The iPhone factor in Deutsche Telekom AG (FRA:DTE) brand loyalty – PCS

Northern, WI 04/05/2013 (usastockreport) – T-Mobile USA is drawing-out all stops to attract customers and its strategy is working. It is the wireless arm of Deutsche Telekom AG (FRA:DTE) ( Current : $8.50, Down by 0.33%) had axed prices and is all set to offer the iPhone. The company has seen a distinct rise in brand loyalty in its first quarter. According to the results that were released, T-mobile had been affected by customer defection and the rate had increased from 1.9 percent per month and touched 2.5 percent in its fourth quarter, for its contracted customer business. . It was critical for the company to plug the leak and it will have to maintain momentum.

Changing strategies

T-mobile has reduced the rates of its service plans and is also upgrading its customers’ services to LTE (Long Term Evolution), the networks that stream music and deliver videos to users of smartphones. The company launched new contract plans with unlimited calling offers and 500 MB data at 450 per month. They have also moved away from the traditional form of combining mobile phone costs and service payments. T-Mobile needs to have a stronger presence in the market and prove its sustainability specifically due to the fact that Deutsche Telekom AG (FRA:DTE) is planning a merger with MetroPCS Communications Inc (NYSE:PCS) (current: $11.12, Up by 1.46%).

Building its strength

Having a strong T-mobile will help them in convincing their prospective partner of their stability and worthiness. April 12 is when the Metro PCS shareholders will be casting the merger vote. If Deutsche Telekom sails through the merger, it stands to gain a $15 billion loan from Metro. The latter will get a 75 percent stake in the converged company. Paulson & Co which is a Metro PCS shareholder is of the opinion that this deal will burden the new company with a hefty debt and two out of the three shareholder advisory firms will not be voting in favor of the deal.

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