T-Mobile's reward for tweaking its rivals? More subscribers

John Legere

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Say, what you will about John Legere’s shoot-from-the-lip style of corporate governance—and as a tech reporter used to covering CEOs who come in the flavors of Bland and Extra Bland, I say “Keep on keepin’ on, John”—but his “Uncarrier” strategy is reaping dividends in for T-Mobile in the form of more customers for the upstart carrier.

On Thursday, T-Mobile said it added 1.3 million new postpaid subscribers during the first quarter of 2014. That’s more than the new subscribers that AT&T and Verizon can claim combined for the quarter, according to Bloomberg. Looks the fight-picking and in-your-face tweeting are paying off, though to be honest, paying early termination fees probably helped persuade many of those users to cast their lot with T-Mobile over the last three months.

In times like this, Homer Simpson’s analysis still rings true:

Of course, when you’re splashing the cash to get people to sign up with your wireless service, you end up paying some price. In T-Mobile’s case, that’s a quarterly loss of $151 million as operating costs grew faster than revenues (which, T-Mobile would like you to know, increased 47 percent year-over-year to $6.88 billion).

Still, to here Legere tell it, T-Mobile may have lost some money, but it’s winning the price war. “A year ago I promised that we would bring change to what I called this arrogant US wireless industry,” Legere said in a statement accompanying the earnings release. “We are delivering on that promise and our results reflect the growing customer revolution that we’ve ignited.”

And it’s hard to tell him that he’s wrong, as many of the moves that T-Mobile has made in the past year—from offering to pay early termination fees to providing international data roaming and texting to its users—have put its rivals into reaction mode. Verizon has introduced new wireless plans in recent months; so has AT&T. And the pricing battles figure to continue: Just in the last month, T-Mobile has introduced a plan aimed at budget users, altered its pricing for 4G LTE tablets, and called for an end to overage fees. We’ll see if its rivals follow suit.

There’s one other side effect of T-Mobile adding all these new subscribers—it’s become a much more attractive acquisition target. Bloomberg reports that Sprint is lining up the financing to snap up T-Mobile, which would combine the third and fourth largest wireless carriers in the U.S.

This story, "T-Mobile's reward for tweaking its rivals? More subscribers" was originally published by TechHive.

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