T-Mobile's 2014 Resolutions

T-Mobile doesn't plan on slowing down or leaving the big carriers alone in 2014.

Jan 6, 2014 at 2:00PM

T-Mobile (NASDAQ:TMUS) had a great 2013, disrupting the services of bigger carriers AT&T (NYSE:T) and Verizon (NYSE:VZ) with its "uncarrier" initiative. The company really shook up the wireless industry, as AT&T has mimicked several of T-Mobile's moves -- no contract, faster phone upgrades -- in an effort to prevent customers from leaving.

Now, CEO John Legere has some 2014 resolutions that T-Mobile tweeted out on Jan. 1. Here they are:

  • Continue to remove customer pain points
  • 4G LTE -- go faster, go LOUD
  • Un-shackle the family from those other guys
  • Make waves at CES 2014
  • Give AT&T a break... or not

The second and third seem to be the most important in gaining customers, and the plans T-Mobile has are pretty clear. AT&T and Verizon won't be standing still though.

4G LTE -- go faster, go LOUD
In 2013, T-Mobile went from no coverage to 254 markets covered by its 4G LTE network. Verizon and AT&T had a head start, and cover 500 and 488 markets, respectively. If T-Mobile can continue expanding its network at the same pace, it could be on par with the two largest carriers by the end of the year.

As each carrier's coverage map fills out, the focus will turn to network speed. AT&T currently boasts the fastest network, but Verizon and T-Mobile aren't far behind. Each carrier will have to make continued improvements, and T-Mobile is in an excellent position to do so.

T-Mobile plans to use its recently acquired MetroPCS airwaves to improve speed by combining both carriers' spectrums to form 20-by-20 service -- double the amount of spectrum T-Mobile previously offered. It recently started rolling out the service in Dallas, and plans to extend it to 90% of the top 25 markets. The speed of the rollout will depend on the company's ability to move around its existing network traffic.

To that end, T-Mobile and Verizon made a deal to swap airwave licenses in 518 counties. Verizon is exchanging high-speed advanced wireless service for T-Mobile's high-band personal communications service. The move will allow each company to clean up its spectrum and make it more contiguous. It may also help T-Mobile roll out its high-speed 20-by-20 service.

T-Mobile has a lot of catching up to do with its coverage, but it's already working on improving speeds. If it continues to lure subscribers away from the big carriers, it should be able to keep them around.

Un-shackle the family from those other guys
A report last month from TMoNews indicated that T-Mobile may be planning to pay off early termination fees for Verizon and AT&T subscribers. This may be what resolution No. 3 is referring to.

The reported plan offers AT&T and Verizon customers the option to trade-in their old phone for credit, then have T-Mobile credit you the balance on your early termination fee. This could accelerate the migration from the big carriers to the nation's fourth-largest.

AT&T isn't standing still, however. Last week, the company announced a similar plan, offering T-Mobile subscribers up to $450 in credit to switch to AT&T's service. The deal is only good for T-Mobile subscribers, and implies that the company sees the "uncarrier" as a real threat. It should.

AT&T reportedly lost phone subscribers in the third quarter -- although tablet subscribers more than offset the loss. Meanwhile, T-Mobile added 643,000 phone subscribers, which was even better than Verizon's 481,000 additions. It seems AT&T is getting hit harder than Verizon by T-Mobile's aggressive tactics. With T-Mobile's newest effort -- to offer free data for life on tablets -- AT&T may see its growing tablet segment slow.

Give AT&T a break... or not
T-Mobile is not going to slow down in 2014. Its 4G LTE rollout ought to continue, and it should be able to have comparable coverage to the big carriers by the end of the year. Its aggressive plan-pricing and special offers continue to drive AT&T nuts, and that will continue in 2014 with free data for tablets and a possible plan to pay-off early termination fees. The only thing that might stop John Legere from harassing AT&T is a buyout from Sprint.

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Adam Levy has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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