T-Mobile hangs up its 'deceptive' ad campaign
The wireless carrier must now rethink its strategy after Washington state's attorney general put the kibosh on its marketing approach.
Under T-Mobile's "no-contract" plan, customers were required to buy their own phone, though they could pay off their balance over a two-year period. The company didn't properly disclose to customers that they were required to carry a wireless service for the entire period or pay the full balance owed on the phone if they canceled their order earlier. Customers who purchased T-Mobile service and equipment between March 26 and April 25 are eligible for refunds. T-Mobile denies wrongdoing.
The question for the Deutsche Telekom wireless unit is what to do now to gain an edge in the fiercely competitive wireless market.
Last year, AT&T's plan to acquire T-Mobile was quashed by the U.S. Department of Justice on antitrust grounds. T-Mobile is now in the process of acquiring No. 5 player MetroPCS (PCS), and it began carrying the Apple (AAPL) iPhone April 12, so things are starting to look a bit better.
As TechCrunch recently noted, T-Mobile is losing fewer customers, particularly the lucrative postpaid customers. Nonetheless, it's still losing them, bleeding 199,000 in the most recent quarter. The carrier is also picking up more prepaid customers, gaining 1.7 million over the past seven quarters.
Its rivals, however, did better.
AT&T added 296,000 wireless customers in the second quarter. The company's wireless margins were its best ever, and its churn rate -- a measure of how many customers quit -- hit a record low.
Verizon, which may be buying out Vodofone's (VOD) stake in Verizon Wireless, added 677,000 retail postpaid net connections. The company's customer additions on this basis increased sequentially in every quarter last year, and it expects to repeat that trend this year.
Sprint (S), the third-largest carrier, is the subject of a takeover war between Japan's Softbank and John Malone's Dish Network (DISH). It continues to struggle as well, losing about 560,000 subscribers in the latest quarter, worse than analysts expected.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
I thought that their web page was very clear on this issue. You get discounted service and you buy the phone at full price. In what world would you expect to get your money back on the phone ? The discounted phones they used to offer resulted in higher monthly contract costs than the new plan has.
Hmmm I've been a T Mobile customer for over 12 years, They were the only company that had GSM phones that I could use overseas at the time. The customer service was light years ahead of my prior provider (Bell South/AT&T). better than my companies old (pre Blackberry) provider AT&T, then SPRINT. We now have Verizon, no problems until you want to use your phone in Europe, phone works but Verizon has no plan for roaming there.
As for my persona T-Mobile phones, I've used them across the US and Canada, England, France, Germany, Switzerland, Austria, Hungry, Italy, Austria etc. Always great service, not to say that there hasn't been spots without service, but my company phones and carriers has same issues.
THEN, I get two bills from them, one for the plan they told me I had to give up and one for the NEW plan. I call them and am told by two very RUDE customer service reps that I HAVE to pay both. I go back and forth and am about ready to hurt someone badly because they refuse to understand what I am telling them. That I have a letter telling me I HAVE to get a new plan, and they keep telling me I have to pay both bills for the old and the new plan which are the SAME plan for the same money...they just got a contract for two years out of me to keep the same thing. And now I can't go to another carrier without paying a penalty for early termination of the contact that JUST got me to agree to, and they know it. I told them to try and get the money from me, just try. Finally I hang up and call back and get another rep who listened to me, understood what had happened and canceled the bill from the old plan so I did not have to pay it. Also, those other reps thought I was a brand new customer because all the payments I made to that old plan for all those years? GONE. Everything I had done, all the payments that showed T Mobile that I was a great customer to them was erased. WTH has happened to this company? I tell you this, I hate them so much and there is no way I will be with them when I am done with this new contract. I should have gone with another carrier when I was told I had to sign a two year contract just to keep what I had with them for years, but I have been with them for a very long time. Staying just because you have been with a company for so long is a mistake and it is one I will never make again. I just changed auto insurance (Allstate to Progressive) and saved almost 500 bucks a year AND was able to get Comp and Coll instead of just Liability. Anyways, T Mobile will be out of my life as soon as this contract is up. I no longer tell my family and friends that they are a good company. I now tell them what they did this last time and how bad I was treated by them, when all I have done is be a great customer to them.
I have T-mobile with 3 lines in service. One line no data, because I don't need it. I use a computer to get what I need. Next phone when I got it for wife, she knew little about data, games and such so T-mobile suggested 200 MB would be enough. Third line is for a teen and as one wound expect he needs more bandwidth than a business (wonder when he gets time to go to school??).
Well, wife has progressed to wanting to do everything on her line. Uses chunks of data at 27 MB at a time. So, called T-mobile and wanted to change plan to unlimited. Common sense would think they'd allow me to drop 200 MB cost and then add in unlimited cost. And, we all would be wrong. I'm told that I have a contract with months still on this phone and must pay for the voice, text and 200MB data and if I want Unlimited data an additional $30 a month also. I am getting some discounts (disabled vet., good customer and one more I can't remember) but, bill still runs between $160 and $190 a month. All the while they are giving new customers new rate of $50/line. Seems like they are not so much interest in helping long time customer, just trying to get new meat so they can screw them later.
We will be gone in September as soon as contracts start to end.
By the way, "phone insurance" is a bunch of crap. Can't figure what it's for. We've had three phone go bad...mine from sweat (water) while in pocket, the wive's got stolen and the third one for the boy just quit working and in each case had to pay some for replacement and incurred contract extention on top of these cost.
And then we coud talk about calling customer service and getting "hello,my name is Sam, may I help you?" in a foreign accent....give us a break.
Perhaps T-Mobile is really losing customers because of their customer service. For example, I purchased a $100 prepaid card and added it to my phone. However, T-Mobile somehow credited it to someone else's number. When I called them on it, they initially said they couldn't do anything about it and I would have to go back W**mart where I bought it. I went back and even though they were very nice there and tried to help, they got the run around, too.
Finally, I went into a T-Mobile store and they called and could not believe it when T-mobile said even though they could see I had re-upped via my phone, I had the card and the receipt, they "couldn't refund the money because the other person had already used half of it." WHAT?!!!
The problem with Tmobile, and other carriers is that they have an extremely tight script they must stick to on every call and a number of seconds in which they must say it all to you and get you off the line. They really don't have much time left to help with your issue because they are required to check your account, look for things they can sell you, check if you're eligible for a phone upgrade, offer all that to you, ask you multiple times if that satisfied your reason for the call. If you refuse to hear any of that and try to cut through the nonsense to get an answer the agent will just pass you to another department. They are underpaid, and severely stressed out from the list of 'metrics' they must meet to keep their jobs. I know, because I have worked there, my brother has, and his wife as well. tmobile trains its employees to offer crappy service because they have so many things they must do in the call to keep their job they just don't have time to really help you.
A company that lied? I am so distraught that I must drown my sorrow
with some fresh mozzarella, basil, extra virgin olive oil, olives and garlic.
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