AT&T won’t chase consumers as mobile promotional frenzy levels off

by Matt Klassen on March 12, 2015

Over the last few years the wireless industry has been hit with a veritable blitzkrieg of promotional deals, as smaller mobile players like T-Mobile and Sprint have become increasingly aggressive on pricing and other such marketing ploys. But as I’ve said before, promotional deals are by their very nature temporary, and it finally looks like the wireless industry is once again settling into a war of attrition, the kind of war AT&T, for one, is confident it can win.

During this promotional blitz from its smaller competitors America’s second largest wireless provider has seen significant consumer defection, as promotional deals featuring data doubling, data rollover, and even T-Mobile’s audacious promise to pay subscribers’ early termination fees if they left Ma Bell, have lured bargain hunters and encouraged the dissatisfied masses to find mobile fulfillment elsewhere.

But according to AT&T not only is competitive balance being restored in the wireless market (hear: not only is AT&T once again able to stop caring about promotions and customer satisfaction) but the company is confident it won’t need to lure customers back to the loving arms of Ma Bell; consumers will come back on their own, the company seems to be saying, they always do.

Market flux is never good for perpetual market leaders like AT&T and Verizon, as the last thing those companies want to do is risk their profits for the short term gains provided by aggressive promotional campaigns. That means, of course, that such promotions are really the only weapon smaller companies have to gain ground on AT&T, but this isn’t AT&T’s first time at the dance, and the company knows that tempered patience rather than kneejerk response is always the more prudent course of action.

So although AT&T suffered through several quarters of significant subscriber loss, the company is optimistic the tides are turning and industry equilibrium will once again be restored.

“It seems to have stabilized,” AT&T Chief Financial Officer John Stephens said of the mobile market on Wednesday. “I feel whole lot better about competitive environment.”

But the company has made it clear that it won’t lower itself to cheap promotional plans to win back customers, instead it’ll simply let its own data plans and package deals speak for themselves.

“We won’t chase customers net additions for the sake of another account,” he said. “We’re going to be smart about it.” Simply put, AT&T isn’t concerned about the numbers, but instead is focused on long term profitability and attracting more postpaid contract customers. The company is confident that its own competitive plans will be more than enough to get consumers coming back to Ma Bell’s loving arms.

But the problem for AT&T is that it is unlikely consumers will want to return to the company, given that there’s really no financial incentive to do so. T-Mobile and Sprint have given consumers a reason to leave the likes of Verizon and AT&T, neither of those companies have given any reason for them to come back and, in fact, they seem completely unwilling to do so. It’s this sort of subtle hubris that makes me hope consumers continue to flock to the likes of T-Mobile and Sprint, if for no other reason than to show the likes of AT&T that they’re not above having to consider value, service, and most of all, customer satisfaction.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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