T-Mobile Offers Strong Incentives to Ditch Rivals' Wireless Contracts

NEWS ANALYSIS: An aggressive T-Mobile CEO John Legere takes on the rest of the wireless industry in a profane call for action to consumers who want out of their current wireless contracts.

At T-Mobile's Jan. 8 press conference, CEO John Legere, best described as moderately profane and unabashedly pugnacious, challenged the other carriers for practices that he condemned as unfriendly to consumers. He heaped particular scorn on Sprint, which he described in words that my editors won’t allow and took on Verizon's family plans.

But first Legere derided AT&T's "bulls*** roaming charges," excoriated Sprint for having LTE speeds so slow they're only half as fast as the next fastest and denounced AT&T for claiming they have the fastest LTE. Legere even said he was going to send a cease-and-desist letter to AT&T demanding they stop advertising that their LTE is faster than T-Mobile's.

But this was just the appetizer. Next he went on the attack. He introduced a new incentive plan designed to cover the complete cost of moving from another carrier to T-Mobile and even sweetened the pot with a small profit for users moving to T-Mobile.

In the process, Legere also proved that I was only half right when I predicted a $350 incentive to people changing lines to T-Mobile. The reality is that T-Mobile, in its Un-Carrier 4.0 plan, will pay that $350 to reimburse early termination fees, plus up to $300 for the value of a phone that customers would otherwise be forced to pay off for leaving their contract early. That means that T-Mobile is offering up to $650 per person to transfer a family or an individual plan to T-Mobile.

After his press conference, during which Legere made so many disparaging comments about rival Sprint that I lost count, he also addressed unceasing talk that Sprint was planning to take over T-Mobile. "T-Mobile, the people, the business, we're here to stay. What we're doing will prevail." The emphatic way he said it made me wonder whether the reality might be just the opposite—that T-Mobile wants to take over Sprint.

Legere even hinted at such a possibility when he referred Sprint as "a pile of spectrum waiting to be turned into a capability."

But what's probably more important is the peek into T-Mobile's next quarterly report, in which Legere said that the company would report a subscriber growth of 1.6 million in the last quarter and 4.4 million net additions in 2013. "We've added more phone customers in 2013 than everybody else combined," Legere said.

It's hard to know for sure why T-Mobile has added so many customers, although there's probably more to it than just a great deal on family plans. Striding the stage with his trademark magenta T-Mobile T-shirt, swigging on a can of Red Bull, his speech laced frequently with S-bombs, it's clear that Legere is aiming at something besides the usual wireless demographic.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...