Legere: T-Mobile One Plan Drawing Switchers, Not Device Promos

T-Mobile CEO John Legere this week said flagship device launches are a great opportunity to bring in new customers, but noted the majority of switchers are actually drawn by the value in its T-Mobile One unlimited plan.

Speaking during T-Mobile’s Wednesday earnings call, Legere noted the Un-carrier remained porting positive against all its Tier-1 competitors. The overall porting ratio stood at 1.38 for the quarter, Legere said, with a ratio of 1.2 against Verizon, 1.3 against Sprint, and 1.63 against AT&T. But Legere pointed out that customers were coming to T-Mobile for its unlimited plan rather than to take advantage of device deals or other temporary promotions.

“We have been seeing real success with people picking T-Mobile catalyzed by a new phone choice, but it’s not always because of something we do around the phone value proposition. In fact, people are coming to T-Mobile because of T-Mobile One,” Legere said. “We took all of the postpaid phone net adds in the last quarter and we expect to again this quarter, but we did it by focusing on our service value proposition and our differentiation – T-Mobile ONE – not necessarily through doing something differentiated on the phone offer itself. And that’s a formula we are very comfortable with.”

COO Mike Sievert added it was the inherent value of T-Mobile’s unlimited plan that allowed it to change pricing for T-Mobile One Plus without facing a massive backlash. T-Mobile recently raised the price of T-Mobile One Plus by $5 – a move Sievert attributed to the end of $5 promotional pricing for the add-on and the implementation of $10 standard pricing. Despite that shift, Sievert noted the add-on remains “incredibly popular.”

Legere also said he understands the reason competitors like Sprint have taken a different approach to their unlimited plan promotions – like offering a free year of unlimited – but noted T-Mobile shouldn’t necessarily try to one up those types of programs.

“I think it’s fair to say that a lot of what Sprint is doing are very aggressive ways to attempt to offset churn and to get some subscriber growth,” Legere observed. “I think even Sprint would probably not believe that some of their promos are sustainable, but we have been in that stage where you have got to get very aggressive and turn things around. So I don’t think those are programs that are meant to be responded to.”

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