Mon January 20, 2014
T-Mobile CEO Swears (Like A Sailor) That Industry Will Change
Originally published on Mon January 20, 2014 7:44 pm
MELISSA BLOCK, HOST:
And it's been a big year for T-Mobile. The telecom company finally landed the iPhone. It started trading as a public company and has kicked off a price war with its competitors. In the process, it's become the fastest-growing mobile phone company in the country, recruiting 4.4 million new customers. But as NPR's Steve Henn reports, T-Mobile's combative and profane CEO, John Legere, is grabbing all the headlines.
STEVE HENN, BYLINE: It's pretty rare for a corporate executive to try to ingratiate himself with the FCC by swearing like a sailor. But that seems to be exactly what T-Mobile's CEO John Legere is trying to do.
JOHN LEGERE: We are either going to take over this whole industry, or these (bleep) are going to change.
HENN: In his own foul-mouthed way, he's kicked off a price war in the mobile phone business by offering to buy consumers out of their existing contacts, paying up to $650 dollars apiece.
LEGERE: The whole industry is going to shift, and we will still be highly successful. And I don't give a (bleep) either one of those things because we're going to win and that's a lot of fun.
HENN: A few days earlier at the Consumer Electronics Show, AT&T had managed to give Legere and T-Mobile millions in free publicity by kicking him out of a party where the rapper Macklemore was hired to play.
LEGERE: And I just looked at these people and I said, listen, it's not why I came here. But do you have any idea how much material you're going to give me if you do this?
HENN: They tossed him anyway. It was a John Legere classic of jujitsu marketing. And in D.C., regulators and consumer advocates like Michael Weinberg at Public Knowledge are eating it up.
MICHAEL WEINBERG: It did seem like CES was something of a coming-out party for him, where he got a lot of attention very quickly.
HENN: But it's not John Legere's antics that endear him to consumer advocates. Instead, the CEO of the fourth largest mobile phone company has injected something almost unheard of into the wireless industry: real competition.
WEINBERG: T-Mobile is important because when they do something, it forces the other carriers to react. And when the other carriers react, often they're reacting in a way that is very pro-consumer and that is giving people more choices.
HENN: Two years ago, after failing to merge with AT&T, industry analyst Jeff Kagan says the company looked like it was dying.
JEFF KAGAN: T-Mobile was stuck with a slower network and they were losing customers.
HENN: But in the past year, T-Mobile took the $7 billion fee AT&T paid the company when its proposed merger was blocked by regulators and invested it in its network. Then it started aggressively going after other companies' customers. Today, T-Mobile is targeting 20-somethings. It uses Legere's tweets for free publicity and it competes aggressively on price. It's simplified contracts made upgrading your phones easier, ended roaming charges for international data, and just a few weeks ago, offered to pay consumers up to $650 just to switch carriers.
LEGERE: Contrary to public belief, I'm not crazy. I know exactly what I'm doing and, yeah, I think this company needs to be on the edge.
HENN: Legere says he's trying to drive a revolution in this industry and force mobile phone carriers to compete for customers on price and quality instead of locking them in with long-term contracts. But at the same time, T-Mobile's majority owner, Deutsche Telekom, has been trying to sell this company. The most likely buyer is Japanese billionaire Masayoshi Son, who also happens to own T-Mobile's weakest rival, Sprint. And the merger rumors have advocates of vigorous competition in the wireless industry nervous.
Why should I, or anyone else, believe that if there is a merger between T-Mobile and Sprint that this kind of really aggressive, competitive behavior is going to continue? I mean, it would be debt-financed.
LEGERE: Great question. No, great question. You know, just asked - the question you're just asking. What's important for the U.S. industry is the change that the maverick is creating. That's T-Mobile.
HENN: Legere argues allowing Sprint and T-Mobile to merge would just make that maverick stronger, at least as long as he was left in charge. And before John Legere was the CEO of T-Mobile, he ran another company, Global Crossing. Masayoshi Son was one of its owners. So while Legere is impressing 20-somethings with his taste in rap and his tweets and trying to convince regulators that a merger between Sprint and T-Mobile wouldn't actually hurt consumers, he also seems to be auditioning for a new job from his old boss, running a combined Sprint and T-Mobile.
LEGERE: I just know that what I've got - myself, my leadership team, my company, my brand, the growth - is one of the biggest missing things in the industry. So if I was Masayoshi Son and I was interested in T-Mobile, I would say, you know, I got to - I like what they do.
HENN: John Legere may swear for effect but as he's quick to point out, he thinks he knows exactly what he's doing. Steve Henn, NPR News, Silicon Valley. Transcript provided by NPR, Copyright NPR.