First, T-Mobile (NASDAQ:TMUS) aggressively moved away from subsidies toward phone installment plans. Second, it unveiled an early upgrade program where customers can get the latest and greatest smartphone every six months. Third, the renegade carrier added unlimited data and texting while roaming internationally. Fourth, the company said it would cover early termination fees for customers switching from rivals.
Uncarrier 5.0 was unveiled last night, with CEO John Legere being his usual vulgar self. T-Mobile now wants to give you two more things for free.
Free iPhone? Yes, please.
T-Mobile says it wants you to "cheat on your carrier" with a seven-night stand. What it means is that it will send you an Apple (NASDAQ:AAPL) iPhones 5s for free, just so you can test out how fast its LTE network has become. After you take it for a spin, you simply return it at a local T-Mobile store -- and hopefully switch while you're there.
The company calls this program Test Drive, and Apple has partnered with T-Mobile to provide the devices. Legere also said the iPhone was picked to increase awareness that T-Mobile offers the iPhone. There are no deposits, obligations, or other strings attached. It's a bold move that exudes confidence. That confidence isn't misplaced as earlier this year OpenSignal named T-Mobile the fastest LTE network in the U.S.
T-Mobile's network had been lagging larger rivals for years, but the company has built out its LTE network at breathtaking speed. Among other events, getting all that AWS spectrum from AT&T (NYSE:T) in 2011 and merging with MetroPCS significantly bolstered T-Mobile's spectrum position. Legere says T-Mobile now has 70% more spectrum per customer than Verizon (NYSE:VZ) Wireless.
Test Drive is a strong marketing campaign that will allow T-Mobile to dispel any residual perception that its network is behind the times.
Free music? Yes, please.
Technically, T-Mobile calls its next initiative Uncarrier 6.0. As music streaming continues to grow in popularity, with T-Mobile estimating that 113 million people now stream music to their phones, T-Mobile is now offering free streaming for a handful of the most popular services. Music streamed from these services won't count toward data caps.
That includes Pandora Media, Rhapsody, iHeartRadio, iTunes Radio, Slacker, Spotify, Samsung's Milk Music, and the upcoming Beatport service. Taking it even a step further, T-Mobile partnered with Rhapsody for a new unRadio service. unRadio will be included for Simple Choice customers, and other subscribers can get it for $4 per month. The new service will be ad free and offer unlimited skips.
Notably absent from that list of supported services is Apple's new Beats Music, Google Play Music, and Amazon Music. Still, the company estimates that the supports services comprise 85% of the market.
When will it stop?
T-Mobile has made it clear that it won't stop with its aggressive tactics. Every few months, the carrier continues to pile on more and more reasons to switch. Legere was asked directly about the Sprint merger rumors, which he expectedly declined to comment on.
To T-Mobile's credit, it's absolutely working. It added more customers last quarter than AT&T and Verizon combined, although those customer acquisition costs are adding up. I was wrong when I said that T-Mobile's brave new world wasn't so brave. Slowly but surely, T-Mobile is changing the industry.
Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple and Pandora Media. The Motley Fool owns shares of Apple and Pandora Media. 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.