T-Mobile offers free Apple iPhones for network ‘test drive’
06/18/2014 10:32 PM
06/19/2014 9:21 PM
T-Mobile US Inc. gained nods of approval for innovation with its seven-day free trial offer and streaming music deal, though some analysts doubted consumers will respond in large numbers.
The nation’s No. 4 wireless company announced the free trial late Wednesday to get potential customers to “test drive” its wireless network.
Beginning Monday, the deal requires a consumer to provide a credit card number online and T-Mobile delivers an iPhone 5S in the mail for use over the seven days, the company said. Return the phone to a T-Mobile store, with a grace period, and no charges will be assessed.
“We’re not trying to make money on this,” T-Mobile chief executive John Legere said at a kickoff event in Seattle.
The company hopes consumers who use T-Mobile’s data network under the program will find that it is faster than their current carrier’s network and switch to T-Mobile.
Wednesday’s announcement also included a streaming music deal. T-Mobile said it will no longer count streaming music against customers’ data usage on the company’s network. Although some customers have unlimited data plans, the deal will help those whose plans provide a limited amount of data use each month.
T-Mobile also announced a venture with Rhapsody to offer unRadio to its customers. It’s a new app that allows users access to music without listening to advertisements and with the ability to skip as many songs as they want. The unRadio service will be free to customers covered by T-Mobile’s $80-a-month unlimited data plan and $4 a month to others.
It follows Overland Park-based Sprint Corp.’s announcement of a partnership with Spotify that provides free trials and discounted access to the music service for Sprint brand customers.
Two Wall Street analysts called T-Mobile’s test drive and music play innovative or unique but doubted that they will affect consumers’ carrier choices significantly.
“In terms of the seven-day trial, we view this more as market noise than anything that will drive massive churn from other carriers,” Jennifer Fritzsche wrote in a note to clients of Wells Fargo Securities.
Similarly, Mike McCormack at Jefferies said the test drive would help T-Mobile maintain its recent sign-up momentum but fell short of its “disruptive” earlier steps and highlighted the company’s “continued focus on pricing stability.”
On the network front, T-Mobile scored well in PCMag’s speed tests last month, but only in the 30 cities where its faster LTE, or Long Term Evolution, technology is in place. T-Mobile acknowledges the limits of its geographic coverage but argues that what counts is performance where consumers use the bulk of their data. And that use — by streaming videos and music and downloading apps — mostly comes in cities, which is where T-Mobile scored well.
“It’s not only where we are, but how deep we are,” T-Mobile’s Marty Pisciotti said Thursday.
The idea of the test drive is to let consumers of other wireless companies see how they fare under T-Mobile’s service without having to switch carriers first.
T-Mobile has been attracting new customers with its marketing efforts dubbed Un-carrier. Some of its changes have been adopted by the other national carriers, such as faster phone upgrades and equipment installment plans.
Legere said Apple is supplying the iPhones free and he expects to have 1 million test drives through the promotion.