T-Mobile’s Legere strikes back at ‘Dumb and Dumber’
T-Mobile has been roiling the U.S. wireless market for more than two years by cooking up what CEO John Legere calls its "Un-carrier moves."
T-Mobile has been roiling the U.S. wireless market for more than two years by cooking up what CEO John Legere calls its "Un-carrier moves."
The recipe is simple: Take a practice that ticks off customers while making outsize profit for Big Wireless, forswear your cut of the loot, and use the disruption to grab extra market share.
Legere did it again Thursday, taking aim at what he called a 90 percent profit margin on the wireless industry's $10 billion a year in international roaming charges. Starting next Wednesday, roaming will become a thing of the past for most T-Mobile customers traveling to Canada or Mexico.
"I'll simplify it," Legere said in a media call shortly after announcing the new approach, which he said "amps up" T-Mobile's decision two years ago to forgo lucrative overseas data-roaming charges and cut prices for travelers' calls. "We're just making Canada and Mexico part of your home territory. This isn't about giving you roaming; it's not needing roaming."
Calls, texts, and data will all work the same throughout the three countries for customers on its main Simple Choice plans, Legere said. The "Mobile Without Borders" upgrade includes calls and texts within Mexico or Canada, or even from one to the other.
Legere trumpeted T-Mobile's success in gaining market share. With about 59 million customers, it's still half the size of Verizon Wireless and AT&T Mobility - the competitors Legere likes to call "Dumb and Dumber." But he said he expected T-Mobile to surpass third-place Sprint when quarterly tallies are announced this month. He said T-Mobile added a net 2.1 million customers in the quarter - the sixth straight in which it gained customers from each of its competitors.
Still, it's not clear where Legere's path leads, especially if he can't get the help he's seeking from Federal Communications Commission Chairman Tom Wheeler. The FCC is expected to rule next Thursday on a 2014 petition by T-Mobile seeking more access for smaller carriers to the wall-penetrating, low-band spectrum that the agency is scheduled to auction next year - high-quality spectrum is where Verizon and AT&T still dominate.
But as the trash-talking Legere showed again Thursday, he hasn't run out of disruptive ideas or his impulse for insults and theatrics.
Take his "I'm really sorry, Donald" shout out to Donald Trump and his controversial proposal to build a high wall along the Mexican border.
"Even if Donald Trump wants to put a wall up to block everybody else from coming in, the phone coverage is going to work seamlessly," Legere said. "Don't worry about that wall - this is going to be far more powerful."
True to form, Legere saved his biggest trash-talking for AT&T CEO Randall Stephenson, whom Legere may have just outfoxed. AT&T recently announced the $4 billion acquisition of two Mexican wireless carriers, and plans to offer its own seamless calling experience between the United States and its southern neighbor.
"Well, sorry, Randall - not only are you not the only, you're not the first. And by the way, we add in Canada," Legere said.
Legere said T-Mobile was offering Mobile Without Borders thanks to reciprocal roaming agreements with leading carriers in Mexico and Canada. Analyst Roger Entner said T-Mobile's deals with carriers such as Telmex, owned by Mexican telecom magnate Carlos Slim, may be driven by their hope of countering AT&T encroachment.
"Here you have AT&T coming to Mexico, so how can I spoil their party?" Entner said. "They want to make my life hell in Mexico? I'll make their life hell in the United States."
Corporate maneuvers aside, consumers and businesspeople will find much to like in Mobile Without Borders. And Legere came armed with statistics, too.
He said 35 percent of all U.S. international calls go to Canada or Mexico, and that those countries account for 55 percent of all our international travel.
Yet Americans who travel abroad can easily face hundreds or thousands of dollars in extra charges - as much as $10,000 or more in a single week "just for using your phone like you normally do," Legere said.
"Fifty percent of all customers shut their phones off when they hit the border," he said.
Starting Wednesday, most T-Mobile customers finally won't have to. And wireless customers everywhere will benefit from Legere's decision, once again, to call his competitors out.
215-854-2776@jeffgelles