T-Mobile US (NYSE:TMUS) CEO John Legere believes the carrier will be able to pick up new subscribers this fall when Apple (NASDAQ: AAPL) launches the iPhone 6 this fall because T-Mobile does not have a large existing base of iPhone subscribers.
Apple is widely expected to unveil the next iPhone in September and is likely expected to launch two version of the gadget, one with a 4.7-inch screen and one with a 5.5-inch screen.
On T-Mobile's second-quarter earnings conference call, Legere noted a recent Morgan Stanley report that said 33 percent of U.S. wireless customers are "likely" or "somewhat likely" to consider switching carriers over the next six months. He also said of the four Tier 1 carriers, T-Mobile has the lowest percentage of customers who are likely or somewhat likely to switch.
"And then, of course, when you look at a potential iconic device that's coming to the market, T-Mobile, because of a lot of variables, has the lowest percentage of our base in the iPhone product because of we've only recently launched it," he said, according to a Seeking Alpha transcript. "And what that does, it makes us far less susceptible to this new device being a switching event of our customers and a major upside possibility for us. Because amongst other things, T-Mobile was seen as a likely destination for those switchers. So if a switching event is coming, a major one, we've got a big pool of players that are moving. I think we've got a huge opportunity."
T-Mobile first started selling the iPhone in April 2013, the last of the four Tier 1 carriers to do, and indeed even behind many smaller carriers, such as U.S. Cellular (NYSE:USM) and nTelos Wireless.
T-Mobile showed continued strong subscriber momentum in the second quarter. The carrier said it added 1.47 million total net new subscribers in the second quarter, including 908,000 branded postpaid net adds.
T-Mobile CMO Mike Sievert told CNET that the company "has a lot to gain." T-Mobile's continued offer to pay off the Early Termination Fees of customers who switch and trade in their phones, and its no-contract plans, make it attractive for customers to switch, he said.
"Consumers are more likely to consider changing carriers when they are already changing their hardware," Current Analysis analyst Avi Greengart told CNET.
Yet other carriers are not standing still. AT&T Mobility (NYSE: T), for example, has adopted T-Mobile's strategy of offering a handset upgrade program that includes paying off the cost of a phone in monthly payments. Such plans could make customers more likely to stay with their current carriers than they might have in the past.
Further, Apple will soon support in its stores the handset upgrade programs from three of the four Tier 1 U.S. carriers, according to a recent report from 9to5Mac. The report, which cited unnamed sources, said starting in late August "many" U.S. Apple retail stores will launch a pilot program to let customers buy new iPhones via AT&T's Next program, Verizon Wireless' (NYSE: VZ) Edge and T-Mobile's Jump. It's unclear if or when Apple will support Sprint's (NYSE: S) Easy Pay program. The pilot program will likely be rolled out to all Apple stores later in 2014, the report said.
For more:
- see this Seeking Alpha transcript
- see this CNET article
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