T-Mobile CEO John Legere is fed up with the "crap" the wireless industry has been feeding cell phone customers over the years. And he said that T-Mobile is here to shake things up.
At the company's "Uncarrier" event in New York City today, he made a pitch for T-Mobile's new no-contract plans, which went into effect Sunday, and he announced the launch of his company's new 4G LTE network and the long-awaited availability of the Apple iPhone on T-Mobile.
Legere, who took the stage in a black blazer, jeans and T-Mobile T-shirt, said that the pieces were finally in place for T-Mobile, the nation's smallest national carrier, to disrupt the industry. And he immediately started berating his competitors for creating overly complicated plans and pricing structures that did nothing but confuse consumers.
"These rate plans are so complicated," he said. "They make no sense."
No contract plansHe said that contracts unfairly lock customers into a particular device for two years. Within a few months of being in a contract, he says, the devices usually become outdated, and yet customers are stuck with the phone and the contract. In the end, he said, carriers are only nice to their customers every 23 months when they're looking to sign them up for a new contract.
T-Mobile's new service plans are designed to change all of that, Legere said. And in addition to getting rid of the contract and the phone subsidy, he said that T-Mobile customers are actually going to get a better deal than they would from his competitors.
While it's true that customers are being asked to pay full price for their devices, Legere said that T-Mobile will offer devices at a lower cost than its competitors. And even if customers choose to finance their devices over two years, he said that the company will not charge interest on these devices. In end the total cost of the device will be considerably less than if the device was bought from a competitor, Legere argued, and the monthly service price will also be cheaper, meaning even more savings for consumers.
"Stop the bullshit," he said. "It's $1,000 less for a T-Mobile phone over two years than on AT&T."
He explained that other carriers are charging a lot more as part of their service. And as a result their subscribers are paying much more for their devices.
"It would be a great day if all you paid was full price" for a device, he said. "You're paying so much more!"
He cited the iPhone 5 as a perfect example of this. Not only is T-Mobile finally offering the iPhone to its customers, but it's going to be selling the device at a lower price than its competitors. Starting April 12, T-Mobile customers can get the iPhone 5, introduced last fall, for a $100 down payment and then $20 a month for 24 months. That's a total of $580 for the iPhone 5. Meanwhile, the iPhone 5 is sold for $650 at full retail price from other carriers.
But the savings don't stop with the phone. T-Mobile is also offering customers a good value on its services. When compared to similar plans offered by Verizon Wireless or AT&T, wireless customers could save about $20 a month, even if they choose to subsidize a brand new smartphone.
For individuals, plans start at $50 per month, which will deliver unlimited talk, text, and data. This basic plan, though, entitles you to only 500MB of high-speed data (more on this in a minute). For up to 2GB per month of high-speed data, you'll need to shell an extra $10 a month (for a total of $60). And if you want truly unlimited high-speed data, that will cost you $70 per month.
Family plans are similar, but with higher pricing. The base plan for two lines brings the same unlimited talk, text, and 500MB of high-speed data for $80 per month. Adding high-speed data, however, will increase your bill $20 per tier (for 2GB or truly unlimited).
Regardless of the plan selected, customers will not have to commit to using the service for a set length of time. So, provided that you've paid off a new device, you can end your service at any time without penalty. Also, all plans include the carrier's Smartphone Mobile HotSpot feature for device tethering.
The company also emphasized the "unlimited" nature of its data plans. While this is a bit of a misnomer for the majority of the company's plans, it is true that T-Mobile does not charge overage fees when customers exceed a certain threshold of usage. But the company has priced its plans such that on the lower tiers of service, if you exceed the maximum, your service will be slowed until the beginning of the next billing cycle.
During a question-and-answer period, Legere was vague about what if any throttling will take place for customers using the $70 unlimited plan. He said that the company has put in place a "fair use" clause in its contracts, which means that if the company believes someone is abusing the service, the carrier can throttle the speeds. But he emphasized that no customer would have their service cut off.
'Smoking fast LTE'
T-Mobile also took the wraps off its new LTE network, which Legere described as "smoking fast." He said that the company has spent $4 billion to upgrade its new network, which will launch using its 1700MHz AWS spectrum in seven cities.
The carrier plans to cover 100 million people with its service by the middle of this year. And it expects to cover an additional 200 million by the end of 2013.
Legere also emphasized the importance of T-Mobile's HSPA+ network. And he said that when customers are not in an LTE market, they will still likely get the carrier's "HSPA+ 42" service, which is nearly as fast as its competitors LTE networks.
He announced a slew of new LTE devices that will launch on the company's network, including the BlackBerry Z10, HTC One, and Samsung Galaxy S4, which is expected to be available in early May on T-Mobile. The initial cities that will get the service include Baltimore; Houston; Kansas City; Las Vegas; Phoenix; San Jose, Calif.; and Washington, D.C. New York is expected to have T-Mobile LTE by early summer.
The long-awaited T-Mobile iPhone
But the big news that seemed to stir much of the excitement for the company was the addition of the Apple iPhone to the T-Mobile device lineup. Legere said that the iPhone 5 will go on sale April 12. As mentioned earlier, it will be less expensive than on its competitors' networks. And it will not require a contract.
That said, the T-Mobile iPhone 5 will be locked to T-Mobile until it is fully paid for. The iPhone 5 will be able to connect to T-Mobile's HSPA+ 42 network and it will have access to T-Mobile's LTE network.
This is an improvement for T-Mobile iPhone users, who have had to bring unlocked iPhones, usually from AT&T, to the network. Because of T-Mobile's efforts to upgrade its network and move services from one location to another, it's now able to offer high-speed service to iPhone 5 customers.
T-Mobile will also offer the iPhone 4 and iPhone 4S in certain markets and through certain channels as well. But the company did not elaborate on that.