T-Mobile (TMUS -1.20%) periodically makes a big, splashy announcement with the newest change to its service. Since these changes are meant to differentiate it from other carriers, T-Mobile named them Un-Carrier moves.
Not all Un-Carrier moves are worthy of the splashy announcements CEO John Legere and his team make for them. But some are outright home runs that are not only newsworthy, they also ignite change in the industry.
At a recent investor conference, CFO Braxton Carter talked about what he thought were the company's most successful Un-Carrier moves -- and one he felt didn't quite work out.
Solving a pain point for customers and T-Mobile at the same time
Most of T-Mobile's moves are designed to address a customer pain point. One such pain point (at least three years ago) was that video streaming was rapidly eating into consumers' data allotments.
T-Mobile took the initiative to white-list video streaming apps on its network, which means the data used to stream video didn't count against a customer's data plan. In exchange, the customer had to agree to stream video at a 480p resolution, which ought to be sufficient for most customers on most mobile devices. The move was called "Binge On."
Binge On did two things for T-Mobile. First, it actually reduced the amount of data used on its network because consumers were no longer streaming as much HD video content. Second, it laid the foundation for T-Mobile to offer unlimited-data plans a year later.
The latter move had a notable impact on both AT&T (T -2.22%) and Verizon (VZ -0.77%). Verizon, in particular, suffered considerable customer losses before it finally gave in and started offering an unlimited-data plan to customers.
Binge On also set the framework for T-Mobile to include Netflix subscriptions with its family plans. That's another move that was quickly copied by Sprint (S) with Hulu, and AT&T with HBO (and later its own Watch service). But by moving first, T-Mobile was able to align itself with the strongest brand in premium streaming video.
Carter also mentioned that he liked two other moves: Carrier Freedom and Simple Global.
Carrier Freedom followed up on an earlier move that would pay early termination fees for existing wireless contracts when customers switch to T-Mobile. On top of that, Carrier Freedom would pay off customers' devices still on equipment installment plans when they traded them in to T-Mobile. That enabled T-Mobile to attract more customers to its service.
Simple Global was one of T-Mobile's earlier Un-Carrier moves. It gave customers free texting and unlimited 2G data in about 100 countries at no extra charge. The company has since doubled the number of countries it supports, making it particularly appealing to world travelers versus other major carriers. None of the other major carriers have come close to matching the offer for global data service.
Carter noted that not all Un-Carrier moves were a success, and when asked to call out one that he though didn't go so well, he was quick to point to Test Drive.
This was a program launched in the summer of 2014 in which T-Mobile would lend prospective customers an iPhone 5s and seven days of wireless service in order to test out its network. Ultimately, Carter admitted, it was too complicated for most consumers to take T-Mobile up on the offer, which means it was an inefficient use of marketing funds.
Carter did note, however, that there may be an opportunity for a similar program in the future thanks to eSIMs that come in newer high-end phones. eSIMs basically enable customers to switch carriers with a simple software update instead of requiring new hardware, which would dramatically reduce both the cost and complexity of a program like Test Drive.
T-Mobile has already shown an interest in reviving Test Drive, recently offering a 30-day trial to potential customers in select cities to test its new 600 MHz network. As more high-end phones with eSIMs get into the market, it wouldn't be a surprise to see T-Mobile offer another Un-Carrier move to prove the strength of its network to skeptical consumers on Verizon or AT&T.
In fact, investors should expect most future Un-Carrier moves to center around enabling customers to take advantage of T-Mobile's network. That means getting the right devices into the hands of customers through device promotions, more customer service initiatives, and clever ideas like Test Drive -- which may have been just a bit ahead of its time.