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T-Mobile: We Will Aggressively Challenge AT&T

Fri, 12/07/2012 - 4:38pm
Andrew Berg

T-Mobile USA CEO John Legere says his company will aggressively challenge AT&T in the coming year. 

"You love your iPhone, but you hate AT&T. I want you to get used to that kind of tone, because that is the way we're going to play," Legere said, during remarks Thursday at parent company Deutsche Telekom's annual investor conference. 

Following yesterday's announcement that T-Mobile is partnering with Apple on bringing new products to market next year, Legerre outlined a strategy going forward that turns on its head the traditional device subsidy model.

According to Legere, T-Mobile will begin allowing users to pay an up-front amount for their device and then pay a per-month fee to cover the remaining balance of the phone. 

"Based on credit capabilities, you may pay $99 for the most iconic device in the world, and then you may get 20 months of, call it $15, $20 a month," Legere said, in comments that seemed to reference Apple's iPhone. T-Mobile will also accept trade-ins for the residual value of their devices, allowing users to upgrade as often as they like. 

Legere likened the system to the way consumers buy and activate the cellular-capable iPad. 

As part of its strategy going forward, T-Mobile will push its Value Plans, which Legere said are more profitable than the company's classic plans. He said that value plans have a 2-month longer customer life versus classic plans. There's also a difference between $550 over the customer life on a classic plan versus a $600 customer life on a value plan.

"This is a big deal, and it's step one of the kind of things we're going to do to disrupt the industry," Legere said, adding that in its all out assault against AT&T, he hopes to get customers to say, "I can't believe they did that."

Legere talked around the actual details of the company’s deal with Apple, saying only that T-Mobile has not made the kind of commitment that Sprint did. The deal wasn’t “anything close to it," Legere said, offering that the total financial impact of the deal with Apple has already been baked into its projections for the next few quarters.  

And while Legere remained vague on any further details about the Apple deak, he did offer a few comments that are sure to pique the interest of Apple fans. 

“When this device rolls out, I can only tell you that it will be a dramatically different experience, and unfortunately I can only tell you that the reports about what's going to happen when this thing finally rolls out...they're all wrong,” Legere said.

 
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