Over the last few years, cable TV companies like Comcast and Spectrum have dived into offering wireless services. These companies hope that they can help offset losses in TV by becoming your wireless phone provider.
Comcast and Spectrum have worked hard to bundle their wireless phone offerings with home internet and TV services. Recently Spectrum even offered a free year of wireless service if you bundled it with their broadband internet. Comcast copied this offer to help lock in customers.
Spectrum and Comcast have also offered deeply discounted promotional rates on new wireless plans. The catch is in a year or so, these deeply discounted promotional offers expire, and you see a sudden jump in price, according to Fool.com.
T-Mobile’s CFO says Comcast and Spectrum are making a major mistake by offering deeply discounted wireless offers that become a lot more expensive in a year or so. According to T-Mobile, they find many customers who come for a deeply discounted promotional offer will leave when that offer ends.
There is a lot to support T-Mobile’s argument that this plan won’t work in the long run. Recently we learned that Spectrum’s average revenue per user declined 12% year over year for its wireless business.
T-Mobile is betting on its price lock guarantee, offering customers a set price that won’t jump up in price in a year. Well, it may not look as cheap as something Spectrum and Comcast is offering T-Mobile hopes it will lock in customers who won’t jump ship after the first year.
There is a flip side to this T-Mobile is also now going after Spectrum and Comcast’s very profitable home internet market. With a $ 50-a-month 5G home internet service, T-Mobile hopes to pull a large number of customers away from more expensive home internet services.
For now, we will have to wait and see if T-Mobile or the cable companies are right here. Is a fixed price lock plan the right way to go, or will deeply discounted promotional offers be the winner in the long run?