Revised: Feb. 14, 2014
If you use ATT or Verizon for cellular service, you should be thanking one man today. His name is John Legere. He does not work for either company. He did not invent the latest, greatest cell phone or other mobile technology. Legere is the CEO of T-Mobile USA [TMO]. Our T-Mobile is owned by Deutsche Telekom, a German firm which also markets the T-Mobile brand throughout Europe. In 2012, TMO was seemingly at its lowest point. ATT was trying to acquire them. However, the FCC and members of Congress, along with the public balked at this idea. It was anti-competitive. TMO was seen as small, cool, and innovative. ATT was a giant beast with a nasty reputation for its customer service.
The TMO / ATT deal fell through, but baked into the contract was a $6 billion breakup fee that was payable to TMO. TMO used this to expand their towers into new markets. Billions were spent on transforming an oddball frequency 1700 megahertz and converting those towers to 1900 mhz so that iPhone users could fully utilize high speed data if they were to switch to TMO. Prior to this tower conversion, there were at least 1 million iPhone users on T-Mobile. This is remarkable given that TMO did not sell the iPhone directly. They had no business relationship with Apple in this country. People were either canceling their ATT contract or buying an unlocked, full price iPhone from Apple. TMO began selling the iPhone in the Spring of 2013.
After the failed ATT – TMO deal, John Legere started with a vision. He wanted to disrupt the cellular industry in America. He began laying out this strategy one year ago. He called it the UNCARRIER plan. Over the past year it has been rolled out in four major phases. No ever thought that Legere would succeed. The four major cellular players in this country — Verizon, ATT, Sprint and TMO were deeply entrenched and they would continue to fight it out with higher prices, more restrictions, and grumpy customers, right? WRONG. Legere has tipped the sleeping cow and it is kicking with its feet in the air. Major TMO accomplishments have included…
– Separating the phone from the service. You can bring your own (compatible) phone and use it with T-Mobile or you can finance it from them, interest free. No more subsidized phones!
– Monthly prices no longer need to be inflated to cover subsidized phones. Customers should get a good value for the money they pay.
– No more contracts. No early termination fees. If you want to leave, leave. Thanks for trying us out. The phone and the service are separate deals.
– Do you like to travel overseas? GREAT. TMO has made partnerships with carriers in 120 countries. You can do do basic INTERNET surfing and check e-mail for free without changing your SIM card. There will be no $1000 bills when you travel to these countries.
– And most recently — do you want to leave your contract with ATT, Verizon or Sprint? Great. We will pay your cancellation fee and give you a $200 credit toward a new phone.
Legere has been bold and at times even crude. He is known for letting F-words fly at press conferences. Can you think of a “major league” CEO that does this? This isn’t my style and I am certainly not condoning his verbiage. What I admire is his enthusiasm. He loves his brand. He made promises. He laid out a strategy. He delivered!
So, what does this mean?
I am not telling you to sign up for TMO. I have no position on that. If you are mostly a city and suburb person, TMO service usually works fine. However, once you travel out to remote areas (ie. Litchfield, CT) their towers are few. You would still be able to place a 911 call, but that’s about it. ATT and Verizon have FAR MORE towers throughout the USA than TMO. Verizon and ATT said they would never budge. They said they don’t need to compete with TMO on price or service options.
They have lost that battle!
1. Starting last fall, ATT lowered prices by $15 per line for customers who were off contract and who chose not to buy a subsidized cell phone.
2. A few weeks ago, ATT came out with a new family plan that is absolutely remarkable. Unlimited calling and text and 10 GB of data (WOW) for $130. Have a 3rd or 4th line in the family? Each additional line is only $15.
3. Today, February 13th — TMO finished their coup of the cell phone industry. The iron fortress, the immutable Verizon announced TWO MAJOR CHANGES:
All Several plans are being upgraded effective immediately (so long as you were not on one of the old grandfathered unlimited plans or some 2004-era plan with 300 minutes). Essentially this means that the data you are are allowed to use every month is being increased 50 to 100%. The old 500 MB plan and 1 GB plan double to 1 GB and 2 GB, respectively. The old 2 GB, increases to 3 GB. The shared plans were called “Share Everything”. Now they are called “More Everything.” Since this change involves only benefits to your service and no restrictions or removal of features — they are simply doing it. No approval is needed. Sadly, Verizon’s Meriden, CT call center is also closing as a result of this shakeup.
–Furthermore, Verizon is now giving all customers free international text messaging.
– If you
agree to buy buy future phones through their EDGE program (interest free payments), non-subsidized, you can save $10 to $20 per month PER LINE. You must buy a phone on the EDGE plan to get the discount.
In conclusion, Verizon has changed less than ATT or TMO, but this is still a huge step for them.
A mature industry has actually gotten better. There is more choice now. You can save money or get more for your money. You have one man to thank. His name is John Legere.