updated 07:49 pm EDT, Fri June 20, 2014
Trial of cellular network gives users a week with 'latest, greatest' smartphone
Proclaiming "the way we buy wireless in this country is patently absurd," T-Mobile CEO John Legere on Thursday announced a promotion called "Test Drive," where prospective customers get a free week's use of the network -- on a new iPhone 5s, also provided by the company -- to see how they like it, with no cost or obligation. Twenty-four hours later, Legere reported that over 12,000 new users have already signed up for the program, which begins on Monday.
CMO Mike Sievert explaining Test Drive details
During the presentation, he noted that the average T-Mobile customer uses more data than those on other networks, in part because of the carrier's more liberal policy on data usage and "unlimited" data plans. T-Mobile customers use 69 percent more data than the average Verizon user, 61 percent more than Sprint, and double the average of AT&T, Legere said. He added that T-Mobile has 70 percent more spectrum per customer than Verizon.
Consequently, the company figures it can handle more customers using more data, from which evolved the idea of the test drive. At present, and for the foreseeable future, the iPhone 5s -- Apple's premier iPhone and still the highest-rated, even in the face of added competition -- is the exclusive smartphone used in the promotion. Legere encouraged people to sign up for the test drive and "start cheating on their carrier," and thus far more than 12,000 have.
Positioning itself as a "data strong" network, he told prospective switchers "there is no cost. No hidden fees. No obligation. And no more buying blind" during the test drive promotion. " I want you to know our network will work for you and your family -- at home, at work, at school and everywhere in between --before you make a decision. I want you to experience our kick-ass network for yourself."
There are a few minor catches in the program. While the carrier says credit cards will not be charged, a credit card is required for signup as a way of verifying information (and insuring the iPhone 5s gets returned). Also, though the program will send the iPhone 5s and instructions on using T-Mobile through the mail, in order to return the iPhone, customers must come to a T-Mobile store or affiliate dealer in person. When signing up, customers are shown a map with a nearby store location to ensure that the program is right for the consumer. Chief Marketing Office Mike Sievert told reporters there would be a small grace period.
The offer is limited to one credit card per household, and only available once per year. Businesses are be treated a little differently in the program -- Sievert mentioned that businesses would be able to receive up to three iPhones for the test period. They would also see their testing time extended to two weeks, and a representative would deliver and collect the devices.
One final limitation is that T-Mobile's network does not reach absolutely everywhere in the US, and it doesn't offer LTE or Voice Over LTE (VoLTE) in some cities. Up to this point, T-Mobile has deployed wideband LTE in 16 of the larger markets in the nation, with VoLTE in an additional 15 markets, serving a total of 107 million Americans. The company intends to offer VoLTE nationwide by the end of the year. For the rest of the country, the carrier has 3G speed available.
If the promotion is still running by the time Apple offers its next iPhone (presumably arriving in the fall), the carrier will consider using the new one in the promotion if possible. Apple is the exclusive partner on the promotion, making the introduction of Android phones in the offer unlikely, at least in the near-term. Legere expects about one million customers of other carriers to take part in his "test drive" promotion in the "first year," but said he is prepared to ask Apple for more iPhones if demand requires it. Niether Legere or Sievert would speculate about how many new customers they expect to gain from the event.
The carrier is planning another "Uncarrier" news event planned for sometime later this summer, but didn't discuss details. In his update to the event, which also saw the arrival of a Rhapsody joint venture streaming music service called "unRadio" (free to T-Mobile users) and an offer to allow other streaming-music service usage to not count against a user's data plan, Legere ended with a "note to self: call Apple for more iPhones."