BlackBerry Ltd Users Offered $100 Credit By T-Mobile

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BlackBerry Ltd Users Offered $100 Credit By T-Mobile
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has officially parted ways with T-Mobile US Inc (NYSE:TMUS), and now the U.S telecom carrier is doing its best to retain BlackBerry users. T-Mobile announced Thursday that it will offer $100 credit to existing BlackBerry users towards any new smartphone, including the Z10 and Q10 through this year. T-Mobile chief executive John Legere said he was disappointed with the Canadian company’s decision to split with the telecom carrier.

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BlackBerry and T-Mobile’s strategies no longer complementary

On Tuesday, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) CEO John Chen decided not to renew its contract with T-Mobile US Inc (NYSE:TMUS) when it expires on April 25. Their relationship soured in February when T-Mobile sent out an email to BlackBerry users, pitching a free iPhone 5S and saying that it was a “great offer for BlackBerry customers.” The controversy exploded when T-Mobile’s loyal BlackBerry customers expressed their anger at the offer. John Chen criticized the move as “anti-BlackBerry, inappropriate, and ill-conceived.”

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At any rate, the fourth-largest U.S. telecom carrier said that it will continue to support BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) products. In February, the company launched a limited period trade-in offer of giving owners of used BlackBerry phones a $200 credit for buying a new smartphone. Those opting to buy a new Z10 and Q10 were given  $50 extra. But John Chen said on April 1 that he had to terminate the contract because the two companies’ strategies are no longer complementary.

Parting ways with BlackBerry to generate immediate cost savings for T-Mobile

However, John Chen said that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) will continue to work closely with T-Mobile US Inc (NYSE:TMUS) to offer services to its existing customers on the network, and to new customers who purchase smartphones from T-Mobile’s existing inventory. The split is unlikely to affect the U.S. carrier in a big way. Over the past few years, the share of BlackBerry sales relative to overall sales has been declining. In fact, the move would result in immediate cost savings for T-Mobile because it was required to pay a “service access fee” to the Canadian company for every BlackBerry device it sells.

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) stock was down 0.36% to $8.19 in pre-market trading Friday.

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3 COMMENTS

  1. My understanding is that the Service Access Fee was for BIS only. BB10 devices don’t use BIS. If T-Mobile continues to sell the devices for the next year, they will still have to pay that fee.

  2. Did I read this right? Did T-Mobile. Say due to Blackberry’s decision that they are going to be saving money now, due to “a service access” fee that Blackberry charges?? Does this mean other carriers may follow suit and disengage with BlackBerry as to save money also? I wonder how much the carrier saves due to this move? This will certainly alter the way I invest.

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