T-Mobile has become one of the rare companies that can make its press events a must-see attraction.
That's something the top technology companies have been able to do, driven by consumer interest in the latest phones, games, computers, and other gadgets. In the wireless space, however, T-Mobile CEO John Legere has created something that rivals AT&T,Verizon. andSprint can only dream about having.
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Whenever he takes the stage to announce T-Mobile's latest Un-carrier campaign, the press is waiting. That's only partly driven by Legere's bigger-than-life rock star persona. It's also fueled by the fact that when the No. 3 wireless carrier makes an announcement, it's almost always something that rattles the industry.
Un-carrier X was no exception.
T-Mobile teased the video-based nature of the announcement with this screen, which preceded the live event. Source: T-Mobile
Starts with a bangPrevious Un-carrier events have dropped bombshells, including the end of two-year contracts and phone subsidies, roll-over data, new pricing plans, and, most importantly, the end of overage fees.
This time around, Legere took the stage to pulsing music. Call it part political rally, part rock concert, and part religious revival.
"Happy Un-carrier Ten," the CEO said, welcoming the nearly 800 company employees that were in the crowd. He also called out the employees from the competing networks "who will watch what we do and copy it by tomorrow".
Significant industry change"The Un-carrier stood for fixing customer pain points to fix a broken, stupid industry," Legere said before taking some profanity-laden shots at AT&T and Verizon, referring to them as "dumb and dumber". He also noted that the two leading carriers remain married to overages and the idea that consumers will run up large bills.
"We're not stupid," said Legere, explaining that his company doesn't give stuff away but rather does things smarter and treats people better. He explained that the latest Un-carrier initiative gives customers what they want in a way that makes sense for the company and its investors.
Legere was very animated. Source: T-Mobile
The CEO, in the lead-up to his major announcement, noted that just in the past few years, smartphones have changed dramatically with all content moving to the Internet. He said that everything being done today would deal with "the growing problem of dealing with data".
It's data day"Simple Choice was the start of this thing. It's so easy. How many lines, how much data," Legere said, standing in front of a sign that read "Simple Choice Amped."
To do that, the CEO said, "we're going to double your data." If you had a 1GB plan, that means you now have 2GB for the same price. The same applies to the company's 3GB and 5GB plans as well.
T-Mobile will also be increasing the data amount in its family plan, letting any family that wants to move up to a higher tier together do so at no cost. The company's family data plans are per person, not a shared bucket like AT&T and Verizon offer. The company also cut prices by 15% for families who want to mix and match, where one person wants more data and another wants less.
"Family plans were the biggest ill of this industry," Legere said. "People hate sharing their data. Sharing equals overages and overbuying."
Like all T-Mobile plans, the new family data offer doesn't charge overages. Instead, it slows down data speeds until the end of the billing period.
It's a problem of overbuyingLegere said the other carriers will charge $2.4 billion in overages in 2015. He also said the numbers have been increasing year-over-year, calling out Verizon specifically for increasing the amount of costumers it billed for overages.
"Overage charges are the No. 1 most hated thing in the industry," he said. That, he explained, is only a drop in the bucket, because people who get hit with overages then upgrade their plan, leading them to have too much data, which they forfeit at the end of the billing period.
How is T-Mobile solving this?In addition to offering more data at the same price, T-Mobile also plans to make it easier for its users to consume video. Legere talked about how people want to watch video, but overages from the other carriers have them scared.
"A big portion of data is needlessly wasted," he said, noting that most video is created for TVs, not phones. "Customers want reliable video. It's a big, big pain point."
To alleviate that problem, Legere announced a plan to offer video streams optimized for phones. Called "Binge On", the service lets T-Mobile customers watch content from 24 top video sources, includingNetflix, HBO, ESPN, and many more without using any of the high-speed data in your plan. The service also works with DISH Network's Sling TV service, which is being offered to T-Mobile customers at a 30% discount.
"Binge on. Stop watching your data and start watching your shows," the CEO said. "This is open to any service which wants to come."
The service is similar to T-Mobile's Music Freedom program, and it's free to customers and the content providers.
"We've optimized the video stream. ... This is DVD quality or better but optimized" to use less data, Legere added. He said that the service should particularly appeal to millennials, of which 57% watch their content only on phones and tablets, according to Legere, who showed a prediction that video data use would increase 400% by 2020.
If that happens, AT&T and Verizon customers would see their overage bills increase -- or they'd have to stop watching when they run out of data.
Binge On is available to all T-Mobile customers for free. Source: T-Mobile
Throwing down the gauntletLegere's clear point was that his rivals plan to use video as a way to increase how much data people stream. By offering premium video at no cost of data, Legere believes he can add customers at the expense of his competitors.
"All in one day ... we've taken the most famous plan in wireless and we've doubled it," CFO Mike Sievert said.
The new changes take effect Nov. 15, as does a $120-per-month special offer of 6GB for each member of the family. In addition, customers paying for unlimited 4G LTE will now be able to use up to 14GB of high-speed data when they tether another device to their phone. T-Mobile also announced a new offer for business customers that doubles data on their plans as well.
The article T-Mobile US Inc: Un-carrier X Offers Free Streaming Video and Doubles Data originally appeared on Fool.com.
Daniel Kline has no position in any stocks mentioned. He is a T-Mobile customer and somewhat believes the hype.The Motley Fool owns shares of and recommends Netflix. 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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