Why T-Mobile figures it will steal more customers with iPhone 6

T-Mobile CEO John Legere believes the pieces are in place to benefit from iPhone switchers after Apple launches a new smartphone -- likely in September.

T-Mobile's Chief Marketing Officer Mike Sievert holds aloft the long-awaited T-Mobile iPhone 5 at an event in New York March 26, 2013.
Chief Marketing Officer Mike Sievert holding the iPhone 5. Lori Grunin/CNET

T-Mobile might be just as excited about the next iPhone as you.

T-Mobile, of course, won't be waiting in line at an Apple store to buy the iPhone 6. Rather, it expects to be a primary beneficiary of the launch of the high-profile smartphone, which CEO John Legere called a significant "switching event."

The expected launch of the next iPhone, which traditionally has fallen in September, is seen as a catalyst for smartphone sales and a chance for the carriers to nab customers looking to make a big change. Traditionally, T-Mobile hasn't had a chance to participate, having only gotten Apple's marquee smartphone last year. But that could change.

"I think we've got a huge opportunity," Legere said.

The CEO, known for his uncontrolled bursts of off-the-cuff remarks, lived up to his reputation on Thursday, trying -- and failing -- to stay mum on the next iPhone.

"You are not going to get me to use the iPhone 6 word on this conference call," Legere said, before talking about its potential impact on T-Mobile.

There are some factors that help his case. By virtue of getting the iPhone much later than its rivals, T-Mobile has the lowest number of iPhone customers in its base. So when Apple comes out with a new smartphone, there will be more iPhone users looking at making changes at the other carriers.

Legere cited a Morgan Stanley research note that said a third of wireless customers are considering switching carriers over the next six months, and that T-Mobile had the lowest percentage of potential switchers. Given the momentum of its customer growth and aggressive plans, T-Mobile will at least have customers giving it a second look.

"Consumers are more likely to consider changing carriers when they are already changing their hardware," said Current Analysis analyst Avi Greengart.

Chief Marketing Officer Mike Sievert followed up in an interview, adding that the company "has a lot to gain." The company's programs, whether it's the offer to buy out someone's early termination fee, or its no-contract offering, make it attractive for someone looking to switch, he said.

The company has momentum on its side. Earlier Thursday, it reported second-quarter results that included a gain of 1.5 million net new customers, and more than 900,000 T-Mobile postpaid customers.

"We're obviously excited about the potential and waiting to see what happens," he said, doing a better job of not mentioning a new iPhone or even acknowledging its existence.

Sprint is already bracing for a hit. The company warned that it would be affected by a seasonal uptick in the customer turnover rate, which a company spokesman said was a result of the back-to-school season and the iPhone launch.

"Sprint is clearly in the biggest danger," Greengart said.

Another potential edge T-Mobile could hold is its Test Drive program, which provides a week-long loaner iPhone 5S for customers to try out. Sievert said that the program was designed to "demonstrate the latest and greatest iPhone," suggesting customers may be able to get their hands on the iPhone 6 via Test Drive -- at least temporarily.

"That's how we launched it," he said. "That's the strategy for it going forward."

T-Mobile shares rose 5 percent to $32.54 on a report that French telecommunications provider Iliad wants to acquire the company.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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