It seems like T-Mobile is always in the news and always making changes to how they do business – schooling and challenging Verizon, AT&T and Sprint on how to conduct business. T-Mobile took a dip in income and has tried investor's patience on many an occasion, but as their subscriber base grows…they finally past Sprint to become the third largest carrier in the US…so does their bottom line. T-Mobile still needs to expand their coverage, but they are working on that.
At the J.P. Morgan Technology, Media and Telecom Conference, T-Mobile's Chief Financial Officer (CFO) Braxton Carter talked about T-Mobile's programs, performance and future ideas. He said that "a little over 50-percent" of T-Mobile's subscribers are taking advantage of their family plans, and within these plans, they have about 2.4 lines of service. With only 50-percent signed up, he sees that as a great opportunity to sign up more families to these plans. Of course, the family plans are a two-edge blade – families that sign up for these plans are more likely to stay with T-Mobile and they cost less to acquire than single lines. However, by giving say unlimited calling and text as well as 10GB of Data, their ARPU (Average Revenue Per User) goes down – something investors look at very carefully.
The original Family Plan launched on July 2014 included four lines of service for $100 per month and then late last year they launched a new family plan for its Simple Choice customers at a $100 a month for just two lines – unlimited calling, text and data – that undercut all of the other carriers. Just this past March, T-Mobile announced its new "Un-contract" plan, pledging that their rates would not go up. They also announced that customers that signed up during promotional pricing would be allowed to keep those prices as long as they remain a T-Mobile customer. Carter also said that they may continue to expand their family plan, but would not give out any details.
Similar comments were made by Carter at their quarterly earnings call when he said, "We're not going to talk about some of the future innovations that we have plan, but I think Uncarrier 10 coming soon, we're excited about that as well as other innovations throughout the year. I think one of the challenges we have as a management is with the innovation and things we are bringing into marketplace: How can we continue to target these family units … [at] Verizon, AT&T, with a little bit of ARPU dilution."
Another program introduced early this year is T-Mobile's "Smartphone Equality" – this allows any customer with a monthly voice plan to purchase a new smartphone at zero-down, regardless of their credit score, if they have made at least twelve consecutive payments on time. T-Mobile introduced its "Test Drive" service in June 2014, where they would give a potential customer an iPhone 5s to take for a totally free 7-day 'spin,' yet only about 5 or 6-percent have taken advantage of the program. He did say that they were going to start pushing the program targeted for Verizon customers under its "Never Settle for Verizon"campaign. He also commented that they hope that the next iPhone would have support for T-Mobile's 700 MHz band class 12.