Tags: Cellphone | T-Mobile | contract | carrier

Battle Between Companies May Cheapen Cell Service

By    |   Wednesday, 12 February 2014 07:27 AM

Competition between cellphone companies is likely to mean cheaper prices for consumers, especially when you add Internet technology, according to USA Today.

Cellular service providers are getting increasingly aggressive in the battle for the consumer.

T-Mobile took a jab at the competition last month by announcing that it would pay up to $650 to cover the termination fees for consumers who wanted to divorce their current carriers.

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Of all the changes that have swept through the cellphone industry, the one mainstay that holds fast is the two-year contract, according to The Boston Globe. T-Mobile did away with the practice for its customers last year.

"What we're doing [now] is ending contracts for everybody, forever," T-Mobile CEO John Legere explained at the International Consumer Electronics Show.

The Globe said he described the move as "eliminating pain points."

"What we are going to do is force the industry to get healthier, force the industry to change. I want every customer to have constant, complete choice," Legere told the audience.

AT&T responded by offering T-Mobile customers $450 to switch, The Globe noted. And last week, the company came out swinging again, by slashing prices for its family data plans, according to USA Today.

But the biggest disruptor in the battle for the consumer may come from a small Internet-based start-up called FreedomPop, USA Today stated.

In October, the company unveiled an offer for a low-end smartphone and free basic service for voice, text and data. This month, FreedomPop is getting more aggressive, offering unlimited voice and text plans for $4.58 a month, which are also available on high-end smartphones.

The low-cost plans are possible because FreedomPop takes advantage of technology that allows voice calls to be broken into data and sent over the Internet. USA Today explained FreedomPop also lowers costs by buying smartphones at auctions and on shipyard docks.

FreedomPop CEO Stephen Stokols told USA Today more than 200,000 customers are expected to sign on with the company by the end of this quarter.

And with the current rates, FreedomPop customers reportedly have the opportunity to save approximately 85 percent when compared to larger carriers' plans.

"We're declaring war on an industry that's taken advantage of consumers for too long," Stokols told USA Today.

"The big carriers know that the threat is coming, but they're more worried about each other right now," he said.

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Competition between cellphone companies is likely to mean cheaper prices for consumers, especially when you add Internet technology, according to USA Today.
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2014-27-12
Wednesday, 12 February 2014 07:27 AM
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