Bloomberg News

T-Mobile Touts IPhone Test Drives, Music Streaming to Grab Users

June 19, 2014

T-Mobile US Inc. (TMUS:US), aiming to grab some attention from Amazon.com Inc.’s new phone partnership with rival AT&T Inc. (T:US), announced plans to offer free iPhone trials of its network and a subscription music service.

The wireless carrier will give prospective customers the latest version of Apple Inc. (AAPL:US)’s smartphone for a seven-day test drive, it said yesterday. T-Mobile also announced a new music-streaming service in partnership with Rhapsody International Inc. and said that similar products like Spotify Ltd. and Pandora Media Inc. will no longer count against the amount of gigabytes of high-speed data users pay for each month.

While it is the smallest of the four U.S. wireless carriers, T-Mobile, led by CEO John Legere, has been growing the fastest. Legere, a self-styled rebel, has branded T-Mobile the un-carrier and gained subscribers by making aggressive moves like financing phone purchases and buying out contract penalties for customers that switch service.

The new offers are Legere’s attempt to stay ahead of his bigger competitors as they introduce their latest initiatives to woo customers. AT&T said yesterday it will be the exclusive wireless carrier for Amazon’s Fire smartphone, which gives users direct access to the online retailer’s entertainment offerings, like Prime Music. In April, Sprint Corp. (S:US), the third-biggest U.S. carrier, said it would start giving customers a discount on Spotify’s service, while AT&T has a similar deal with Beats Electronics LLC.

T-Mobile said it won’t charge for data for streaming from Pandora, Rhapsody, Clear Channel Communications Inc.’s iHeartRadio, Apple’s iTunes Radio, Slacker Inc. and Spotify.

Free Streaming

“We are in the wireless-services business. We spend capital to create a fast network so people can stream whatever they choose for free,” Legere said in an interview yesterday.

T-Mobile is also working with Rhapsody to offer unRadio, a premium service free to customers that have the $80-a-month unlimited-data plan, and $4 a month for all other T-Mobile customers. UnRadio lets users skip as many songs as they like, create music stations based on interests, listen to broadcast radio from around the world and download songs.

While T-Mobile’s music options target heavy data users, the network test-drive offer is an attempt to lure consumers who haven’t been using T-Mobile. Starting June 23, people can try T-Mobile’s service free for a week, as long as they have a credit card and live in the U.S. That lets consumers see whether they like the mobile-phone company’s network speed and coverage without having to switch from their current provider.

Catch Up

Apple agreed to provide T-Mobile with the demo phones. After seven days, the trial service is shut off and users can return the phones to a T-Mobile store, said Clint Patterson, a T-Mobile spokesman.

While Bellevue, Washington-based T-Mobile has trailed AT&T and Verizon Communications Inc. (VZ:US) in network upgrades, Legere is pushing the company to catch up. The company now has its fastest long-term evolution, or LTE, network in 16 cities after introducing the technology late last year in Dallas, it said yesterday.

“This not only gives people a test drive of our network, it gives them a test drive of the Apple iPhone 5s,” Legere said. “The big guys want to force you to make a quick decision and live with it for two years. That’s the business model. They don’t want you to take a test drive. We want to change that.”

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison, Ben Livesey


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Companies Mentioned

  • TMUS
    (T-Mobile US Inc)
    • $27.03 USD
    • 0.36
    • 1.33%
  • T
    (AT&T Inc)
    • $34.17 USD
    • 0.21
    • 0.61%
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