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T-Mobile USA's CFO Explains the Financial Impact of its Buy-Out Offer

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T Mobile USA has explained some of the thinking behind its plans to offer to buy out a customer's cost of migrating to its network, saying that the headline rate is rarely expected to be achieved.

The company promised up to US$350 to customers switching from rival networks in the form of paying their early termination fees and offering trade-ins on old handsets.

However, the company's Chief Financial Officer told Cnet that it is unlikely that many customers would be in a position to take up the full transfer fee.

CFO Braxton Carter estimates that the average fee would be somewhat closer to US$150 as most customers would be deep into the contracts when considering switching, or might not have to pay an ETF at all.

They also expect to recoup some of the costs from the handset trade-in, as the phones are likely to be fairly new if still inside a contract, and hence resalable later.

Carter said he doesn't believe the move will affect the company's longer term revenue or profitability, although he accepted that there might be a short term hit.

On the web: Cnet

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Tags: t-mobile usa  USA