T-Mobile Uses Aggressive Pricing, Free Roaming to Overtake Sprint

By Wayne Rash  |  Posted 2015-08-05 Print this article Print
T-Mobile Tops Sprint

While T-Mobile doesn't offer a two-way radio function, it does offer what is essentially a business version of its personal mobile plans. These plans include the same roaming features, the same free data internationally and the same aggressive pricing on phones and devices.

T-Mobile still doesn't have the ubiquitous coverage of Verizon, but its LTE coverage is much better than Sprint's. Because of this, Sprint customers have a realistic upgrade path by going with T-Mobile, which will help keep costs competitive while also offering decent coverage and better pricing internationally compared with Verizon.

Whether Sprint can reverse course quickly and aggressively enough to catch up to T-Mobile remains to be seen. So far, Sprint has seemed to be caught short by T-Mobile's series of "UnCarrier" moves, which seem to pop out of the Seattle area headquarters relentlessly. Although Sprint seems to be willing to match those moves in some way, usually a few weeks later, the company hasn't shown any market leadership.

However, T-Mobile can't price-cut its way to dominance forever, either. So far, much of T-Mobile's growth has been based on budget pricing as a way to attract consumers. The company has coupled that with features such as free data for music, free roaming for North America and discounts on phones and devices. As T-Mobile continues to grow and challenge larger competitors, they, too can play that game.

But whether Sprint can play the discount game is another matter. The company's balance sheet shows it has relatively small reserves to use for buying market share. Its purchase by Japan-based Softbank has reduced Sprint's telecom market flexibility because it now has an owner, Masayoshi Son, who apparently has no grasp of what it takes to compete in the large and diverse U.S. telecom market. Worse, Sprint also has to compete with the top telecom market leaders, which are major players globally.

What this means is that Sprint is probably going to be the No. 4 wireless carrier for a while. There's every indication that T-Mobile plans to keep on attacking its next largest competitors directly as they continue to try to grow. In fact, in a Tweet issued after announcing quarterly results, T-Mobile’s Legere warned AT&T that they were his next target.

There is another factor that could disrupt T-Mobile's growth plans. There are persistent rumors that T-Mobile is in talks with Dish Network to merge. On one hand, a merger would give T-Mobile access to vast amounts of wireless spectrum, something T-Mobile needs badly.

On the other hand, depending on how the merged companies are organized, a merger could negatively impact T-Mobile's agility, which has been a major factor in T-Mobile's brash and relentless expansion.



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