T-Mobile (NASDAQ:TMUS) has had a busy start to the week. The company's CEO John Legere mocked T-Mobile's rival Verizon (NYSE:VZ) for finally offering unlimited data plans and the Un-carrier released its Q4 and full-year results.
T-Mobile reported an industry-leading 2.1 million total net additions in Q4, bringing it to 8.2 million adds for the full year. It also posted an 11% gain in services revenues in Q4 resulting in a full-year increase of 12%. Total revenue rose 23% for the quarter and 12% year over year.
"These results are proof that doing right by customers is also good for shareholders. Not only are customers flocking to T-Mobile, but we're also producing rock-solid financial results." said CEO John Legere in the earnings release. "The competition just doesn't get that customers want to come first! That's three years in a row that we've added more than 8 million customers and taken all of the postpaid phone growth in the industry."
The earnings report was strong, but it's in line with numbers the company previewed at the Consumer Electronics Show (CES) in early January. In some ways the numbers merely served as a cherry on top to Legere's busy week where he openly trolled Verizon for its new unlimited plans.
What did Verizon do?
Legere has been openly mocking Verizon for months and made a point at CES -- where his company announced all its plans were going unlimited -- of saying that his goal was to push his rivals into doing the same. He reiterated that statement in a blog post in which he pushed the idea that consumers should not accept limits or be forced to decide "how much Internet they want each month."
Verizon responded to that Monday (Feb. 13) by finally following T-Mobile and offering unlimited plans. The new plan includes one line for $80, two for $70 each ($140), three for $54 each ($162), and four for $45 a line ($180). Those prices require enrollment in auto-pay and do not include fees or taxes. The plans also includes the ability to use up to 10 GB of 4G LTE data as a mobile hotspot.
T-Mobile now only offers unlimited plans. Its advertised prices also require auto-pay and include taxes and fees. The company had charged $70 for one line, $120 for two ($60 each), $140 for three ($46.67 each), and $160 for four ($40 each) which did not include the ability to use 4G mobile hotspots. After the Verizon deals were announced, T-Mobile lowered its price for two lines to $100, and offered all customers 10 GB of high-speed (4G) mobile hotspot data.
T-Mobile takes credit
Never one to be modest, Legere took credit for Verizon making a move it has long resisted. He also pointed out that his rival had to change after a new report on wireless networks from OpenSignal showed that T-Mobile had erased Verizon's lead when it comes to network quality. That widely respected report essentially called it a draw between the two companies.
"I don't blame Verizon for caving. They just lost their network advantage, and they know it ... and more importantly, more and more customers know it. Their back's against the wall," said Legere in a press release. "This is what the Un-carrier does -- drag the carriers kicking and screaming into the future. Next up, we're going to force them to include monthly taxes and fees. Mark my words."
Best of both worlds for consumers
In addition to having fun mocking Verizon, Legere has proven that it's possible to make money while still being customer friendly -- the companies net income was up 99% year over year for 2016. And, T-Mobile was able to grow its Q4 earnings per share to $0.45, a 32% increase over 2015, while its full year EPS came in at $1.69, a 106% increase.
Since launching its Un-carrier initiatives, T-Mobile has tried to overhaul how the industry operates, and the company has forced massive changes. Verizon has clearly fought those moves, but Legere's company has caused the end of contracts, the demise of subsidized phones, and given consumers more options if they want to avoid overages. Now the company has forced Verizon into unlimited at the same time it has proven that putting customers first does not mean sacrificing business or shareholders.