T-Mobile Takes Aim at Verizon With Its Newest Deal

By Fool.com

Source: T-Mobile

T-Mobile's John Legere has to be one of the most interesting CEOs. When he's not bashing Donald Trump, rival Sprint and its CEO Marcelo Claure, or snapping at journalistson social media, Legere is busy attacking the old oligopoly in wireless: Sprint, AT&T, and Verizon . While his latest tweets sometimes get more coverage than his business acumen, if you're judging wireless CEOs by subscriber growth, Legere is in a class all by himself.

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For example, over the past four quarters, T-Mobile has added 8 million U.S. subscribers, according to Strategy Analytics data. As a result, it has pushed past Sprint -- which reported anemic subscriber growth of 2.1 million -- as the No. 3 carrier in the U.S.

T-Mobile still didn't lead the industry in total sub-adds, as it was bested by market-leader Verizon's 11.5 million during that period. However, when looking at percentages, there's no comparison: T-Mobile's 8 million subscriber additions amounted to a growth rate of 16%, while Verizon's 11.5 million only represented year-on-year growth of 9.4%.

John Legere has never been the type of guy to walk away from a fight, and he's looking to attack Verizon with his newest deal.

Four lines with 10 gigabytes of data apiece for $120 For T-Mobile's newest Un-carrier initiative, the company is looking to shake up the family plan. The company's new plan is for unlimited talk, text, and low-end data for $100 per month for two lines. For high-speed 4G LTE data, each line will get 10GB, which is better than most shared-family plans, which offer a bucket of data for all lines to access. Additional lines -- with 10GB of data per line -- cost an additional $20 per line. For a limited time, however, the fourth line is free -- essentially, the deal is for four lines for $120.

In the press announcement, T-Mobile directly attacked Verizon's $80 shared data plan for seemingly false advertising [emphasis mine]:

Included in the press release is an outline of T-Mobile's deal versus Verizon's. T-Mobile is clearly a better deal as it presents lower costs and more data than competing Verizon plans:

Source: T-Mobile

Margin pressure for VerizonAlthough Verizon is the clear leader in terms of total subscribers, the company's wireless division is now facing increased competition. After paying an eye-popping sum of $130 billion to Vodafone, and executing the largest bond issuance everin order to buy back a 45% stake in its Verizon Wireless division, the company is now facing margin pressure, as competitors Sprint and T-Mobile are willing to sacrifice profit for the sake of gaining subscribers. Despite CEO Lowell McAdam famously declaring, "We never have and never will lead on price," the company has participated in discounts and promotions in order to compete.

And while Verizon does boast the largest and most comprehensive network, John Legere and T-Mobile are going to continue to hammer the company on price. The $130 billion question for Verizon and its shareholders is how much current and potential subscribers value its network over competitors'.

The article T-Mobile Takes Aim at Verizon With Its Newest Deal originally appeared on Fool.com.

Jamal Carnette owns shares of AT&T and Sprint. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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