T-Mobile on Wednesday posted its quarterly earnings, but it was the number of iPhones the company sold that is generating more wireless industry buzz. So far, the company has sold 500,000 iPhone 5s to new and existing customers.
T-Mobile primed the pump with its so-called "uncarrier" promise to change the face of wireless in America. The company is supplementing iPhone 5 pricing with a trade-in offer that apparently turned some heads.
Through June 16, qualified customers can trade in their iPhone 4S or iPhone 4 to get an iPhone 5 for zero down and monthly payments. T-Mobile has done away with annual service contracts and subsidies, so this could make the iPhone 5 more affordable under its banner.
Did the Trade-In Deal Work?
Customers can sign up for a Simple Choice Plan and receive a trade-in credit of up to $120 that can be used toward monthly payments, an existing T-Mobile bill, or the purchase of accessories or another device. Mike Sievert, chief marketing officer for T-Mobile, trumpeted the deal as an "unbeatable upfront price" coupled with the "most hassle-free and affordable rate plan in wireless."
Jeff Kagan, a telecom analyst in Atlanta, said 500,000 iPhones is a rapid start out of the gate for T-Mobile. The company just started selling the iPhone a few weeks ago, so apparently there was a pent-up demand, he said. The next question is can T-Mobile keep up that pace?
"What makes this more impressive are these first-quarter actually occurred during the initial one-month period," Kagan said. "T-Mobile introduced the iPhone on April 12. T-Mobile is the fourth largest carrier in the U.S. market, but has been lagging far behind AT&T Mobility and Verizon Wireless during the last decade."
Price Is Right
Pricing may be a sustaining factor. T-Mobile's Simple Choice Plan offers unlimited talk, text and Web on the company's 4G network. The plan starts with a base rate of $50 per month with 500 MB of up to 4G speed data. Consumers can add 2 GB of up to 4G speed data for $10 per month per line, or get unlimited 4G data for an additional $20 per month per line. Customers can also add a second phone line for $30 per month. Each additional line is $10 per month. And T-Mobile promises no caps and no overages.
With its new plans, is T-Mobile on the fast track to success? Kagan said it's possible, with all the changes the company has been going through recently.
The company has a bold new CEO, John Legere. The company just acquired MetroPCS. And the company is trying to reinvent the way the wireless industry charges for service with Simple Choice. Kagan listed all those points, as well as the fact that T-Mobile is now selling the Apple iPhone 5 at a healthy pace.
"Things seem to be stacking up in the right direction for T-Mobile, but not everything is looking strong," he said. "Total revenues fell. They must turn the ship around. However, they are taking real, meaningful steps in that process. So we'll just have to keep our eyes on T-Mobile going forward and see what happens next."