As CEO pledged, T-Mobile eases users' 'pain points'

T-Mobile made perhaps its boldest move yet last month: An offer to buy customers out of rival carriers' contracts.
T-Mobile made perhaps its boldest move yet last month: An offer to buy customers out of rival carriers' contracts. (PATRICK T. FALLON / Bloomberg)
Posted: February 03, 2014

Could T-Mobile, the nation's fourth-largest wireless carrier, prove to be the most effective consumer advocate ever for America's cellphone users?

That may have seemed like hype a year ago, when T-Mobile's colorful CEO, John Legere, first promised to ease customers' "pain points." But true to his word, T-Mobile went on to target a set of chronic and costly irritants faced by wireless users - irritants its rivals had let fester, probably because customer pain equaled carrier gain.

Not that they were hard to find. For instance, U.S. travelers had long complained of unexpected charges - sometimes thousands or even tens of thousands of dollars - for "data roaming" overseas. Even some who planned were dinged by fees that could double or triple their bills for use that back home would be routine.

In 2011, federal regulators finally pushed carriers to do the minimum: Send texts warning travelers who faced imminent "wireless bill shock." As I can attest after a road trip last year to Canada, the warnings sometimes come too late to help.

Last fall, T-Mobile largely eliminated the problem for its customers. Subscribers to its no-contract Simple Choice plans pay a flat 20 cents per minute for wireless calls while overseas. And their international data roaming is free.

True, that roaming comes at a relatively slow rate of 128 kilobits per second - enough for e-mail, Web browsing, or using a GPS service like Google Maps, but not well-suited, say, to watching YouTube or Netflix videos. But it's hard to imagine customers preferring a jaw-dropping bill.

T-Mobile's ads highlight its "Uncarrier" path. While AT&T was touting "the nation's largest 4G network" last fall with painfully cute kindergartners explaining why "More Is Better," T-Mobile tried edgier comedy: The parents of an errant world traveler named Jeremy are desperate to stop him from data roaming before they go broke.

"For cryin' out loud, Jeremy, close an app!" pleads his mom on Day 3 of the "Catch Jeremy" campaign. By Day 17, Mom has had to go back to giving piano lessons, and Dad is begging, "Son, stop using your phone."

Legere wrapped up the campaign himself on the eve of last month's International Consumer Electronics Show in Las Vegas, where T-Mobile showed a video of the CEO delivering a check for $74,787 for Jeremy's bill to an AT&T store.

Legere, who last year trash-talked AT&T's New York City network and this year got tossed after crashing one of its CES events, often seems to be singling out the number-two carrier. Since they use similar technology, it's especially easy for AT&T and T-Mobile to peel off each other's customers. But he's clearly taking broader aim.

Other "pain points" T-Mobile has targeted included the mix of contracts and phone subsidies Verizon and AT&T have long used to lock in customers, especially those on family plans, where each individual upgrade extends a contract term.

In March, T-Mobile introduced its no-contract Simple Choice plans, since adopted by more than 12 million of its 46.7 million customers. Instead of getting a "free" or nominally inexpensive phone in return for a contract with an inflated monthly price, customers pay the full price of, say, a $600 iPhone. But they can pay in interest-free monthly installments that eventually end.

In July, T-Mobile introduced its $10-a-month Jump! service that allows subscribers to upgrade their phones as often as twice a year - a program that pays off remaining charges for the previous phone, and that analyst Roger Entner says has "really resonated with people" frustrated by other carriers' upgrade limits.

And just last month, T-Mobile made perhaps its boldest move yet: an offer to buy customers out of rival carriers' contracts. As an incentive to switch, T-Mobile will pay up to $350 per line in early-termination fees, plus up to $300 apiece for trade-in devices. AT&T countered, but so far with an offer only targeting T-Mobile.

One thing that hasn't changed: T-Mobile's pitch. "We said we would really start being a consumer advocate in a broken and arrogant industry," Andrew Sherrard, senior vice president, told me last week. "And we've delivered on our promise."

Hype? Not at all - but there was a lot to fix.


jgelles@phillynews.com

215-854-2776 @jeffgelles

www.inquirer.com/consumer

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