T-Mobile Says Americans Are Ready for a Change

T-Mobile invited the press to an event where the decor was purgatory-meets-shackled-in-the-dungeon. “Everyone loves smartphones, everyone hates contracts,” CEO John Legere said. “[The other carriers] put you in smartphone purgatory—or smartphone hell.” T-Mobile is doing away with contracts and selling its phones separately from its services. “I want to be clear,” Legere said. “If you come to T-Mobile, you have signed your last contract.”

Because of contracts, people get stuck using outdated or even broken devices. “Most carriers are really nice to you once every 23 months,” Legere said. “‘Here’s a free t-shirt, have some balloons. Then you go home and your contract is confusing and you call Customer Care, and it’s terrible. [A carrier] should have to earn business every single day.” T-Mobile highlighted a real-world example of bill shock in which someone was presented with an $83,000 bill.

“It’s time to disrupt the status quo in this industry,” Legere said. “It’s time to free the American consumer from the constraints. This is about fighting back. It’s about giving people a simpler choice and a better way.”

T-Mobile’s plan to earn its subscribers’ business is to pair a “smokin’ fast” network with the best devices and simple plans without hidden pain points. “It goes like this: How many lines do you want? How much data? Here’s the pricing structure: $50, $60, $70. Do you want 500MB, 2GB or Unlimited? That’s it!” Legere said. People with bad credit can pay at the beginning of the month. To anyone tempted to say this makes T-Mobile a prepaid carrier, Legere added, “Cut the crap!”

T-Mobile’s lack of an LTE network has been a major competitive inhibitor. But it now offers LTE in seven markets—Baltimore; Houston; Kansas City; Las Vegas; Phoenix; San Jose, Calif.; and Washington, D.C. By midyear it will cover 100 million people, and by year’s end, 200 million people. Legere said the network is currently in more markets, but it’s keeping those locked until it can offer a consistently good experience.

T-Mobile’s iPhone 5 will feature an upgrade that makes it compatible with more spectrum bands. “The experience is going to be beautiful from day one,” Legere said. It will be priced at $99 down and 20 payments of $20. If a customer chooses to pay the full $499 up front, she can. Apple sells the unlocked iPhone 5 starting at $650.

T-Mobile is in an excellent spectrum position, said executives. It will have 50 percent more bandwidth than AT&T, said Chief Marketing Officer Mike Sievert, adding, “It’s like an HOV lane.” While T-Mobile has the right to throttle unlimited customers who use too much data to the detriment of customers, officials say they have yet to do that—and it has some customers using 50GB.

T-Mobile put the iPhone 5, Galaxy S 4, BlackBerry Z10 and HTC One on display for members of the press to try out on its speedy network. While New York won’t officially be announced as an LTE city until this summer, an LTE network is live and about 20,000 customers are currently enjoying it.

During a demonstration, the Galaxy S 4 was extremely fast. YouTube videos came up instantly, and a user could jump to the end of a video with no lag.

Legere has promised new ad campaigns that aggressively go after its competitors. One ad that will begin airing immediately features four cowboys, three of whom tell the terrorized townfolk that they’re going to have to “do what we say.” A fourth, switching to a magenta hat, decides he feels otherwise. Legere encouraged the audience to pay close attention to the rather nuanced cowboys. “That nasty guy on the end is Sprint—you’ve got to know that, right?” Legere grinned.