Analyst confirms death of the Un-carrier as T-Mobile no longer has clear lead in entry-level value
Once considered special compared to Verizon and AT&T, Wall Street sees T-Mobile as no better than its rivals.
Analyst says T-Mobile is no longer special | Image by PhoneArena
From 2012-2020, no carrier was as innovative and set the standards for the US wireless industry more than T-Mobile. When I first started writing for PhoneArena in 2009, T-Mobile was considered the worst carrier out of the US "Big 4" which included Verizon, AT&T, and Sprint. It was the last to offer ts customers 3G service, and last to offer them 4G as well.
The start of the John Legere era
In September 2012, T-Mobile majority stockholder Deutsche Telekom brought in John Legere to be president and CEO of the struggling wireless provider. The job Legere did was amazing as he took T-Mobile from dead last among the US Big 4 to number two by putting customers first with free perks like Netflix, debuting the T-Mobile Tuesday reward program.
In five years, which carrier will lead in the US?
Most of all, Legere gave T-Mobile a new identity as it became the "Un-carrier." Lookng to stand out from the competition, T-Mobile was the first to get rid of two-year subsidized contracts.
Writing about Legere and T-Mobile was fun during the Un-carrier era
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Look, I'll admit that writing about Legere was fun. He called AT&T and Verizon Dumb and Dumber. He wore magenta T-shirts and sneakers and his long shoulder-length hair gave him an appearance so unlike any other CEO of a public company of the era. My feeling was that he really knew about phones and unlike most industry CEOs, he could have rattled off the specs of the top selling handsets of that period.
John Legere was named wireless CEO of the year five consecutive times
It isn't just my opinion that Legere was largely responsible for T-Mobile's rise toward the top. Reps I've spoken with who were around back then praise Legere and wish he would return. In 2019, Glassdoor named Legere the top CEO in the U.S. wireless industry for the fifth consecutive year. He received an approval rating of 99% from T-Mobile employees.
Legere turned over the CEO position to his former right-hand man Mike Sievert after leaving T-Mobile on April 1, 2020 when the $26.5 billion merger with Sprint closed. And that was the beginning of the end. Earlier this month, when T-Mobile announced its 36-month device financing (up from 24 months) joining Verizon and AT&T, one rep summed up the announcement by saying, "RIP Un-carrier officially."
Former T-Mobile CEO John Legere. | Image by T-Mobile
Recently T-Mobile was downgraded by analyst Peter Supino of Wolfe Research. Supino reduced his rating on the company's shares from "outperform" to "peer perform." While that comment is about T-Mobile's stock compared to the shares of competitors such as AT&T and Verizon, it also is a sign that Wall Street sees T-Mobile's Un-carrier days coming to an end.
AT&T and Verizon offer lower-priced entry level postpaid plans than T-Mobile
Supino told Wolfe clients that AT&T and Verizon offer more competitive entry level postpaid price points, an area once dominated by T-Mobile. Supino pointed out that the latter's Essentials Saver 2.0 plan, priced at $50 for one line and $40 for two lines, costs much more than the $15 charged by AT&T for one line of its entry level postpaid Build-a-Plan. Verizon's entry-level Simplicity plan, at $30 per month per line, also undercuts T-Mobile.
Other Wall Streeters, such as the analysts at TD Cowen, say that T-Mobile has lost its momentum thanks to increasing competition from Verizon, and Low Earth Orbit (LEO) satellites.
T-Mobile remains the best value in mobile, but its value proposition looks less differentiated today. In the last 9 months, AT&T and Verizon have begun to offer more value at entry level postpaid price points previously dominated by T-Mobile
Peter Supino, analyst, Wolfe Research
We can't talk about T-Mobile's fall from grace without discussing the carrier's transition to digital. Reps are getting laid off, stores are being shuttered, and most transactions have to go through the T-Life app. T-Mobile parent company Deutsche Telekom says that since the start of the year, the carrier's headcount has declined by 4,671 positions. This is not the T-Mobile that John Legere worked so tirelessly to build.
Wolfe's Supino says that Verizon and AT&T will match T-Mobile's performance inside the next four years. He sees both competitors growing fast, which was one of the reasons why he downgraded the once Un-carrier.
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