T-Mobile execs see early momentum, higher store traffic

T-Mobile executives tell CNET they aren't worried about Virgin Mobile's attempt to poach customers away.

At T-Mobile's "Uncarrier" event. Lori Grunin/CNET

T-Mobile's decision to abolish contracts and cell phone subsidies has piqued the interest of consumers.

That's according to T-Mobile's senior vice president of marketing, Andrew Sherrard, and its executive vice president for corporate services, David Carey, who spoke to CNET today. Carey said traffic was up in all of the stores he visited after the carrier made its switch late last month and announced the changes during a high-profile event in New York.

"I have every reason to believe this momentum will continue and carry forward," he said, but conceded that it was too early to get any real indication of traction with consumers.

Aside from that, Carey said the preregistrations for the iPhone 5, which debuts on T-Mobile on Friday, have been strong, although he declined to provide any specific figures.

T-Mobile has been in the spotlight in recent weeks because of its decision, and it's clearly ruffled some feathers with its rivals. Earlier today, Virgin Mobile offered to pay any T-Mobile customers $100 if they switched carriers by the end of May.

In an e-mail, Virgin Mobile stressed that it had been offering a no-contract option far longer than T-Mobile, and downplayed T-Mobile's claim that it is "revolutionizing the industry."

T-Mobile's Sherrard said it was curious that Sprint Nextel, which owns Virgin, was responding in such a second-hand manner. He said T-Mobile doesn't plan to respond with any promotions or offers.

"We're not worried about it," he said. "Between the network, plans, and devices, we feel good about what we've got. There's no need to respond."

T-Mobile faces a bigger challenge convincing consumers that paying full price for a phone actually saves them money over the two-year period that a standard wireless contract covers.

"We realize this new construct would take a conversation," Carey said. "We had to talk about how different it was, and where the benefits are. When something is new and different, it'll take time for clarity to come by."

Virgin and fellow Sprint prepaid unit Boost are likely feeling some of the heat as T-Mobile looks to take a bigger slice of their prepaid businesses. Even Verizon's CEO, Lowell McAdam, told reporters last week that he was open to moving to such a model if consumers demanded it.

In the e-mailed statement touting its "ditch T-Mobile" campaign, Virgin stressed that it had been offering a no-contract service since 2002, and that "smart" customers can switch and get paid for it.

T-Mobile's Carey, however, said he was flattered that Virgin would point out the similarities between their businesses and specifically call T-Mobile out.

"They're doing it because we're doing something good," he said. "They wouldn't respond if we weren't doing something right."

 

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