John Legere: The Un-CEO Among Carriers, With An Attitude

Shaking up the wireless industry
Author:
Publish date:
T-Mobile's John Legere

John Legere, the edgy, foul-mouthed president/ CEO of Un-Carrier T-Mobile USA, is shaking up the wireless industry in ways that his counterparts didn’t want and, in a least one case, did want.

He reinvigorated competition among carriers, spurring round after round of service-plan price-cutting, launched initiatives that enabled the carrier to post its sixth consecutive quarter of more than 1 million net adds in its fiscal 2014 third quarter, and accelerated the pace of change in a somewhat stodgy industry.

For consumers, Legere initiated lower-priced service plans and handset trade-in policies that spurred competitors to promote lower service prices, pack more data into data plans, and offer more-frequent handset upgrades.

Legere also brought competition to a boil by reimbursing early-termination fees (ETFs) for individuals and families who make the switch to T-Mobile and trade in an eligible device. He let consumers stream a dozen music-streaming services without using up their high-speed data allotments, gave 200MB of free high-speed data to tablet owners, offered unlimited data and texting worldwide in 100-plus countries, and provided free Wi-Fi calling from anywhere in the world to and from the U.S.,

For handset vendors, renewed inter-carrier competition is lifting handset sales as consumers shift from one carrier to another, though it is also contributing to a surge in low-price handsets because Legere ignited the move away from subsidizing post-paid cellphones.

Legere launched T-Mobile’s first un-carrier initiative in March 2013, and in the third quarter of 2014, the company posted its sixth consecutive quarter of more than 1 million net subscriber additions.

Though his counterparts would have preferred to avoid the price wars that threaten their margins and stock valuations, the carriers are thankful that Legere ignited the move away from subsidizing post-paid cellphones.

The initiatives, however, have come at a cost. T-Mobile posted a $94 million net loss in its fiscal third quarter, marking the fifth net loss out of the past six quarters. The company posted operating income of $49 million, down from a year-ago $297 million and down from the second quarter’s $962 million.

Gartner analyst Bill Menezes believes the accelerated pace of marketing initiatives in one of the key attributes that makes Legere’s tenure at T-Mobile stand out. “Sure, under his leadership T-Mobile USA’s ‘Un- Carrier’ strategy has attracted millions of new customers, but the carrier hasn’t done anything that other carriers can’t or haven’t matched. What Legere has done through the force of his ideas and marketing is spur those other carriers to react with competitive offerings faster than they might have otherwise.”

AT&T and Verizon, he noted, have wanted to move away from the subsidized handset model for some time, “but until Legere’s team made unsubsidized handsets and contract-free service plans the standard offer from T-Mobile, they hadn’t acted.” The speed at which the competitors “reacted with similar offerings – expanding consumer choice for such plans – speaks to the disruptive force Legere has brought to the industry.”

He expects Legere to “continue pushing more rapid consumer service innovations than we would have seen had T-Mobile remained a distant also-ran in the business.”

For her part, IDC analyst Carrie MacGillivray agreed that Legere “has pushed T-Mobile to move at lightning speed, which is not common for carriers.”

He has also “boiled his business to the meat and potatoes – pricing and customer satisfaction.”

Legere is building his company’s base among younger people, she added. “He has been one of the first ‘social CEOs,’ taking to Twitter and social media with a vengeance to engage not only with the media but with his customers.” Legere also exudes “an edgy, rock star persona that appeals to the younger masses.”

Personality does not equate with performance, however. Leger’s ultimate success will be determined by his ability to make T-Mobile profitable on a consistent basis, and depending on that outcome, Legere could qualify again next year as a Newsmaker of the Year, but for all the wrong reasons.

Featured

Related Articles