Light Reading
UBS analyst says it could be an unhappy Halloween for the wireless margins of larger carriers as T-Mobile preps the next stage of its 'Un-carrier' strategy

Is T-Mobile Planning a Fright Night for Rivals?

Dan Jones
8/9/2013
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Don't look now but phase three of the T-Mobile US "Un-carrier" strategy could come as soon as Halloween.

In a research note Friday, UBS Investment Research analyst John Hodulik writes that T-Mobile's subscriber success in the second quarter means "more upside" for T-Mobile's shares, but is a "bad omen" for investors looking for higher margins from the larger wireless operators. (See T-Mobile Adds 1.1M Subs.)

He writes:

    T-Mobile has emerged as an aggressive share-taker far sooner than expected and porting ratios in July suggest the worst may not be over. The Un-carrier 3.0 launch, expected by Halloween, will be another shot across the bow, forcing the larger carriers to sacrifice margins and/or share. Layering on a resurgent Sprint in 2014 makes higher wireless margin estimates start to look like a stretch.


T-Mobile CEO John Legere boasted of having the next phase of the operator's revamped strategy all planned out at its JUMP launch event in July. (See T-Mobile: Might As Well JUMP.)

If phase one of the strategy was to drop contracts and get started on its LTE deployment, and phase two initiated a trade-in program and more widespread LTE, what could phase three mean?

I reached out to Hodulik on this, but drew a blank -- financial analysts don't usually like to talk outside of school.

On the technical side, I expect T-Mobile will likely be covering 200 million potential customers with LTE by Fright Night, and that the first features of LTE-Advanced would be supported by handsets in the U.S. by that time too.

I must admit that I'm a little stumped on what T-Mobile could do further to jazz up its pricing schemes. It seems to me that an even more aggressive trade-in scheme targeting AT&T users might make sense, but I'm really just spit-balling here.

What ideas, readers?

But the real question is -- what the hell will T-Mobile's ebullient and sweary CEO, John Legere, dress up as for Halloween?

As ever, you're welcome to guess away on that topic too.

— Dan Jones, Site Editor, Light Reading Mobile

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DanJones
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DanJones,
User Rank: Blogger
8/15/2013 | 11:20:30 AM
Re: T-Mobile 3.0
Well T-Mobile at least seems to be deploying in cities rather than Sprint's strange small town LTE deployments. For many, good coverage in the major cities is the priority.
KBode
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KBode,
User Rank: Light Sabre
8/15/2013 | 11:08:36 AM
Re: T-Mobile 3.0
Thought it was interesting Hodulik was also weirdly bullish about Sprint in his most recent research notes, even though Sprint's coming in last place in so many LTE speed rankings of late, and their LTE coverage maps have been criticized as being, if I recall correctly, "total fantasy."

I still wonder if these unlimited plan options stick around. Historically I've found that the more companies try to compete with AT&T and Verizon, the more they start acting like them to keep pace. Fewer perks, more weird fees, etc.

Sprint's been doing more of that stuff over the last few years.

T-Mobile seems seriously intent on being disruptive, though I wonder how long that really lasts. It does seem to come down to coverage, and I still don't think Sprint or T-Mobile are anywhere close to AT&T and Verizon out on real-world U.S. highways.
DanJones
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DanJones,
User Rank: Blogger
8/15/2013 | 10:18:28 AM
Re: T-Mobile 3.0
Could be! I don't see investors -- as opposed to customers -- loving that though.
milan03
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milan03,
User Rank: Light Sabre
8/15/2013 | 3:22:14 AM
Re: T-Mobile 3.0
Actualy UnCarrier 3.0 has to be T-Mobile paying your full ETF, then laying down the ETF financing plan to switch to T-Mobile. They'd make a payment in full on your behalf to the carrier you're getting out of, then you're repaying over 24 months.
milan03
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milan03,
User Rank: Light Sabre
8/15/2013 | 1:06:40 AM
T-Mobile 3.0
It'll be very interesting to see what's up their sleeve this time! T-Mobile most definitely looks to be the most disruptive wireless operator of 2013.
timkridel
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timkridel,
User Rank: Light Beer
8/13/2013 | 3:58:08 AM
re: Is T-Mobile Planning a Fright Night for Rivals?
From my March 2013 Heavy Reading Insider report:

"There's a strong future for 2G with us," says Rusty Lhamon, T-Mobile USA director of M2M. "In M2M, we see this as something that's expanding as we look at some of our competitors sunsetting their 2G networks, and they're looking for a soft spot to land."
DanJonesLRMobile
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DanJonesLRMobile,
User Rank: Light Sabre
8/10/2013 | 9:08:07 PM
re: Is T-Mobile Planning a Fright Night for Rivals?
Yeah, this is the way I see it. Shows you how much the supposed wisdom of the market really exists because I remember Sprint undertaking aggressive pricing schemes before and getting slammed by Wall Street for having deadbeat customers.
DanJonesLRMobile
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DanJonesLRMobile,
User Rank: Light Sabre
8/10/2013 | 5:37:41 PM
re: Is T-Mobile Planning a Fright Night for Rivals?
Gotcha, well that was part of the point of the point of the MetroPCS acquisition, get more spectrum for upgrades. Seems like they're upgrading the cities with LTE first though.
Matthew Prendergast
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Matthew Prendergast,
User Rank: Light Beer
8/10/2013 | 2:46:16 PM
re: Is T-Mobile Planning a Fright Night for Rivals?
Nah, I think they will offer a similar deal like jump with your current non-t-mobile contracts. Maybe something like, T-mobile will pay off your contract for an additional amount of money a month plus a lower cost upgrade or free phone. Saying something is done ahead of time is nice but John has been announcing major deals, not just "Hey were ahead of schedule!". Whatever it is, it will be for the consumer which is fantastic.
CPPCrispy
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CPPCrispy,
User Rank: Light Beer
8/10/2013 | 1:13:54 AM
re: Is T-Mobile Planning a Fright Night for Rivals?
What I meant by my original comment is that T-Mobile has a vast 2G network that they need to upgrade (replace) to HSPA+/LTE and that hopefully they will announce their upgrade plan with phase 3. I agree that no carrier is upgrading 2G but before T-Mobile can move customers off 2G they need to implement HSPA+/LTE network wide.
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