Offering Shares To Subscribers Appears To Be The Most Innovative Promotional Measure By T-Mobile

T-Mobile US Inc., the US chapter of T-Mobile International AG, a Deutsche Telekom AG subsidiary for outside Germany, has been planning for converting its monthly subscribers into shareholders. The no. 3 US wireless provider intends to offer share in the company’s stock to its 10 million monthly subscribers for free. The planning appears as part of the fast growing company’s broader attempts to get triumphed over the industry rivals.

The Bellevue, Washington based company will offer a full share of T-Mobile US common stock to its existing and new postpaid service consumers, suggests a company statement. The ‘Stock-up Plan’ unveiled by the self-proclaimed ‘Un-carrier’ is not applicable for its prepaid users. Following publication of the company announcement, its share prices have been decreased by 1.3% to $43.07 during the closing hour of June 6, reports Reuters.

John Legere, chief executive of T-Mobile has represented the planned move as an unprecedented one in the corporate history while responding to a media call after the announcement. The wireless network operator in the US is widely familiar for its innovative business promotional measures.

The recently announced program also offers opportunity for earning more shares through referring new customers. The networking giant offers free video streaming options, gifts and tie-ups with ticket agency StubHub. Its customer friendly data plans are often replicated by the industry rivals, according to a report published in BBC.

Incumbent wireless network operators in the US have started alluring rival carriers’ customers with free gifts like pizza, movies and frozen desserts. In a bid to retain the existing customer base in place, T-Mobile US approaches with an apparently innovative move that transforms the users into owners through rewarding with company shares. However, Financial Times considers the move as more gimmick than innovations since it enjoys the legal firepower clearing the regulatory hurdles.    

Under the dynamic leadership of Legere, T-Mobile has adopted series of consumer friendly offers over the past three years. The adopted measures has enabled T-Mobile increasing market stake in the supersaturated US wireless market after Verizon Communication Inc and AT&T Inc.

The statement also announces launching ‘T-Mobile Tuesdays app’ that will offer weekly perks to the postpaid and prepaid customers. Such perks will include offering free food through Domino’s Pizza Inc., ride shares through Lyft under partnership program. Furthermore, the US wireless giant will offer free Wi-Fi to customers on domestic flights having Gogo Wi-Fi connectivity.

An existing postpaid user will be able to hold up to 100 shares through successful referrals. The ‘Stock-Up Plan’ waives charge for selling the single share for 12 months after which the consumers will have to pay the fee of $5. Analysts predict, T-Mobile needs to craft more generous offers during the coming days just to retain its market stake.  

If T-Mobile fails in its efforts to retain the market stake, the anno

unced offer will still remain as an instance of interesting social experience. Behavioral economists will definitely get attracted to study the case since the offers include potential long term benefits of share ownership as well as short-term incentive like free pizza. However, free pizza offer will be more lucrative to the majority of users while some greedy consumers are expected to stock up the both, opines Financial Times.

The free offers will increase the company expenses to some extent, but Andrew Sherrard, chief marketing officer of T-Mobile considers it as a suitable investment. The German owned wireless carrier has been able to manage 2.2 million fresh customers during the first quarter ended on March 31. However, no new share will be issued to implement the ‘Stock-Up Plan’, reveals T-Mobile CEO while addressing the media call.