T-Mobile US (NYSE:TMUS) is trying to lure customers to its network by offering a free test drive for seven days with the iPhone 5s. Plus, as a further enticement, the company is offering Simple Choice customers unlimited access to six music streaming services, including Pandora, Slacker, iHeart Radio and Spotify, without incurring data charges on their 4G plans. Samsung's Milk Music and the forthcoming Beatport music app from SFX will also be offered to customers free of data charges.
For the iPhone trial, customers can sign up beginning June 23 and they will be sent an iPhone. They have a week to use the phone for free on T-Mobile's network and then they can return it or sign up for T-Mobile service. T-Mobile CEO John Legere said the goal of the program is to raise awareness that T-Mobile offers the iPhone--he noted that a surprisingly low percentage of consumers are aware that T-Mobile sells the iPhone and that's why the company teamed with Apple (NASDAQ: AAPL).
The outspoken CEO, who announced the program during an event in Seattle June 18, also said that T-Mobile wanted to remove a pain point in the customer buying process. He noted that the wireless industry has a "high remorse rate," or that about 46 percent say they regret the wireless decision they made once they get home. Legere said this is more than the used car industry and on par with the cable industry, which is notorious for its poor customer service. "This is a pain point. We will try to change it," he said.
The company will also offer a similar trial to business customers. However, enterprises will have two weeks to trial the iPhone 5s and a sales rep will hand deliver the devices. This extra care with the enterprise customers is probably due to T-Mobile's attempt to increase its enterprise business which it has been trying to grow.
Regarding the unlimited streaming music service, Legere noted that the company can offer unlimited because it has the capacity to do it. In fact, he said that T-Mobile has launched wideband LTE in 16 markets now and expects to offer VoLTE nationwide by year-end. Click here for more on T-Mobile's network.
Legere also touted the company's spectrum position saying that it has 70 percent more spectrum per customer than Verizon and "more network capacity per customer than any other carrier." Of course, that statement is probably due to the fact that as of the end of first quarter T-Mobile had just 49 million customers compared to Verizon (NYSE: VZ) with 122 million customers and AT&T (NYSE: T) with 116 million customers.
Legere emphasized the high data usage among the T-Mobile customer base, saying that T-Mobile users use 69 percent more data than Verizon customers, 61 percent more than Sprint customers and 100 percent more than AT&T customers.
In addition to T-Mobile's "Music Freedom" unlimited free streaming music, the company also announced that it has teamed with Rhapsody to debut "Rhapsody UnRadio," a premium streaming music app available on iOS, Android and on a browser developed with Rhapsody. The service is free for unlimited data customers and $4 a month for all other T-Mobile subscribers.
Of course, this isn't the first foray into mobile for Rhapsody. In 2011 the company teamed with MetroPCS, which was later acquired by T-Mobile. The deal gave MetroPCS customers access to Rhapsody's music service as part of a bundle if they purchased a $60 per month rate plan.
T-Mobile Chief Marketing Officer Mike Sievert said that 50 percent of people limit their streaming music service on their mobile devices because they are afraid of overage charges. "Our goal with Music Freedom is different. We want people to enjoy their music worry-free--the way it's meant to be," Sievert said.
Nevertheless, some experts believe T-Mobile may run into some net neutrality issues with its music service because the company said it won't throttle customers' streaming music even if they go over their data caps. T-Mobile offers unlimited data and doesn't charge customers when they go over their data cap, but it does throttle speeds. However, company executives said that with the music service they will not throttle speeds if customers go over their allotted amount of data.
Regardless, T-Mobile executives don't believe there's a net neutrality problem. When asked Legere said there's no issue because the service is free.
- see this Re/code article
- see this press release and this release
- see this Verge article
- see this CNET article
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Article was updated on June 19 to include additional details about the Rhapsody UnRadio service.