T-Mobile takes aim at AT&T's iPhone in new ad campaign
NEW ORLEANS--T-Mobile USA CEO Philipp Humm returned to the keynote stage here at the CTIA Wireless show in full force, using his appearance to offer metrics about the company's network, reinforce the carrier's new "challenger" brand position and to take a stab at T-Mobile's former suitor, AT&T Mobility (NYSE:T).
Click here for T-Mobile's ad targeting AT&T's iPhone
Specifically, Humm ended his keynote speech here with the No. 4 carrier's latest commercial, which castigates AT&T's network as being too slow. In the ad, T-Mobile's spokeswoman--who recently traded in her magenta dress for a black biker's outfit--blasted past a man on a motorcycle who represented AT&T's iPhone. "If this is the speed of the iPhone 4S on AT&T, what does 4G speed on T-Mobile look like?" the ad asks.
Humm said the ad is part of a larger push by T-Mobile to dust off a brand that was clouded by AT&T's now-failed acquisition of the carrier. The acquisition was announced the weekend before the start of last year's CTIA show and prompted virtually all of T-Mobile's executives to refrain from public appearances during that event. This year, though, the carrier has been vocal about its desire to reclaim its position in the industry and more effectively compete against rivals.
So what did AT&T's Ralph de la Vega have to say about T-Mobile's latest ad? During a roundtable gathering that included de la Vega, Humm, Verizon Wireless' (NYSE:VZ) Dan Mead and Sprint Nextel's (NYSE:S) Dan Hesse, moderator and CNBC host Jim Cramer prodded de la Vega for his response.
"It ain't true," de la Vega said. "That's why we have a bad reputation in this industry: We take the truth and we stretch it."
After additional nudging by Cramer, de la Vega pointed out that the ad compares "a phone to a network," and therefore wasn't a fair comparison. Indeed, AT&T recently lit up an LTE network that provides speeds far faster than the speeds provided by T-Mobile's HSPA+ network; AT&T's iPhone runs on the carrier's slower HSPA network.
T-Mobile, for its part, has suffered sluggish subscriber additions due to its lack of the iPhone--Apple's (NASDAQ:AAPL) products do not currently support the spectrum T-Mobile uses for HSPA. T-Mobile is in the midst of a network refarming project that will free up 1900 MHz spectrum for HSPA services, a move that will allow current iPhones to access T-Mobile's HSPA speeds.
Apart from the back-and-forth between the two CEOs--who just a few months ago struggled to obtain regulatory approval for their marriage--Humm also offered a number of new insights into T-Mobile's business.
Specifically, Humm said T-Mobile's network now carries 146 times more data than it did five years ago. He said 80 percent of T-Mobile's new contract subscribers are selecting smartphones, thereby generating even more data traffic. And perhaps most importantly, he said T-Mobile's smartphone users consumed 25 MB of data per month in 2009, a figure that has ballooned 30 times to 760 MB per month in 2012.
Interestingly, Humm declined to answer a question about whether T-Mobile would seek an initial public offering. T-Mobile is scheduled to release its first-quarter results Thursday.
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