T-Mobile's ebullient chief is predicting that rivals Verizon and Comcast will "consider" merging this year, while it offers customers more ways to simplify their bills in the latest installment of its "Un-carrier" strategy.
T-Mobile US Inc. CEO John Legere, along with CTO Neville Ray and CMO Mike Sievert, took to the stage in Las Vegas today to announce its "Un-Carrier Next" plan. Sievert said this gambit would deliver "radical simplicity" in billing for customers new and old.
But, as has now become traditional at this CES event, Legere's long press conference and Q&A session covered many topics, including some interesting predictions on the future of the industry in what Legere promises will be a year of "craziness."
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Most notably, Legere says that this year Verizon Communications Inc. (NYSE: VZ) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) "will consider combining," which -- if it came to pass," would create the "most hated company" in America, an entity that he dubbed "Vericast."
Verizon already has a mobile network virtual operator (MVNO) deal with Comcast and Charter Communications Inc. This means that the US's two biggest cable companies will operate their own branded wireless services over Verizon's mobile networks.
Legere welcomed the new rivals but suggested that the MVNO deals would be a bust, because competition is already so fierce in the mobile business and the cable operators are "worse than dumb and dumber," Legere's pet name for AT&T and Verizon, at innovation.
"Bring the fuckers in, stick 'em on the pile," he said of the new rivals, while predicting that Comcast and Charter will "fail horribly" at the MVNO game and be "in full retreat" from the deals by CES 2018.
He also predicted that "Google is coming in," although he doesn't know how yet. This wouldn't be totally beyond the pale, since Google (Nasdaq: GOOG) already has its own "Fi" MVNO, the Pixel phone, and the Android ecosystem behind it. Such a move would, however, likely require significant investments in either building or buying in network infrastructure and spectrum.
The CEO danced around the renewed question of a potential merger between Sprint Corp. (NYSE: S) and T-Mobile, noting that it is not something that T-Mobile needs to do but is "one possibility" in a number of how the industry evolves.
Legere reiterated his CTO's claims that the magenta operator will be the first to deliver 1-gigabit downloads on its "public network" in 2017, part of a general mantra that, despite 5G, LTE will be a major field of competition for US operators over the next decade.
"LTE has got legs," CTO Ray reminded the crowd, sadly not to the strains of the ZZ Top song of the same name.
Gigabit LTE has already become a marketing buzzword for US carriers in 2017, although, as usual with wireless, the concept is over-hyped. Consumers like you and me will get a performance boost on the upgraded LTE networks, but it won't really deliver true gigabit speeds over the air. (See AT&T Gets in the Gigabit LTE Race and T-Mobile: We'll Beat US Rivals to Gigabit LTE Launch for more technical details on the reasons why.}
Un-Carrier Next Further simplifying customer bills was the theme of the latest un-carrier announcement. "The mobile Internet is the Internet... but carriers are still charging by the bits and byte... These rules were created a generation ago... We need new rules," Legere stated.
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To that end, T-Mobile will stop selling anything but its T-Mobile One unlimited plan to new customers. This is priced at $70 a month for a single line, or $40 a line for a family of four. (See T-Mobile Goes OTT With Free Video Streaming.)
"On January 22nd, all we will sell is T-Mobile One. [Existing] customers, of course, can keep what they have, but that's all we'll sell," Legere says.
Further to that, as of that date, the sticker price will be the full price charged. T-Mobile says it is rolling the taxes into the top-line price, so $70 a month will mean $70 a month. Carriers currently charge a total of $17.2 billion more than what they advertise, T-Mobile claims.
"I want the carriers to copy everything that we do," Legere stated, saying that he wanted to bring everyone in on T-Mobile's latest move.
Legere started off the event by reminiscing about how the "Un-carrier" strategy had evolved over the last four years from getting rid of early termination fees, international roaming fees, to free data plans. The CEO says that T-Mobile has dragged the rest of the mobile business along with it.
Four years ago, he suggested, most people thought then-failing T-Mobile was loco to ditch two-year contracts. "Everyone thought I was nuts, including, by the way, our own board of directors. I almost didn't make it through that phase," he noted.
Like many in the industry now though, Legere is also looking at how the incoming Trump administration in the US might affect the wider industry. He echoed earlier comments by T-Mobile CFO Braxton Carter about the possibility of Trump being an agent of change. (See T-Mobile CFO on Trump: Expect More Consolidation & More Competition.)
"Our planning for 2017 is being boosted by the anticipation of a good economy and a more conducive regulatory environment," Legere said. He added that he hoped to speak to Trump about the industry in the future.
Trump, however, has usurped Legere on one of his very favorite forms of communications, the CEO humorously noted. "I am one of the kings of mean on Twitter, but I've been replaced in role," Legere smirked.
— Dan Jones, Mobile Editor, Light Reading