T-Mobile (NASDAQ:TMUS) CEO John Legere has led his company to unprecedented growth partially by being brash on Twitter (NYSE:TWTR). The executive takes shots at his competitors, toots his own horn, and generally makes a spectacle of himself.
One of his frequent targets in recent months has been Sprint (NYSE:S), whose former CEO, Dan Hesse, didn't use the social-media platform. New Sprint boss Marcelo Claure, however, is an active Twitter user, and while he's not as confrontational as Legere, he is at least taking the fight to T-Mobile, as well as Verizon (NYSE:VZ) and AT&T (NYSE:T).
Legere's Twitter style is aggressive -- sort of part Don King, part rapper boasting about why his rhymes flow better than someone else's. Claure is more restrained, using a lot of posts to simply pass on info while using retweets (such as the one below from @derrph) to take shots at competitors.
Our plan: have Data Strong network, listen to customers. @Sprint plan: trick customers w/ confusing offer, keep crap network, watch 'em run.— John Legere (@JohnLegere) August 24, 2014
Legere seems to have no filters and is willing to say things that few CEOs would. He's direct, suffers no fools, and seems a little full of himself in the way that top athletes are. This has been very good for T-Mobile, which has had five consecutive quarters with over 1 million total net customer additions.
Claure, who was appointed Aug. 6, has not been in his job long enough to have produced measurable results, but he has been bold in his actions. He quickly eliminated the confusing "Framily" plan, lowered prices, and generally stopped the bleeding.
A brief history of Sprint and T-Mobile
For many months Legere has focused his Twitter ire on AT&T and Verizon because Sprint and T-Mobile were expected to merge, with Legere taking the CEO spot for the combined company. When the deal fell through, Legere made passing Sprint for the No. 3 wireless carrier slot his top stated priority.
T-Mobile closed its second quarter with over 50 million subscribers, while Sprint claimed over 54 million in its most recent financial release. During Q2 T-Mobile added 1.5 million new subscribers, while Sprint lost 220,000. Project those numbers forward, and T-Mobile makes up its 4 million subscriber deficit with Sprint in under nine months.
Claure's joining Sprint, however, is a deal changer. While Hesse acted like he was above the fray as his company slowly sank, his replacement has followed Legere's lead, albeit with his own spin. Before Claure took his seat, T-Mobile and Legere were telling the world the Sprint story. Now at least Sprint has a boss who can control the narrative and not just allow his company to be painted as unsuccessful with a lousy network by its chief competition.
Why Twitter matters
Before Claure, Legere had the social-media platform to himself. Hesse, and AT&T's and Verizon's CEOs didn't use the technology, which clearly resonates with phone buyers. Legere has focused more on AT&T than he has Sprint, at least until recently, but his over half a million followers gave him a powerful platform to tout his own deals and take shots at his rivals.
Legere is playing preacher speaking to an audience ready to say "amen." Posting a Tweet that says "We're changing this ludicrous industry! You know why? Because you told us to! You told us to eliminate the BS! #WeWontStop #uncarrier7" puts Legere on the side of the people. That leads to retweets, comments, and a ton of free advertising.
Using Twitter the way Legere has with a well-crafted populist message has made the T-Mobile message viral. That has also spread to other media, as there have been countless news stories that report on what the CEO posts.
With only just under 40,000 followers, Claure has a long way to go before he can equal his rival's reach, but being behind in the game is much better than not playing at all.
The coming opportunity
While T-Mobile has built up tremendous momentum, the fact that AT&T and Verizon still charge higher prices leaves a door open for Sprint. It's also early in the mobile-phone game, and T-Mobile recently put out a press release that details how big the potential for gaining new customers is. "This summer, Morgan Stanley reported that a full 33% of U.S. wireless customers are likely or somewhat likely to switch carriers this year," T-Mobile Chief Marketing Officer Mike Sievert wrote.
AT&T and Verizon each have over well over 100 million subscribers, and both generally have higher prices than T-Mobile and Sprint. That leaves a huge door open for the smaller companies to make inroads.
Previously, only T-Mobile was properly selling the low-cost, no-more-nonsense message. Now, with Claure, Sprint has a story to sell as to why AT&T and Verizon customers should switch. That may not keep the No. 3 carrier ahead of T-Mobile, but it should keep the company from falling out of contention.
Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Twitter. Try any of our Foolish newsletter services free for 30 days. 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.