T-Mobile CEO addresses Amazon phone, Apple deal

T-Mobile CEO addresses Amazon phone, Apple deal

Credit: Edward C. Baig, USA TODAY

T-Mobile CEO John Legere

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by Edward C. Baig, USA TODAY

NWCN.com

Posted on June 20, 2014 at 6:22 AM

SEATTLE — T-Mobile's loquacious CEO John Legere never misses a chance to take potshots at rivals. On Wednesday night at the Paramount Theater here, Legere unveiled the latest of T-Mobile's "Un-Carrier" initiatives to address what he says are industry pain points. T-Mobile announced a partnership with Apple, in which consumers can "Test Drive" an iPhone 5S that they request online and receive in the mail. They have seven days to "cheat on their carrier" and try it, after which they can drop off the phone at any T-Mobile store, no questions asked.

The company also announced that it would let consumers stream music for free on a number of popular music services, including Pandora, Rhapsody, iHeart Radio, Slacker, Spotify and iTunes Radio.

Afterwards, Legere spoke to USA TODAY's Edward Baig. . Excerpts from the conversation:

USA TODAY: What do you make of the exclusive AT&T-Amazon relationship?

LEGERE: I think the era for even having long-term exclusive arrangements is gone. I would suspect (their exclusive deal) to be brief. If somebody really wants to get that device unlocked from Amazon and use it on the T-Mobile network I would be highly surprised if they can't do that relatively immediately. . If this is highly successful it's good for the industry, another competitive device that gets people doing things that clearly are going to require large amounts of data.

USA TODAY: Is it too late for Amazon to enter the market with a phone?

LEGERE: I would have to say as a big Amazon user I'm a little disappointed. Classic distribution model, subsidized price with an exclusive provider. It's a very expensive phone. As an (Amazon) Prime user I wasn't given anything, except (12 months of) Prime that was given out as a carrot. All I heard so far is you can use the device to point at something and it tells you what it is. Except for certain late nights on Friday I usually know what I'm looking at anyway. But on the other hand Amazon is a big really powerful company that transformed an entire industry. It's never too late for them. We respect them.

USA TODAY: How is Test Drive different from being able to return a phone I buy after a brief trial period?

LEGERE: (The current way of doing things) is a dramatic event of high regret and remorse. You come in. You transfer your entire life to a new capability, sign a contract, This remorse period is: you lose your identity, you lose your number. You go home, you have second thoughts, you come back in and you go through that entire process in reverse. In the industry, 46% go home and are not happy. Ten percent actually go through that horrific double-shift (and return a phone).

For us there's two things: One, opportunity. We clearly believe that a test drive will show people things that they don't know. There's no big risk to you. And after seven days if it's really great, and it's a better value, you just became a potential switcher.

Second, some very small portion of those people were our customers, people that came in and we paid their ETF (early termination fee) and they went home and it didn't work for them. We don't want to go through that. I want that person to come back when it works for them and it will. Most importantly, it pits their old third-hand or multi-year old view of our network against (the work that we have) done (to make it what it is today).

USA TODAY: Did you go to Apple or did they come to you?

LEGERE: We went to Apple. Our partnership with Apple has gotten stronger and stronger. Apple is trying to answer the question, `how can I get a bigger percentage of your business? You're the fastest growing wireless company in the country.' Because of our history, we gear toward Android. This is a big deal for them as well and a big statement for how far the partnership's gone from no relationship to this. It's something they haven't done with anybody else.

USA TODAY: Might you do Test Drive with other devices? Android? Windows?

LEGERE: There's nothing about this partnership which stops us from doing it broader. It's another notch in the "change-this-industry" model.

USA TODAY: You chose many popular music services to offer unlimited free streaming but not all. And you're letting consumers vote on the next services to be included. What's behind that?

LEGERE: (We) cover 85% (of the streaming). We know where 85% of the traffic is but we don't know what the hot evolving (next) thing is. It might not be the one that is most obvious.

USA TODAY: You say you can't comment on the rumors of a merger with Sprint? But if such a deal were to happen, how does that impact the kinds of Un-Carrier moves you've made?

LEGERE: There are so many forms of our future including consolidation in the industry. My own opinion is that the Un-Carrier movement, the T-Mobile impact on the industry, is a very important part of the U.S. wireless industry. And I know that what would be important to us—and my board would consider everything—is an opportunity to find a way to add even more momentum and scale to the Un-Carrier movement. We need capital, we need spectrum, we need continued momentum. So we would look for those things in the decisions we make about bidding or not bidding or in potential relationships with partners or in potential consolidation. Frankly if anything is going to happen other than increasing the momentum of the Un-Carrier and T-Mobile, I'm not interested.

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