Bloomberg News

T-Mobile Touts Customer Gains After Party-Crashing Antics

January 09, 2014

T-Mobile US CEO John Legere

John Legere, chief executive officer of T-Mobile US Inc., speaks during an event on March 26, 2013 in New York City. Photographer: John Moore/Getty Images

T-Mobile US Inc. (TMUS:US) Chief Executive Officer John Legere, a self-styled rebel of the wireless industry who was thrown out of an AT&T Inc. (T:US) party this week, took the stage yesterday to back up his bluster with results.

Legere, giving a speech at the International Consumer Electronics Show in Las Vegas, said T-Mobile added 869,000 monthly subscribers last quarter, topping the average analyst estimate of about 650,000. The company had the best quarter in eight years, making it the fastest-growing wireless carrier in the U.S., he said.

Legere is getting the attention of customers with new tactics, such as a plan to pay off early-termination fees if they switch to T-Mobile, along with a brash personal style. He crashed AT&T’s party this week wearing a pink T-Mobile shirt, saying he was just there to see rapper Macklemore perform. He then retweeted off-color remarks about the incident from his fans on Twitter.

Related:

  • T-Mobile CEO Escorted Out of AT&T Party in Las Vegas
  • Without the FCC, John Legere Wouldn’t Be at the Telecom Party

“AT&T is a total source of amusement for me,” Legere said at yesterday’s speech, where he held a Red Bull energy drink while listening to music from Macklemore. “These are fat cats that can’t move.”

The early-termination plan, announced yesterday, will pay the fees of customers switching from AT&T, Sprint (S:US) Corp. or Verizon Wireless. Families could save as much as $650 per line, the Bellevue, Washington-based company said.

Speed Edge

Legere also touted T-Mobile’s technological improvements. Countering AT&T’s claims that it has the fastest network, Legere showed a video of how quickly he could download a recording of a Shakira concert compared with AT&T. Legere said he would send a cease-and-desist letter to AT&T to get them to stop their “fastest” claims in ads, forcing them to take down billboards around the country.

Mark Siegel, an spokesman for Dallas-based AT&T, declined to comment on Legere’s remarks.

T-Mobile is now gaining two subscribers for every customer it loses to AT&T, the company told investors at a separate conference earlier in the week. Sprint, meanwhile, gives up three customers to T-Mobile for each one it takes.

While T-Mobile is making bigger gains against AT&T and Sprint, it says it’s even winning away customers from Verizon, the largest U.S. carrier. T-Mobile’s so-called porting ratio -- the customers coming to it from Verizon -- is greater than 1, the company said.

‘Sustained Momentum’

“This shows some real sustained momentum,” Mike Sievert, T-Mobile’s chief marketing officer, said at the investor conference.

Shares of T-Mobile, the fourth-largest U.S. wireless carrier, gained 69 percent last year, lifted by its improving performance. The shares rose less than 1 percent to $33.31 yesterday in New York.

T-Mobile also has been the source of takeover speculation, and its parent company Deutsche Telekom AG (DTE) has indicated that it would be willing to sell its stake. Sprint Chairman Masayoshi Son, the Japanese billionaire, has held discussions with banks about financing a T-Mobile deal, people familiar with the matter said last month.

Asked about the speculation yesterday on Bloomberg Television, Legere declined to discuss the topic, saying the company could compete “with or without consolidation.”

Scott Sloat, a spokesman for Overland Park, Kansas-based Sprint, also declined to comment.

AT&T Tension

Since taking over as CEO in 2012, Legere has been undercutting his larger competitors with less expensive plans, quicker upgrade privileges and free international roaming. Along the way, he has needled AT&T, the second-largest mobile-phone company, and its CEO Randall Stephenson, calling his network “crap” at last year’s CES.

Legere has singled out AT&T in part because the two companies use a similar network technology. That makes it easier for customers to keep their phones when they change between the two providers. AT&T counterattacked last week, announcing it would give T-Mobile customers as much as $450 in credits to switch over. Legere responded by saying AT&T was “bribing customers.”

The growing bitterness between the two companies follows an attempt to merge in 2011. AT&T had to walk away from the $39 billion takeover after facing opposition from regulators.

The collapse of that acquisition required AT&T to pay a breakup fee valued at about $7 billion. The penalty package included cash, airwaves and network-sharing agreements, helping turn T-Mobile into a stronger competitor.

On Twitter, Legere likes to make references to Batman and TV shows, taunting rival carriers and republishing his followers’ messages, even unflattering ones. After the AT&T party, online journalist Om Malik tweeted that Legere’s antics would make him switch from AT&T, despite T-Mobile’s “sucky data network.”

“You made my day!!!” Legere wrote back.

To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Olga Kharif in Portland at okharif@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • TMUS
    (T-Mobile US Inc)
    • $33.5 USD
    • 0.62
    • 1.85%
  • T
    (AT&T Inc)
    • $35.76 USD
    • 0.06
    • 0.17%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus