The second quarter of this year has seen two of the biggest major wireless carriers in the United States battle it out with their respective rewards programs. AT&T was the first to open fire, introducing its AT&T Thanks rewards program in the early part of June. AT&T Thanks offered benefits such as a buy one, get one deal that promises free movie tickets on Tuesdays, plus some other freebies. Just a few days after AT&T Thanks was announced, T-Mobile unveiled its own T-Mobile Tuesdays offer as part of its Uncarrier 11 event. T-Mobile Tuesdays works by offering free pizza, Frosty’s desserts courtesy of Wendy’s, rentals of digital movies, and shares of T-Mobile stock for selected subscribers. Both rewards program from AT&T and T-Mobile had kicked off in June.
Of course, the objective of launching such rewards programs was to keep current subscribers from switching to rival networks. But for AT&T, rewards programs may have not been that effective in attracting new customers. The second biggest wireless carrier in the US recently revealed that it had added just 185,000 prepaid and postpaid customers during the second quarter of this year. Still, AT&T managed to add a total of 2.1 million wireless connections for the three month long period, but it bears noting that much of that growth is attributed to connected devices such as automobiles. Yet, there are some positives for AT&T. It registered its lowest customer turnover rate ever, with only 0.97 percent for postpaid customers, which means that its reward program may not have been all that bad.
But looking at the bigger picture, it may not be so only about the effectiveness of rewards programs but also the cut throat nature of the wireless industry. In a business wherein every other mobile operator is countering each other’s offer, a simple free giveaway could spell the difference between a subscriber leaving his network in favor of a rival service provider. Sometimes, it boils down to how aggressive one’s efforts are in capturing new customers. T-Mobile is the best example of this. As far as marketing and promotions are concerned, T-Mobile appears to be the more active, certainly the one who makes the most noise. As for AT&T, things are more complicated because it is not just focusing on wireless customers anymore, but trying to broaden its services to include broadband and even entertainment (as exemplified by its acquisition of DirecTV and unveiling of three video services).
AT&T’s second quarter results also show earnings of $3.4 billion on total revenues of $40.5 billion.
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