If you checked in with us yesterday, you already know the gloves are off between T-Mobile and AT&T. The rivalry intensified overnight when T-Mobile CEO John Legere took the stage at CES to unveil the next phase of the company’s disruptive “Uncarrier” strategy — and to openly criticize an industry he called out for underperforming.
In short, T-Mobile is now offering up to $350 per person to switch from AT&T, Sprint, or Verizon. Trade in your phone, receive instant credit of up to $300, and you can leave with a current handset for $0 down.
Once you switch, you gain access to the benefits of T-Mobile’s rapidly expanding network — a point Legere emphasized repeatedly during his presentation.
AT&T reacted quickly, perhaps anticipating the move, announcing an incentive of up to $450 to attract customers switching from T-Mobile to their network. Legere responded on Twitter: “you gave us cash & spectrum AND we took your customers with #Uncarrier moves, do you really think you can buy them back?”
Onstage, he framed AT&T’s offer as an unintended endorsement of T-Mobile’s strategy: “We’re really happy AT&T has given us a no-fault guarantee — try what we’re doing and these pricks will pay you to come back!”
Legere contrasted T-Mobile’s approach to measuring network performance with AT&T’s. He said AT&T hires teams to drive in vans to sample speeds, while T-Mobile uses crowdsourced data from the Speedtest app to capture the real-world speeds actual users experience where they are.
The Speedtest figures presented showed average download speeds of 17.8 Mbps for T-Mobile, 14.7 Mbps for AT&T, and 14.3 Mbps for Verizon.
T-Mobile argued these numbers reflect consistent, reliable performance rather than isolated peaks. Legere even said he planned to send AT&T a cease-and-desist over claims that they have the fastest network.
“Do you know how many billboards they’re gonna have to take down?”
Notably missing from the initial comparison was Sprint. T-Mobile’s CTO Neville Ray filled the gap: “Oh — I forgot somebody — Sprint at 7.9 Mbps. Very forgettable, that’s why I forgot it,” he quipped.
Coverage has long been a concern for T-Mobile customers. This month the carrier completed a $3 billion purchase of 700 MHz A-Block spectrum, a low-frequency band that provides broader geographic coverage and better building penetration.
Ray called the acquisition a game-changer: “In my 14 years at the company, I have never had a weapon like this in my arsenal. We are going to frighten the crap out of AT&T and Verizon with that spectrum. We’re going to put that in places where we can’t play well today.”
T-Mobile has been rolling out its Uncarrier strategy in stages, each labeled with a version number:
Uncarrier 1.0 – Simpler choices by ending long-term contracts and eliminating overage charges.
Uncarrier 2.0 – Anytime Upgrade, making device upgrades easier and more flexible.
Uncarrier 3.0 – Eliminating bill shock by removing international roaming charges for many users.
Uncarrier 4.0 – Removing common pain points, including early termination fees.
With 4.4 million net customer additions in 2013, T-Mobile became the fastest-growing wireless carrier in the U.S., adding more subscribers in the second and third quarters than its competitors combined. That marks a dramatic reversal from 2012, when the company lost 2.1 million customers overall.
What do you think of T-Mobile’s latest strategies and tactics?