Please ensure Javascript is enabled for purposes of website accessibility

Report: T-Mobile Now Has the Best Wireless Network

By Daniel B. Kline - Aug 2, 2017 at 6:03AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The data deals a major blow to Verizon.

Verizon (VZ -0.17%) has built its business on charging more for its wireless service because it offers the best network.

That's a claim that has generally been proven by third-party research including the company coming in first on the recent RootMetrics Mobile Performance in the United States report. Verizon has taken top honors with RootMetrics eight straight times on the twice-annual report, something the company has celebrated in television commercials.

A second widely accepted independent report from OpenSignal, however, has shown somewhat different results. In the February version of the company's State of Mobile Networks study, Verizon and T-Mobile (TMUS -0.62%) were in a virtual tie, with each scoring first place in four of the eight overall categories.

In the latest OpenSignal report, released Aug. 2, things have changed. T-Mobile has moved into the top spot, taking first place in all eight categories.

John Legere

Legere has been prediciting this result for months. Image source: T-Mobile.

What happened?

In February, Verizon began offering unlimited data plans. That, according to OpenSignal, likely caused its network performance to get worse:

Six months after reintroducing unlimited plans, Verizon and AT&T experienced a marked decline in 4G speeds in our tests. The impact appears to have hit Verizon the most. Its average LTE download test fell 2 Mbps to 14.9 Mbps in the six months between reports.

The result, as well as the reason, is something T-Mobile CEO John Legere is likely to be very happy with. He has periodically tweeted that Verizon would see network degradation due to adding unlimited plans, and T-Mobile even recently launched a promotion, #GetOutOfTheRed, aimed at getting Verizon customers to switch.

"After desperately launching unlimited, Verizon's network choked -- while our network speeds surged," said Legere in the press release touting the new offer.

It's not just Verizon getting worse

While Verizon adding unlimited plans has clearly taxed its network, T-Mobile has also gained by improving itself. Legere's company has more 4G availability than its rival, albeit only a tiny bit more. OpenSignal testers were able to find a 4G signal on T-Mobile 90.9% of the time compared to 89.8% of the time on Verizon. In addition, T-Mobile had the fastest speeds among those tested with LTE download speeds of 17.5 Mbps and overall speeds of 16.1 Mbps.

This is a big win for T-Mobile that certainly backs up Legere's boasting. It's also a narrow one when you go beyond the national rankings and look at more local results.

"T-Mobile may have had the upper hand in our nationwide metrics, but in our city analysis, Verizon and T-Mobile were in a heated battle for dominance," wrote OpenSignal. "One of the two operators either won outright or tied for our 4G speed and availability awards in all of the 32 markets we examined."

What does this mean?

Consumers no longer need to pay more for Verizon in order to have access to a top-tier network. That's very bad news for a company that's built its business around charging more in exchange for offering what, for a long time, was a better product.

T-Mobile, led by Legere, has relentlessly attacked Verizon's business model over the years. You can argue that the only reason the company added unlimited plans as a choice was because T-Mobile made that a consumer expectation by having all its plans include unlimited data.

Now, though it will take time for consumer perception to catch up, Verizon is just another quality wireless carrier that charges more than a key rival. That should lead to more consumers being willing to change carriers.

Daniel Kline has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Verizon Communications. The Motley Fool recommends T-Mobile US. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

T-Mobile US, Inc. Stock Quote
T-Mobile US, Inc.
$145.94 (-0.62%) $0.92
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$44.12 (-0.17%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.