stringent plans. AT&T actually attempted to acquire T-Mobile in 2011, but when it decided to forgo the plan it was forced to pay T-Mobile $3 billion for its efforts.

Despite AT&T’s seemingly pointed move, John Legere, chief executive officer of T-Mobile, does not seem fazed at the competition, and offered a cryptic hint at what may be likely to come early next week.

"Just wait until CES to hear what pain points we are eliminating next," he says to CNET. "The competition is going to be toast!"

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