AT&T – the second biggest wireless carrier in U.S. has been experimenting with a few changes recently that may potentially impact thousands of iPhone users. For one thing, the company has sent out a time limited promo offer to select At&t iPhone 4s users to trade in their phones for a new iPhone 5. The offer basically issues a promotional credit of $200 to anyone who wants to trade in their used but still working iPhones4s’s (it must be no more than three years old though) for a new 16Gb iPhone 5. And there is a two year contract, of course, to go in sync with this offer.
Some experts have speculated that At&t wants to get rid of its stock of iPhone 5 models in anticipation of the arrival of iPhone 5s later this fall. On the other hand, the wireless giant may be experimenting, like the other two carriers did earlier this year, to see if it could increase the loyalty of its iPhone customers by preventing them from jumping on the Samsung’s Galaxy bandwagon, or, even worse, switching over to a different carrier after their contracts expire. Thus, I presume that the company sent out this notice to only those 4s users whose contracts were near expiration date? Let us know what you think. Either way, At&t has the data on its customer retention rates and acts appropriately, so the move may very well indicate that this is the right approach to use if you want to make your customers stay.
At&t has also moved towards a more transparent policy on iPhone unlocking. In its recent blog post, the company’s top executive indicated that they would unlock any iPhone as long as it meets the established procedure. The procedure basically requires one to be a customer in good standing for at least 90 days before the unlocking code can be granted. Under-contract iPhones may be unlocked for international travel or, in many cases, even for domestic use with local GSM providers. The logic behind this approach is that if you have been with At&t for at least three months and paid your bills on time, then you are more likely to stick with the fastest 4g LTE network in the future.
The last in a row of changes may not be as exciting as the previous two. At&t has just announced that they will no longer provide an early upgrade discount to users with two year contracts. In the past, users could upgrade after 20 months. Now, this option is officially off the table. The new upgrade terms apply to all customers whose contracts expire during or after March 2014. Those customers who agree to sign another two-year commitment can still get a partial discount. Some experts point out that the change aims at cutting down the operating costs. A little while ago the company also introduced an additional $0.61 that each customer would have to pay with no exception. It might well be that the early upgrade feature is not as effective in increasing customer loyalty as the new trade-in incentive that the company is currently evaluating. Therefore, call it a swap of marketing strategies.
We should not forget that At&t, just like the other Big Three, is going through a transition that, no doubt, will affect a lot of smartphone users. Apple is losing ground to Samsung and with that we are witnessing the departure of huge lucrative profit margins for the big three carriers that used to comprise the exclusive Apple’s distribution network – namely, At&t, Sprint and Verizon. Samsung is pushing its Galaxy to every corner of the wireless “galaxy” and many more carriers, like T-Mobile, can now boast high quality voice and data services. In my opinion, we are in for more interesting strategic moves in this sector as the competition is heating up.