T-Mobile Enters the 5G iPhone Giveaway Battle a Day After Rivals

(Bloomberg) -- It took a day, but T-Mobile US Inc. has entered the iPhone 12 giveaway sweepstakes.

On Wednesday, T-Mobile introduced its own free iPhone 12 offer for new customers, at least those with qualifying trade-in phones. The iPhone 12 retails for about $800, but carriers view that as a marketing cost in their quest for subscribers.

Apple Inc.’s introduction of its first 5G iPhones on Tuesday has sparked an immediate promotional blitz pitting T-Mobile against AT&T Inc. and Verizon Communications Inc., with each now offering free iPhone 12s to customers with unlimited data plans.

“It’s perplexing how T-Mobile didn’t have its iPhone offer ready until day two,” said Walt Piecyk, an analyst at Lightshed Partners.

T-Mobile had a free iPhone offer ready, but with the online ordering not starting until Friday, AT&T and Verizon “jumped the gun,” Chief Executive Officer Mike Sievert said in an interview on Bloomberg TV Wednesday.

Shares of T-Mobile, the No. 2 U.S. wireless carrier, fell 4% to $116.67 Wednesday in New York. They have gained 49% this year.

The new, redesigned iPhones are expected to kick off a strong 5G phone-upgrade cycle despite the economic pressures caused by the Covid-19 pandemic, especially with all three major carriers feeling compelled to offer them for free early on.

Three years ago, Sievert said such giveaways weren’t “a good way to get people to switch,” Piecyk said. “And now, here we are right in the middle of it again, and this time it’s even worse.”

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