AT&T offers T-Mobile customers $450

ATT is already bigger than T-Mobile. But that isn’t stopping Ma Bell from trying to lure T-Mobile subscribers to switch to ATT.

The war for mobile customers is heating up with ATT making this pitch directly to T-Mobile customers: Switch to us and get $450.

It’s not cash. ATT (T, Fortune 500) is offering T-Mobile (TMUS) refugees a $200 credit per phone line, plus the chance to trade in their smartphones for up to $250.

It’s the latest in the battle between ATT and T-Mobile, the underdog that’s been hounding its larger rival on every front.

With its very public “uncarrier” strategy, T-Mobile has set its sights on ATT as well as Verizon (VZ, Fortune 500). First, T-Mobile eliminated contracts, opting instead for customers to pay lower monthly rates and buy their own phones. Then came the “Jump” program, which allows customers to upgrade phones twice a year. Then T-Mobile killed roaming fees and slashed per-minute and text charges.

ATT is fighting back by appealing to T-Mobile customers’ wallets. But the company’s announcement didn’t make clear how long the $450 offer would last.

T-Mobile is currently the fourth largest wireless company in the U.S. But it has always been viewed as a possible takeover target.

In fact, ATT and T-Mobile agreed to a $39 billion merger in 2011 but ATT wound up scrapping the deal once it became clear that regulators would block it. Now there is speculation that Sprint (S, Fortune 500), the nation’s third largest carrier, may want to buy T-Mobile.

Shares of T-Mobile fell nearly 4% in early trading Friday. But the stock is up more than 20% in the past month due to the reports of a possible Sprint takeover. To top of page

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