T-Mobile Changes The Game
Considering that there are 358 million cellphone accounts in a country with only 317 million people, it’s fair to say that the population of the United States has a bit of a love affair going with mobile technology. The biggest companies in the cellphone industry – Verizon Wireless (NYSE: VZ), AT&T Inc. (NYSE: T), T-Mobile (NYSE:TMUS) and Sprint Co.(NYSE:S) – all had similar policies and prices in years past, so they could afford to be indifferent. The U.S. wireless industry is more competitive than it has been in quite some time, making it harder for phone companies to charge ever-increasing amounts for wireless service.
T-Mobile’s “Un-Carrier” moves break down industry norms by focusing on solving customer pain points. In the last two years T-Mobile’s outspoken and media-savvy CEO John Legere has orchestrated a huge turnaround, largely by shaking up the mobile industry. With T-Mobile’s new “Mobile without Borders” plan, the carrier’s coverage and calling area extends into both Canada and Mexico for all Simple Choice Plan holders. This means that calls to both of these countries are now included in the standard plan, as is roaming within Canada and Mexico. The move eliminates a major pain point for U.S. wireless customers. Last year, a full 35% of all international calls and 55% of all international travel from the U.S. was to Mexico & Canada alone. Over 70% of international trips taken by small and mid-sized business travelers were to Mexico & Canada. And, the same year, the carriers raked in nearly $10 billion in global roaming charges at over 90% margins. Meaning the carriers are lining their pockets with billions of dollars in inflated roaming fees—for coverage the Un-carrier now includes at no extra cost.
T-Mobile’s impressive growth might be attributed to its relentless “Un-Carrier” marketing. In the past year alone, it’s introduced a leasing program with unlimited phone upgrades, a fee-free “Mobile without Borders” roaming plan for Mexico and Canada, and a discounted family plan. The response has unsurprisingly been positive, T-Mobile ranked first among major U.S. carriers in the latest J.D. Power study of customer satisfaction. T-Mobile’s preliminary earnings report shows that it added 2.1 million new customers this quarter, giving it 58.9 million in total.
With 2.1M new subscribers, T-Mobile dominated U.S. smartphone growth. The Un-Carrier has leapfrogged Sprint to become the third-largest carrier in the United States by number of subscriber. The latest figures show Sprint with a total of 57 million customers and T-Mobile with 58.9 million. Whereas T-Mobile experienced another surging quarter that brought in 2 million new customers, Sprint added only 675,000. The Un-carrier’s many moves to upend the cell phone industry have done more than just grab headlines; they also vaulted T-Mobile to the top of our wireless-carrier rankings.
T-Mobile’s aggressively priced cell phone plans are attractive to both individual subscribers and families, and the carrier augments its service with consumer-friendly features like rollover data that accumulates over 12 months, music streaming that doesn’t count against your data allotment and attractive international plans for travelers. T-Mobile’s Data Stash plan lets you roll over any unused data from month to month, in effect giving users a bonus after a month of light usage.
There is no reason to not believe the company has already overtaken Sprint and is on its way toward being the carrier of the future. Shaking up the industry in the way that it does doesn’t count for nothing.