Graduation Year

Spring 2014

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Darren Filson

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© Ankit Sud 2014

Abstract

In 2013, T-Mobile began what it dubbed the “Un-carrier Revolution” in the US wireless telecommunications industry. In the program’s short history, the firm has been able to implement several drastic policy changes and, subsequently, add millions of subscribers while increasing its market value. Through an event study analysis, announcements of T-Mobile’s strategy can be analyzed with respect to changes in market value of the firm and its competitors. We determine that T-Mobile has succeeded in adding value through two strategies. First, firm value increases as a result of product quality enhancement (the addition of wireless spectrum). Second, T-Mobile’s competitors have been negatively impacted by its offer to pay early termination fees and, therefore, eliminate costs associated with leaving one’s current service provider. The implications of these results can inform future firm strategy and may be applied to other industry verticals.

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