T-Mobile will soon announce a new step in its Uncarrier initiative – dubbed as Uncarrier 4.0 – maybe as soon as CES 2014, which may be offering cash to subscribers that ditch their current mobile operator in order for them to make up for their Early Termination Fees.
The news is not confirmed yet, as we’re simply looking at an unconfirmed report from TMoNews, which received an interesting tip on the matter. Apparently T-Mobile would give users up to $350 in credit when switching over. Here’s what the anonymous tipster said about project “Houdini”:
…he’s teasing a project code named “houdini” which will give switchers up to $350 in credit when they switch to TMO… Emphasis will be on families switching up to 5 lines regardless of contract end dates…
New customers will receive instant credit when they trade in a smartphone, then get a credit for the ETF charged by their old carrier when they submit the final bill to TMO.
Will this be profitable for T-Mobile, even if it’s a scheme that should help the carrier get more subscribers? TMoNews says that for single lines it may not be a great offer for the carrier, which may end up losing money on the deal if the customer decides to leave T-Mobile as well. But family plans that switch over may be a lucrative deal for T-Mobile:
Let’s use a “typical” 4 person family: Dad, mom, brother, sister. Dad has 12 months left on his line, mom has 4, brother has 8, sister is due an upgrade. In that situation, the endless cycle would normally continue as the daughter starts looking around for upgrades. Switching isn’t an option, since the rest of the 4-person family are nowhere near an end. Using Verizon as an example, the early termination fee for smartphone users is $350 minus $10 for each month they’ve had the contract. So, Dad is $350-$120 = $230. Mom is $350-$200 = $150. Brother is $350-$160=$190. Sister is $0. In total, that’s $570, a total which T-Mobile could potentially pay off if they trade in their old phones (to pay the down payments on new ones) and get their final bills covered by this “Houdini” scheme. Switching and sorting the finances isn’t hassle-free, but it’s not going to be expensive.
That said, nothing is official just yet, so we’ll look forward to T-Mobile’s Uncarrier 4.0 announcement for more details. However, including a different approach for ETFs in its uncarrier plans makes sense, at least for the consumer. And yes, that could mean that “Houdini” could make your ETFs disappear.