T MOBILE US INC (TMUS) Needs a Long-Term Plan

Whatever the cause, these frequent price changes are unlikely to lead to a good result for T MOBILE US INC (NYSE:TMUS). While T-Mobile is trying to create an innovative business model, industry behemoths Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) have shown a willingness to mimic the most popular elements of its plans. For example, both Verizon and AT&T came out with their own early upgrade offers within weeks of T-Mobile unveiling its JUMP plan . While T-Mobile seems to be offering better terms than Verizon or AT&T, the gap is narrow enough that it will be hard for T-Mobile to pull longtime customers away from its rivals.

T MOBILE US INC (NYSE:TMUS) isn’t going to be able to gain a competitive advantage over Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) by changing pricing and other aspects of its plans every month or two. Running a short-term promotion may boost sales a little bit, but the risk is that it undermines the brand’s message. T-Mobile’s new mindset is a refreshing change of pace for the wireless industry. Management just needs to pick a price scheme and give it time to work. Otherwise, would-be customers are bound to lose patience.

Fool contributor Adam Levine-Weinberg owns shares of Apple and is long January 2015 $390 calls on Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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