The above tweet is T-Mobile CEO John Legere calling out his counterpart at AT&T, Randall Stephenson, after AT&T launched of what is being described as a pre-emptive strike, offering T-Mobile subscribers up to $450 in credits to switch carriers. T-Mobile is expected to soon unveil its own new packages, including offers to buy out early termination fees for customers switching from rival carriers.
This competitive tension is a far cry from 2011, when AT&T spent most of the year trying to persuade regulators to let it take over T-Mobile. When the deal collapsed under regulatory opposition, T-Mobile walked away with $6 billion in break fees, including valuable spectrum—airspace needed to transmit data over mobile networks. Comments like Legere’s tweet make it seem like T-Mobile was really bluffing when it agreed to be taken over by AT&T in 2011: As he notes, it has used the spectrum it gained to bolster its mobile coverage, and the cash to aggressively undercut its rivals on price, including areas like global roaming.
Of course, a price war is terrible for shareholders in wireless carriers, but great for consumers, and vindicates the US government’s decision to block AT&T from buying T-Mobile. Now,it might also make it more difficult for Sprint (and its majority shareholder, Japan’s Softbank) to do the same.
As Reuters’ Felix Salmon has already pointed out, T-Mobile’s recent success might make regulators less likely to approve a takeover by Sprint/Softbank. That would be bad news for T-Mobile’s owner, Deutsche Telekom, which had made it clear it wants out of the US market. Legere surely realizes this, but he doesn’t seem to care, describing AT&T’s move as a “bribe” and “desperate,” and saying that the “competition will be toast” after the Consumer Electronics Show in February.
Whether its bravado or part of an intricate strategy to fool everyone, Legere’s antics make for a refreshing change in a notoriously stuffy industry.