T-Mobile disclosed in an interview how it’s going to be able to sustain its $650 per line early termination fee (ETF) buyout plan it now offers to customers that bring over their family plans for competing carriers. The carrier told CNET that while it’s ready to pay up to $350 per line for up to five lines and offer credit up to $300 for the old phones users trade-in, the actual numbers it will pay out will be a lot smaller.
T-Mobile’s Chief Financial Officer Braxton Carter said that T-Mobile will pay an average of less than $150 per line, as most customers that will make the switch are well into their contracts, which means their ETFs will be lower than the advertised $350 maximum. He further added that T-Mobile’s program will actually require users to turn in their current phone, which the mobile operator will refurbish and resell. Carter said that while the company may take a hit in the short-term for customers that switch over, he doesn’t believe T-Mobile’s long-term revenue will be affected in the long term.
T-Mobile isn’t the only carrier looking to steal more subscribers from the competition. Even before T-Mobile unveiled its Uncarrier 4.0 initiative at CES 2014, AT&T has kicked off a promotion that awards up to $450 per line to customers that switch over from T-Mobile, while Sprint has launched a new Framily Plan that allows up to 10 users to join in under the same plan in order to save on their monthly cellular bills.