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T-Mobile Resolves To Transform the Industry -- But How?

T-Mobile Resolves To Transform the Industry -- But How?
January 2, 2014 10:13AM

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T-Mobile’s next act may focus on termination fees charged by competitors. T-Mobile may pay the termination fees customers are charged to leave their carriers early in order to increase its own market share. This is a new threat from a small competitor that T-Mobile's competitors will watch.

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T-Mobile USA CEO John Legere, known for his attention-getting marketing efforts, has taken to Twitter with 2014 resolutions that could further disrupt the wireless industry. “Let the transformation begin,” Legere wrote in the text prefacing the image.

In a tweeted photo, Legere showed a side-by-side image of 2013 Resolutions to “shake up” the wireless industry -- all checked off. Those included ending two-year service contracts, ending upgrade runarounds, making the world your network -- no extra charge, unleashing tablets and giving free data for life, and delivering an nationwide 4G LTE network.

Now, Legere is focused on transforming the wireless industry. His resolution list includes: continuing to remove customer pain points; faster and louder 4G LTE; unshackling the family from “those other guys”; making waves at the 2014 Consumer Electronics Show (CES), and “giving AT&T a break . . . or not.”

Unveiling Houdini at CES 2014

We caught up with Jeff Kagan, a technology industry analyst, to get his take on T-Mobile’s 2014 moves. He told us the company is unveiling its next marketing strategy, codename Houdini, at the CES in Las Vegas this month.

“T-Mobile’s next act may focus on termination fees charged by competitors. They may pay the termination fees customers are charged to leave their carrier early in order to increase their own market share,” Kagan said. “Will this have a real impact on the marketplace? That has yet to be proven, but this is a new threat from a small competitor that competitors will watch.”

As he sees it, T-Mobile was seemingly in a coma for few years before suddenly waking up, full of energy. The company isn’t just vying to change itself -- it is taking steps to shake up the entire wireless carrier industry.

Raising the Churn Rate

“T-Mobile is not the only carrier that is changing. Sprint with SoftBank is another. These are two carriers who seem to be on a stronger footing and seem to have a similar goal,” Kagan said. “They both want to improve themselves and change the industry.”

Will T-Mobile be successful at changing the wireless industry moves in 2014? Even without T-Mobile in the mix, Kagan said the wireless industry would be changing. However, he added, the threat of a more competitive T-Mobile and Sprint for that matter will tend to keep the big guys on their marketing toes.

“If T-Mobile continues to grow, will churn increase with larger carriers? Churn is always ticking up and down, year after year. I don’t expect that to change,” he concluded. “However, let’s keep an eye on all the competitors. It will be interesting to see who T-Mobile wins customers from and why. 2014 may turn out to be a very interesting year.”

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