T-Mobile's Legere: If customers try Sprint and don't like it, they'll leave and never come back

HALF MOON BAY, Calif.--T-Mobile US (NYSE:TMUS) CEO John Legere said he is impressed by what Sprint's (NYSE: S) New CEO Marcelo Claure is doing to be aggressive and win back market share, but he warned that if customers flood onto Sprint's network and have a poor experience they will churn and never come back.

t-mobile john legere


Speaking here at Re/code's Code/Mobile conference Monday night, Legere said: "I have told him [Claure] I admire what he is doing." However, Legere offered some candid advice for his rival, including not to forget about existing customers when crafting new rate plans, "don't do trickery," and "remember your network blows."

"They know it's a year before it works," Legere said in his characteristic and profanity-laced style. "Customers are going to come in and are going to spin." He added: "If customers come in now and churn out, they'll never come back."

Since Claure took the helm in mid-August the company has radically revamped its pricing plans for families and individual subscribers. First, Sprint launched shared data plans that offer double the data of similarly priced plans from Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T). Sprint also launched a $60 plan for unlimited voice, texting and data plan for individuals. The plan undercuts T-Mobile's $80 unlimited data plan by $20.

However, Sprint is in the process of expanding and upgrading its LTE network. According to an August report from independent network testing firm RootMetrics, Sprint placed last among the four Tier 1 carriers in overall national network performance, data performance, network speed and call performance for the first half of 2014. Sprint is trying to remedy that through the rollout of Spark, its tri-band LTE service, which Sprint says delivers peak data speeds of 50-60 Mbps right now and will deliver 100 Mbps by the end of the year through two-carrier aggregation on its 2.5 GHz TD-LTE service. Spark is only available in 29 markets right now, though Sprint aims to cover 100 million POPs with Spark by the end of the year.

In August Legere predicted T-Mobile would pass Sprint in terms of total subscribers by the end of 2014. And T-Mobile is well on its way to meeting that goal: The carrier added 2.34 million total wireless customers, including 1.38 million branded postpaid net subscribers, in the third quarter.

Legere recalled how he "pre-announced we're going to beat Sprint by the end of the year. How much do you think that pissed off Masayoshi Son?" Son is the CEO of Sprint parent SoftBank.

Legere said that in the third quarter T-Mobile's net porting ratio against its three Tier 1 competitors was 2.2, meaning that for every T-Mobile customer that left, 2.2 customers from its three main competitors came to T-Mobile. At Verizon and AT&T the ratio was 1.89 and at Sprint it was 2.6, Legere said. "We absolutely kicked the sh-t out of the industry," Legere said.

Legere said the Apple (NASDAQ: AAPL) iPhone 6 and 6 Plus have been the carrier's largest phone launches to date. "Demand was through the roof," he said. When Legere became CEO in September 2012, T-Mobile did not carry the iPhone. T-Mobile first started selling Apple products in April of 2013, and Legere said that getting the iPhone was a major priority for him.

"Get on your knees, crawl over," Legere said. "Do whatever you have to do to get the iPhone. Because your store, without the iPhone in it, is sh-t."

Legere said that "one of our best weapons is the ineptness of the industry," adding that the company's "uncarrier" moves, including paying  customers' Early Termination Fees when they switch to T-Mobile, not counting streaming music toward data usage, and launching personal Wi-Fi hotspots, are not one-off programs.

"They're philosophical desires to change the industry," he said, adding that each one solves a pain point for customers. "When the industry adapts to what we do, that's great, because that was our goal from the beginning."  

Legere acknowledged that his public persona of wearing T-Mobile T-shirts, cursing freely and poking competitors in the eye is a "shtick," but, referring to T-Mobile's corporate parent, he added, "You've got to say that me and Deutsche Telekom is interesting."

For more:
- see this Re/code article
- see this separate Re/code article
- see this TechCrunch article

Related Articles:
América Móvil says it's not in talks with T-Mobile for a deal
Analysts: With Iliad M&A off the table, T-Mobile can focus on its own business
Iliad drops bid for T-Mobile
Analysts: T-Mobile likely to continue strong subscriber growth into Q4
T-Mobile's Legere dismisses flood of M&A rumors as 'craziness'