John Legere Predicts Verizon To Make 'Stupid Acquisition'

T-Mobile USA, America's third largest carrier, is acquiring customers at a high rate. According to the latest earnings report, the Uncarrier acquired 2.2 million customers in the first quarter of 2016 - beating market expectations of around 1.7 million. In the earnings call, Chief Executive Officer, John Legere, said this on the number of new customers: "We have had three full years of positive post-paid porting against the whole industry, and nine quarters of positive porting against everybody. They're all donating. Dumb and dumber are donating at record rates." By "dumb and dumber," John is referring to the two largest national carriers in the United States, AT&T and Verizon Wireless. Over the last few years, T-Mobile USA has trolled its cellular carrier competition as it works to disrupt the industry. Sometimes, T-Mobile's behavior, especially that of the Chief Executive, is over the top but there's no doubting that the carrier is not playing the mobile market the same way that the competition is. And it is being successful, too.

T-Mobile USA has come a long way from potentially being bought by AT&T or merged into Sprint. Instead, the business has sought to undermine the traditional way of doing business by the cellular carriers, such as applying data caps and high costs when customers go over their allowances. Instead, T-Mobile now exclude many music and video streaming services from customers' data allowances, which can translate into real savings at the bill. T-Mobile USA also offer free international roaming across much of the world together and were amongst the first carrier to introduce equipment installation plans. T-Mobile's aggressive marketing has caught the attention of the other carriers, who are changing their ways to combat the Uncarrier.

In comments today, John Legere remarked that he believes Verizon Wireless will make a "stupid acquisition" which could mean the struggling Yahoo! internet business although he was not specific. In the detail, John told CNBC: "Verizon's about to take over as dumber from AT&T. I make that prediction. In [the] next six months, they're going to do some stupid acquisition." In 2015, Verizon bought AOL for $4.4 billion in order to use AOL's digital and video advertising business. Yahoo!'s internet traffic could be used to boost these online streaming numbers. John has also been critical of Verizon's attempts, in his eyes, to "be in a different business." T-Mobile USA are not shy about admitting that they are simply in the mobile phone business. John sees Verizon's investing into mobile video business as a distraction, however Verizon do not see it this way - instead their spokesperson offered the shareholder-friendly canned response of: "Our goal is long-term shareholder value, based on a diverse and healthy cash flow. We use that cash to re-invest more than $17 billion in capital each year to provide customers with great networks, and great new services that take advantage of those networks." To some industry observers, Verizon is trying to drum up a reason for customers to use their network and T-Mobile USA is simply enabling customers to use it.

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.