Commentary

T-Mobile, The 'Uncarrier,' Outdoes Expectations As It Adds More Lures

The “Uncarrier” had an uncannily positive quarter and the results announced yesterday, coupled with promotions that have rolled out  over the last couple of months, boosted T-Mobile’s momentum as it seeks to ascend to No. 3 position in the wireless wars.

“Add profits to the list of accomplishments for T-Mobile US in the second quarter,” writes Mark Davis for the Kansas City Star, reporting that the 42 cents a share it earned “far exceeded the 14-cent average of predictions compiled by Bloomberg.” Sales were up 14% to $8.2 billion in the quarter, the average customer bill rose 3.8% to $48.19, and it increased its outlook for new subscribers in 2015 from 3.4 million to 3.9 million.

“Once faced with subscriber losses, the company has revamped pricing plans, eliminated service contracts and launched marketing campaigns to turn around its business and lure customers from bigger rivals Verizon Communications and AT&T,” write Reuters’ Lehar Maan and Malathi Nayak.

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“The figures are further indications that T-Mobile's ‘Uncarrier’ campaign, which the company says focuses on the aspects of the wireless industry that annoy consumers, has had a positive effect on its fortunes,” writes CNET’s Roger Cheng.

Among its recent lures to folks who use competitors’ devices to text while walking, T-Mobile said last month that customers could upgrade their smartphones three times a year, then announced that there would be no additional roaming fees for using them in Canada or Mexico. It then unveiled a family plan that gives each member 10 gigabytes of data a month and Tuesday “guaranteed a monthly charge of $15 for anyone buying an iPhone 6 with plans to upgrade to the next version later this year,” Cheng reports.

The latter promotion “solves the ‘buy now or wait’ dilemma,” as Jared Newman points out for MacWorld. He also informs us that “canceling Jump On Demand or leaving T-Mobile altogether has a price: At that point, you're on the hook for the full price of the phone, minus any monthly hardware payments you've already made.”

Those are mighty strong tentacles.

“The market’s attention turns next to Sprint, which announces its latest results Tuesday,” points out Davis in the Star. “So far, the Overland Park-based wireless carrier has offered no indication of what to expect.”

But T-Mobile isn’t just picking on Sprint, which it likely has passed to become the No. 3 carrier in terms of subscribers unless the latter serves up a shocker next week. 

“T-Mobile’s struggles once fed the growth of competitors, but the carrier has added millions of new customers in recent years, an impressive feat as the four nationwide wireless operators compete in a saturated industry where nearly everyone carries a smartphone,” writes Thomas Gryta for the Wall Street Journal. “T-Mobile has been especially successful in adding phone subscribers, whose accounts tend to be more lucrative than accounts set up by tablet-computer owners.”

And MoffettNathanson Research analyst Craig Moffett pointed out in a note that T-Mobile “has progressively addressed one after another the question marks around the sustainability of its growth.”

“We’re several quarters in a row with more postpaid customers than a combination of AT&T, Verizon and Sprint's postpaid customer gains,” COO Mike Sievert told Reuters — and postpaid churn fell to 1.3% from 1.5% a year earlier. 

All this is good news for consumers, writes Amy X. Wang on Slate,  “because T-Mobile’s growth might spur the other three big players  … to offer even better plans to lure customers back.”

T-Mobile CEO John Legere boasted Wednesday that his company “continues to listen to customers and respond with moves that blow them away,” Wang reports. “The question now is whether other carriers will seek to do the same,” she writes.

Meanwhile, in a bit of reverse psychology, smartphone companies themselves seem to be promulgating the notion that we are spending too much time with our screens, the New York Times’ Jonah Bromwich tells us. He talked to his colleague, Brian X. Chen, about the phenomenon.

Chen, author of a book about constant connectivity called Always On, tells Bromwich “because consumer anxiety about overusing smartphones has lessened, companies feel more comfortable using that line of thinking as a way to market new products.”

Chen offers some advice that won’t make your head hurt as much trying to figure it out, such as turning on “Do Not Disturb” from midnight to 6 a.m., as he does, “just so I’m not getting crazy email noises while we’re sleeping.”

Beats sleeping in separate bedrooms, I guess.

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