T-Mobile: Might As Well JUMP
"We are going to redefine a stupid, broken, arrogant industry," Legere declared at the carrier's JUMP plan and LTE launches in New York City on Wednesday, while claiming that other carriers' two-year contracts are "bullshit" designed to just "pick the pockets dry" of their customers. [Ed note: Legere relishes a well-delivered swear word almost as much as Virgin Media Inc.'s Richard Branson.]
T-Mobile dropped its fixed-term contract plans as part of its "Uncarrier" strategy plans. (See T-Mobile Kills Contracts, Launches LTE Network.)
Now, T-Mobile's JUMP plan allows existing T-Mobile customers to pay US$10 extra a month and then trade in their old handset for a new smartphone (at a subsidized price) twice a year if they wish. The handset needs to "boot up," not have a cracked screen or serious water damage to be acceptable as a trade-in. If it's not in an acceptable condition, users will pay a "deductible" of up to $170 to get a new device. Just as important is the revamped family plan. T-Mobile is offering four lines, 500MB of 4G data and unlimited talk for $100 a month. A key differentiator, as executives noted, is that T-Mobile isn't doing a credit check on the family plan.
Legere said T-Mobile's "Uncarrier" strategy is already winning over customers: He claims T-Mobile was the number one in net new customer adds in New York in May, adding 56,000 names to the customer base.
Although Legere luvs to direct his vitriol towards AT&T Inc., it became clear to me that Sprint Nextel Corp. might have the most to fear from a revitalized T-Mobile.
It hadn't escaped T-Mobile's gaze either. CTO Neville Ray made a crack about how T-Mobile is already offering LTE service in Manhattan, New York City, while Sprint is still talking about Manhattan, Kansas. (See Sprint LTE: First, We Take Manhattan (Kansas).)
Certainly, Sprint already seems to have noticed a change in the weather, too. (See Sprint Fires Back at T-Mobile With Unlimited Guarantee.)
Legere might do well to remember a lesson from Sprint's past, though. Years ago, before Dan Hesse, before Network Vision, before any of that, Sprint was spanked by Wall Street for having deadbeat, no-credit customers. Legere says smartphones are iconic brands now and they can make a business selling refurbished devices as well as new units.
That's a claim worth keeping an eye on, I'd say.
— Dan Jones, Site Editor, Light Reading Mobile