Legere is on the way out!

One of the most colourful, and successful characters in recent telco history is on his way out of T-Mobile US.

Few CEOs exit a telco with an enhanced reputation, but such is the success of T-Mobile US under his leadership, John Legere has almost completed an impossible to follow act. Perhaps this could be likened to the retirement of Manchester United Manager Sir Alex Ferguson or US tennis superstar Pete Sampras; how do you follow-up such impressive accomplishments?

Legere’s contract will expire on April 30, 2020, with current COO Mike Sievert taking over as CEO. Legere will remain as a board member of the company, tasked with overseeing the transition of the business as Sprint and T-Mobile US merge into a single entity. His future has not been confirmed just yet, though rumours emerged last week he was being groomed for the top-job at shared-workspace giant WeWork.

“John Legere has had an enormously successful run as CEO,” said Tim Höttges, CEO of parent company Deutsche Telekom.

“As the architect of the Un-carrier strategy and the company’s complete transformation, John has put T-Mobile US in an incredibly strong position. I have the highest respect for his performance as a manager and as a friend, I am very grateful to him for the time together.”

While Legere has formed a reputation as one of the more controversial and colourful characters in the US telco space, he should also be remembered as one of the most successful.

When Legere was appointed as CEO in September 2012, T-Mobile was not in an enviable position. Less than a year earlier, T-Mobile US looked like it would be merged into the AT&T business, only for the Department of Justice to step-in on the grounds of competition. At the end of 2012, T-Mobile US and MetroPCS Communications merged to create a consolidated fourth player with more spectrum, scale and investment potential. In 2013, Legere took control of the company’s fortunes with the launch of the ‘Uncarrier strategy’.

Over a six-year period, Legere’s magenta army have introduced numerous ‘Uncarrier’ offers which have proven to be highly disruptive to the US telco industry. For example, Uncarrier 4.0, known as Get Out of Jail Free Card, saw T-Mobile US pay the Early Termination Fees (ETF) of new subscribers, or Uncarrier 6.0 introduced zero-rating downloads for music streaming.

The result was relevance. T-Mobile US challenged the status quo, creating value for customers which rivals weren’t, eventually forcing the industry to evolve. When Legere was first appointed as CEO, T-Mobile US had roughly 33.3 million subscribers, now it commands 84.18 million. In 2012, revenues stood at $15.9 billion for the 12 months, in 2018, this number increased to $43.3 billion.

What will be interesting to see is whether Sievert can follow-up the wild-eyed persona which Legere has made his own. Sievert is a believer in the Uncarrier strategy, he led the marketing campaigns as CMO prior to his appointment as COO, though Legere was the face of T-Mobile US as well as the mastermind of the grand plan.

For example, looking at the social media presence of Legere, his Twitter account has 6.5 million followers, while a quirky Christmas themed message on YouTube in 2015 was viewed 226,266 times. The energetic CEO even fronted a series of cooking videos under the hashtag #slowcookersunday, the lasted video attracted more than 4.8 million watches on Facebook. Legere is the company’s most valuable brand ambassador, and few can replicate the enthusiasm and genuine belief in the message. What impact this will have on the appeal of the newly-merged business remains to be seen.

The future of the T-Mobile US business is at a pivotal point right now. Once the merger gets rolling it will have to convince Sprint’s current subscriber base to stay as a customer of the newly-merged telco, instead of churning to a rival. Churn is unavoidable in this scenario, therefore it will be a case of damage limitation. Unfortunately, the T-Mobile brand will not be able to rely on one of its most powerful marketing assets before too long.

The T-Mobile loss is a significant gain for WeWork, presuming the rumours are true. Though we would now like to point you to a collection of videos from the combative, colourful and cunning John Legere.

Legere and T-Mobile running riot again

He might be wild-eyed, egotistical and unconventional, but you can’t argue with the results T-Mobile US CEO John Legere is delivering shareholders.

Reporting 2018 full year financials, T-Mobile US has continued the rip-roaring success of the last few years. Total revenues for 2018 finished at $43.3 billion, up 7% year-on-year, alongside 7 million net customer additions, 4.5 million of which were in the lucrative branded postpaid segment.

“This never gets old,” Legere proclaimed. “T-Mobile finished another year with record breaking financials and our best-ever customer growth. Record revenues, strong net income, record Adjusted EBITDA, our lowest-ever Q4 postpaid phone churn that was better than AT&T for the very first time.

“T-Mobile is competing hard and winning customers – and we continue to deliver results beyond expectations. Our 2019 guidance shows that we expect our incredible standalone momentum to continue.”

All this, and the telco still hasn’t launched the much-anticipated TV offering.

When Legere first walked into the room as CEO in September 2012 investor jaws must have hit the floor. This is not a man who looks like a business leader in one of the most risk-adverse and stuffy industries on the planet, and when the first Uncarrier move was announced in 2013, a few must have been close to passing out.

Going against everything which everyone knew in the industry, March 2013 saw the introduction of the first Uncarrier offer. A new streamlined plan for customers which dropped contracts, subsidized phones, coverage fees for data, and early termination fees. This was certainly a break from the status quo and since this point numerous new Uncarrier moves have been introduced almost doubling revenues (2012 full year was $22.5 billion). It might not be traditional, but this is a success story like few others.

At the end of the three-month period, T-Mobile had a total of 79.6 million customers and a postpaid churn rate of 0.99%. This is still a company which should be considered a challenger, but T-Mobile US is making steady progress. It is not accelerating towards the leadership duo of Verizon and AT&T, but it certainly is not slowing up either. The big question is whether this momentum can be maintained.

With 5G on the horizon, the team certainly have the raw materials to create another few Uncarrier plays. Deployment of 600 MHz is setting the scene for a launch, with the team promising the network will be ready for the introduction of the first standards-based 5G smartphones in 2019. By the end of 2018, T-Mobile US claims to have cleared spectrum for approximately 135 million POPs and with the ambition to clear spectrum covering 272 million POPs by the end of 2019.

All this and the team still hasn’t done anything with the Layer123 purchase of December 2017. Alas, a TV Uncarrier move is just something we’ll have to look forward to over the next couple of months.