Hollywood isn’t the only industry looking to comic books for inspiration. Since John Legere became its CEO at the end of 2013, T-Mobile USA has been hard at work trying to turn itself into a folk hero straight out of DC Comics, fighting for justice in the wireless industry.
No, we don’t just say this because Legere put The Dark Knight on his Twitter Profile page. In the last 18 months, T-Mobile has received praise for its “Uncarrier” philosophy, which includes everything from paying off early-termination fees to ending overage costs for customers. Every couple of months, T-Mobile shows off new ways it will change the way we think about wireless carriers, praising its own Uncarrier ways and criticizing the competition.
But is the Uncarrier movement really a goal to change things forever, or is it just another marketing ploy? And have T-Mobile’s moves been all good for customers? Reservations in hand, we spoke with T-Mobile’s Chief Marketing Officer Mike Sievert and looked back on all of T-Mobile’s big announcements to see what they’ve done for customers. Does T-Mobile really deserves the title of Uncarrier?
Adding up T-Mobile’s Uncarrier moves
Before CEO John Legere and his team of new executives arrived in September 2012, T-Mobile played a quiet role in the wireless carrier wars dominated by AT&T and Verizon. While new data caps on faster LTE technology became the norm, the most we heard or saw of the magenta network was the T-Mobile Girl. Starting with a press conference in January 2013, things began to change. Now, Sievert says this whole Uncarrier movement with T-Mobile is about making good on the bad things that other carriers have done here in the U.S.
“We started this journey to fix a broken industry. The way to do that is by listening to customers. They will happily tell you what is broken,” Sievert told Digital Trends. When we last spoke with Sievert, the Uncarrier movement was just getting starting. Back then Sievert criticized the “utility company” way of thinking common in the wireless industry.
“We started this journey to fix a broken industry.”
“It’s been fascinating to watch the big, bloated, old guard carriers stumble as they try to respond to the change we are driving into this industry … We will continue to call out the crazy practices of this industry, and of our competitors. We’ll continue to shine a light on the restrictive practices of the industry to make sure consumers are aware of all the facts,” Sievert told us.
The things T-Mobile has done since Legere took over include more than a dozen changes; from network enhancements to pricing changes to generous offers to switch to T-Mobile — special perks that accompany switching. Even if T-Mobile has forced a lot of interesting changes to the market since January 2013, we remain skeptical, especially considering just how evil wireless carriers in the U.S. have been in recent years. We’ll look at all these general changes to the company and figure out — through the good and bad — what kind of company T-Mobile ends up looking like.
T-Mobile bets the house to win you over
If there’s one thing T-Mobile is now famous for, it’s a commitment to pay your early termination fees (ETFs, usually hundreds of dollars) if you switch from another carrier. Highlighted on Twitter with break-up letters between customers and their old carriers, T-Mobile has been paying out big money to bring customers over.
Sievert told us that, “[customers] want to switch, but until we launched ‘Contract Freedom,’ they couldn’t because of early termination fees and family members on staggered contract expiration dates.” In return for trading in your old smartphones to be refurbished or recycled, T-Mobile gives your account a credit up to $650 equal to whatever it costs to terminate your contract with your previous carrier, as well as a fair market value of your device. The concept has been done before, but never on a scale this big, where anyone can do it no matter how new their contract is with a competitor.
T-Mobile’s decision to pay the ETFs of new customers is a Pyrrhic victory — it comes at great cost. In its latest earnings report on May 1, T-Mobile reported a record increase in customers, totaling more than 2.4 million net new subscribers. However, the gains came at a $150 million loss compared to a $100 million profit this time last year. It’s clear that this move, even if it’s making waves, is costing T-Mobile a ton of money. The company admitted earlier this year that while this new plan will take a hit on its revenue at first, in the long run it does not see a threat to its revenue from this offer. T-Mobile ultimately sees the project as sustainable.