When John Legere vowed to make big changes at T-Mobile, he started with himself: He grew his hair into a shaggy mane, traded in his suit and tie for a hot pink wardrobe and silver fang necklace, and unleashed a loudmouth attitude never before seen in the staid world of wireless carriers.
“The concept really was, from Day 1, not just to survive but to go all the way,” Legere told The Times recently, a small doll made in his likeness nestled on his lap and a Batman ring on his finger. “We had to change this culture unbelievably to something that stands for who we are.”
Ranking fourth biggest on the list of the Big Four wireless carriers in the U.S. gives Legere some creative latitude — there’s less to lose. He’s making the most of it.
In two years as chief executive, Legere has lifted T-Mobile’s flagging customer base and its reputation in unconventional ways. He tackled its business model by lowering prices, scrapping standard two-year contracts, paying early-termination fees for T-Mobile converts and unbundling smartphone prices from the cost of a service plan. T-Mobile calls those initiatives part of its “Un-carrier” movement designed to shake up the industry.
Legere also ditched the corporate rigmarole in favor of an aggressive — some might say abrasive — and colorful persona. T-Mobile’s media events have become forums for Legere to take potshots at his rivals; he has continued the trash talking on Twitter, where he has attracted 642,000 followers. That’s generated a word-of-mouth marketing campaign that centers on T-Mobile’s image as the cool carrier and Legere as its gleeful instigator.
Legere “realized there was an appetite for something different,” said Rich Karpinski, a telecom analyst at 451 Research. “That attitude more than anything else is what people have responded to. There’s a cult of personality in tech that had never been there in telecom and that’s something he figured out.”
So far it’s paying off, with a ballooning subscriber base, higher revenue and growing market share. On Monday the Bellevue, Wash., company announced that it had added 2.3 million customers in the third quarter, bringing its total customer base to 52.9 million; in comparison, market leader Verizon added 1.5 million during the same three-month period. T-Mobile also reported the fastest revenue growth in the industry, with revenue up 10% year over year.
On Tuesday, the day that T-Mobile US Inc. held its earnings call, its stock climbed 86 cents, or 3.1%, to $28.85.
Despite all the new customers, T-Mobile remains in the No. 4 spot (it is poised to overtake Sprint for third place by year’s end) and still has only about half the subscriber base of Verizon and AT&T. Third-quarter revenue was lower than Wall Street estimates, and, in part because of heavy spending to attract new customers, the company swung to a loss of 12 cents a share.
In an industry where size matters, analysts said ideally T-Mobile would further grow its footprint by merging with or acquiring another carrier, although that may be difficult. Sprint reportedly tried to buy T-Mobile this year but faced regulatory hurdles and dropped its bid. In 2011, AT&T’s $39-billion offer to buy T-Mobile was killed by regulators, who said a deal would hurt industry competitiveness. Shortly after Legere’s appointment in 2012, T-Mobile acquired the much smaller MetroPCS in a complex reverse merger.
The company is also under pressure to improve profitability and prove that it can keep its new customers.
Legere is first to admit there’s more to be done, but he’s adamant that he’s not “trying to pretty this company up” for a sale. To keep customers happy, the company is rapidly upgrading its wireless network and plans to roll out more Un-carrier moves.
A longtime telecommunications executive, Legere, 56, led Global Crossing for a decade as CEO and guided the telecom company through bankruptcy before it was acquired by Level 3 in 2011. Before that he’d held numerous executive roles at Dell and AT&T.
Legere’s appeal comes in part from his willingness to put himself out there. He gives out his email address and reads customer complaints, often handling the issues himself. He writes all his own tweets, sending out updates on T-Mobile’s latest offerings, posting selfies with his daughters and showing off his seemingly endless supply of T-Mobile gear.
Customers have eaten it up. They’ve applauded Legere for repping the brand just like a start-up CEO would.
“Good lord you’re awesome,” one follower responded after Legere, an avid runner, tweeted photos of himself jogging around Central Park in T-Mobile socks, a T-Mobile pullover and T-Mobile-branded headphones.
“I talk and behave like our customers,” Legere said. “I guarantee my peer CEOs, they don’t want any part in trying to do what I do.”
“John, I think, has done a masterful job of personifying the brash, upstart ‘Un-carrier’ company by acting the part himself,” said Craig Moffett, a partner at research firm MoffettNathanson. “It’s hard not to feel like his use of profanity and his magenta shirts and long hair aren’t a sort of very calculated strategy.”
At a recent T-Mobile event in San Francisco, Legere sauntered onto the stage in a hot pink T-shirt, took a swig of Red Bull and, with a devilish grin, proceeded to take down the company’s largest competitors one by one.
Sprint’s network, he said, “really blows.” A recent Verizon promotion was “trickery at its finest.” AT&T is “brainwashing” consumers with its “crock” pricing plans. He got in a dig at the Amazon Fire smartphone, calling it “the Fire sale phone,” heckled reporters and joked about teenage boys burning up bandwidth to watch pornography.
“Somebody once said John is a marketer’s dream and a PR person’s nightmare,” Mike Sievert, T-Mobile’s chief marketing officer, said after the event.
Not surprisingly, such stories have led to some disapproval. Run a Google Image search of Legere and a photo with the words “John Legere: Genius, joker or jerk?” appears.
Legere makes no apologies for such outspoken moves — save for one. Asked if he regrets anything he has said, he conceded: “I think I called [AT&T executive] Ralph de la Vega.... I told him I thought he looked better when he was fat, and I felt a little bit bad about that.”
Did De la Vega used to be fat?
“Yeah, he was huge!” Legere said, eliciting a roar of laughter from a group of T-Mobile executives. Nearby, a T-Mobile PR woman looked pained. (AT&T declined to comment.)
Legere crashed an AT&T party in Las Vegas this year — he insisted that he just wanted to watch Macklemore perform — before being shown the door.
In February, after BlackBerry CEO John Chen became “outraged” that T-Mobile was allowing its customers to trade in their BlackBerrys for new iPhones, Legere fired back on social media.
“Was going to engage John Chen on Twitter, but turns out he’s not here. I’ll check MySpace,” he tweeted. A few weeks later, BlackBerry announced that it would no longer offer its products at T-Mobile.
“I don’t think the industry appreciates it,” Moffett said. “Those kinds of things have overstepped cheekiness and become arrogance and obnoxiousness. To be fair, I think he has tried to tone that down a little bit.”
Not everyone wants Legere to cool it.
“Think how boring this industry was before John came around,” said Neville Ray, T-Mobile’s chief technology officer. “The business needed the right level of leadership to stand up there, smack some of these big guys around. People rally behind that, it’s infectious.”
Ray has been with T-Mobile for nearly 15 years and said Legere has brought a playful, innovative spirit to T-Mobile that’s “very different from prior CEO regimes.”
“It’d be no fun trying to slow John down,” he said. “Why would we do that?”