AT&T's latest business discount is a 2-for-1 smartphone deal

Move is seen as way to bolster AT&T's slipping subscriber numbers and clear out Samsung inventory

galaxy s6 active

AT&T is offering special deals on Samsung devices, including the Galaxy S6, as it seeks to clear out inventory and boost subscriptions.

Credit: AT&T

AT&T on Wednesday announced aggressive discounts on new smartphones and devices, including a 2-for-1 smartphone offer for business customers.

A big focus of the AT&T discounts is special deals on Samsung's Galaxy smartphones and Gear S2 smartwatches. Analysts interpreted that focus on Samsung devices as a way to clear out inventory prior to expected upgrade announcements coming in late February at Mobile World Congress in Barcelona.

AT&T is also facing pressure to add more subscribers, as analysts -- including Evercore ISI this week-- have predicted AT&T's fourth-quarter postpaid subscriber loss will be more than 300,000. That comes amid reports that T-Mobile added 4.5 million net subscribers for the fourth quarter and Verizon Wireless added 525,000.

All the major carriers, including AT&T, hit the December holidays with special device deals, but AT&T apparently didn't feel enough impact on its inventory from those offers, analysts said.

AT&T and Samsung are motivated to get rid of all the old inventory before new models arrive, said Patrick Moorhead, an analyst at Moor Insights & Strategy. "Retailers won't run such an aggressive promotion unless they have a lot of stock."

An AT&T spokeswoman provided a different explanation: "Due to popular demand, AT&T is bringing back some of its holiday promos."

Those promos -- available to both consumers and business customers at AT&T retail stores -- include a free Samsung Gear S2 smartwatch for a limited time to any customer buying a Samsung Galaxy smartphone, or a free Samsung Galaxy Tab 4 for buying a Galaxy smartphone on an AT&T Next wireless plan. AT&T is also offering an iPad mini 2 for $99 when a customer buys a new iPhone on the Next plan.

For business customers, the 2-for-1 smartphone deal is new. It allows business customers to buy a new smartphone and then get another smartphone, valued at up to $650, for free. The deal applies to the most popular smartphones, including the Galaxy S6 or S6 Active, a dustproof and waterproof device, as well as the iPhone 6S.

To qualify, business customers must buy a Mobile Share Value Plan for Business or a Mobile Select voice and data plan for each phone, each at a minimum of $70 a month.

"A free second phone means that AT&T is getting two line charges instead of just one, giving business users an incentive to get two wireless lines," said Jack Gold, an analyst at J. Gold Associates. "This is a small business play primarily, but not a bad marketing incentive."

With the deal, Gold also said that AT&T is "feeling some pressure from T-Mobile and they have to react." In addition to increasing its overall subscribers, T-Mobile has made a special push over the past two years to get more business customers. In December, T-Mobile CEO John Legere predicted the carrier would double the number of its small and mid-sized business customers.

Fiber network expansion for business customers

Separate from the 2-for-1 deal, AT&T also said Wednesday that its fiber-optic network expansion, which began in 2012, has the capability to connect an additional 1 million business customer locations. The AT&T U.S. fiber network now totals about 500,000 miles in 21 states, with 76,000 miles added in the past three years.

AT&T named three fiber customers in a statement: Pixelbox Visual Design, Primary Care Associates in Ohio and Cushman & Wakefield real estate investors. Customers cited the ability of the fiber network to move big files faster.

The march toward exascale computers
View Comments
Join the discussion
Be the first to comment on this article. Our Commenting Policies