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T-Mobile's "radical" changes double-down on flat-rate data plan

John Cox | March 28, 2013
In a profane, foul-mouthed, ad-libbed presentation, T-Mobile CEO John Legere Tuesday trumpeted his company's previously announced "unlimited" data plans, scrapped its cellular contracts, launched its belated LTE network, and revealed that T-Mobile, finally, would offer the iPhone.

In a profane, foul-mouthed, ad-libbed presentation, T-Mobile CEO John Legere Tuesday trumpeted his company's previously announced "unlimited" data plans, scrapped its cellular contracts, launched its belated LTE network, and revealed that T-Mobile, finally, would offer the iPhone.

He said the announcements marked the end of T-Mobile's membership in the "carrier club."

Striking the tone of a junior high school pep rally without adult supervision, Legere mocked, taunted and attacked not only his rivals, especially AT&T, and the cellular industry's "stupid" practices and conventions, but also the press and bloggers covering the event in New York City.

When Legere was named to the CEO post just last September, it was widely noted then that he lacked "wireless industry" experience, a fact he reminded the by-now captive assembly of reporters. It caused him to question himself, he said. "[I said to myself] 'Holy s*** I don't have wireless experience,'" he said. "What the hell does this mean?"

It meant that he was an outsider, and that's a good thing. "The worst fear of the wireless industry is that someone from the outside would come in and look at their industry," he said.

He came, he saw, he cursed. He saw the industry through the eyes of its customers, he assured this audience. "I'm a customer, just like you," he said. "Here's my experience."

That experience was defined by:

+ "Unbelievably high prices for phones...Please stop the bulls****. It's crazy."

+ "Complicated rate plans...These contracts are so complicated, they make no sense. It's on purpose: they don't want you to see...."

+ "Contracts...no one wants to have them. When you sign it, you're locked into that rate plan and that phone. Carriers are really nice to you once every 23 months [when you first sign and then are up for renewal]." In between, "you call [customer] care and it's terrible."

Legere's "solution" to all this pain and suffering is, in effect, nothing more and nothing less than a price war, laid bare by the "revolutionary" step to discard contracts and multiple rate plans.

Here's what Mr. "I'm a customer just like you" announced.

* Lower prices for phones

But not really. Essentially, T-Mobile seems to be offering lower down payments, spreading the balance over 24 equal payments (in other words, a two-year contract to pay for the phone), and a discount off the full price it charges to customers.

For example, to get the iPhone 5 on T-Mobile, and assuming your credit rating is good enough, you make a down payment of $99, and then pay $20 a month for 24 months. The company hasn't said whether that monthly payment includes interest on financing. That total is $579.

 

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