GlobalData’s latest analysis of US handset promotions data reveals a dynamic landscape for carriers in Q2 2024, highlighting significant changes in strategies aimed at retaining and attracting customers through compelling offers.

During Q2 2024, the market witnessed a diverse array of smartphone promotions, totalling 15 distinct types. Notably, free subscription promotions and trade-ins emerged as the most popular promotion strategies.

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Dissatisfaction with carriers

Traditionally favoured for premium devices, trade-in offers have long been pivotal in enticing customers. However, dissatisfaction among loyal users has grown due to perceived disparities in promotional values offered to existing users wishing to upgrade their device versus new line subscribers.

Verizon’s Bold Move

In Q2 2024, Verizon disrupted industry norms with its revamped trade-in promotion terms. The telecom giant now guarantees full promotional value for trade-ins, irrespective of model or condition, for customers purchasing premium smartphones such as the Apple iPhone 15 series, Samsung Galaxy S24 series, Samsung Z Flip5 and Z Fold5, and the Google Pixel Fold. This move represents a departure from previous practices where the highest tier premium plan subscriptions were often necessary to maximise promotional benefits.

AT&T’s Next Up Initiative

In a bid to enhance customer flexibility, AT&T introduced its Next Up initiative in June 2024. For a $10 monthly fee, customers can trade their phones up to three times within a rolling 12-month period, with remaining balances forgiven after paying 33% of the device cost. This program grabs those customers who want the latest and greatest and also pulls them out of the promotional upgrade cycle. This initiative builds on AT&T’s existing Next Up add-on, which allows upgrades after paying 50% of the device cost.

T-Mobile’s Customer-Retention Focus

T-Mobile also strengthened its customer-retention strategies during Q2 2024, particularly targeting its prepaid base. The enhancements include updates to the Smartphone Equality program, which now enables prepaid users to access the latest smartphones at competitive prices, regardless of credit scores or payment methods. Additionally, the launch of Metro Flex plans offers its prepaid subscribers the flexibility to upgrade their handsets every one, two, or three years, aligning their opportunities with those available to new subscribers.

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Industry outlook for carriers

These initiatives are expected to mitigate customer churn by providing existing users with compelling upgrade options. As cable telcos intensify their efforts with aggressive switcher programs and bundled offers, carriers face mounting pressure to retain customers approaching the end of their device upgrade cycles.

In conclusion, Q2 2024 marks a pivotal period for carriers in US smartphone promotions, characterised by innovative approaches aimed at enhancing customer satisfaction and loyalty amid intensifying competition in the telecom sector.