T-Mobile’s “Kids Are Free” Promotion Offers Free Additional Lines Through the End of 2011

Event Summary

September 08, 2010 -- T-Mobile has announced a new “Kids Are Free” promotion on all Even More and Even More Plus family plans. This allows family plan customers to add up to three additional lines to their plans with no charge. The promotion runs through the end of 2011. Once the promotion runs out, the price of the additional lines will revert back to $5 per month. Customers still have to pay for additional features such as unlimited data plans on all free additional lines. The promotion is available in all T-Mobile markets.

Quick Take

Analytical Summary

• Current Perspective: Positive on T-Mobile’s launch of its new “Kids Are Free” family plan promotion, since this is the first time that a U.S. carrier has allowed customers to add more lines of service to an account without paying an additional monthly charge of $5 to $10 per line. Having a free additional line promotion will be a strong marketing differentiator for T-Mobile against its competition, and it will help retain existing customers and give potential new customers with several family members a strong carrot to choose T-Mobile. However, since the offer only lasts for just over one year, the positive effect will be somewhat blunted.

• Vendor Importance: High to T-Mobile, since the carrier has struggled over the past year in the face of slow customer growth and relatively high churn. Having a strong differentiator in the family plan space beyond just a slightly cheaper entry price should help T-Mobile going into the holiday season.

• Market Impact: Moderate on the wireless services market, since leading national carriers AT&T and Verizon Wireless have not been directly competing with T-Mobile on price for some time. As a result, T-Mobile’s “Kids Are Free” additional line promotion is unlikely to elicit a direct response from those carriers. However, the offer could force Sprint, which has focused on combined voice, data, and text family plans, to drop the $9.99 to $19.99 rate it charges for additional lines.

CLIENTS ONLY

Competitive Positives and Concerns

Response & Recommendations

Buyer Actions

Analytical Perspective

| Client access - Full report in Consumer Services - U.S. | More information

Top